Commercial General Liability Coverage
Commercial Automobile Coverage
Business Income Coverage
Commercial Crime Coverage Descciption
Equipment Floater Coverage
Garage Coverage Description
Umbrella Liability Coverage Outline
Workers Compensation Coverage
Boiler & Machinery Coverage Description
Property Insurance is any type of insurance that indemnifies an insured party who suffers a financial loss because property has been damaged or destroyed. Property is considered to be any item that has a value. Property can be classified as real property or personal property. Real property is land and the attachments to the land, such as buildings. Personal Property is all property that is not real property. The Building and Personal Property coverage form is the form used to insure almost all types of commercial property. The insuring agreement in the Building and Personal Property coverage form promises to pay for direct physical loss or damage to covered property at the premises described in the policy when caused by or resulting from a covered cause of loss. The following is a brief outline of coverages and how they are used within the Commercial Building And Personal Property coverage form.
Coverage for the building includes the building and structures, completed additions to covered buildings, outdoor fixtures, permanently installed fixtures, machinery and equipment. The building material used to maintain and service the insured's premises is also insured. Business Personal Property owned by the insured and used in the insured's business is covered for direct loss or damage. The coverage includes furniture and fixtures, stock, and several other similar business property items when not specifically excluded from coverage. The policy is also designed to protect the insured against loss or damage to the personal property of others while in the insured's care, custody or control.
In addition to the limits stated in the Building and Personal Property coverage form, the policy has a coverage extensions section and an additional coverages section. The coverage extensions section provides limited coverage for newly acquired or constructed property, property of others, certain outdoor property, and the cost to research and reconstruct information on destroyed records. When coverage is placed on the all risk form, two additional extensions are added for property in transit and coverage for certain repair costs related to damage caused by water. The two additional extensions are covered by certain perils only. The additional coverage section provides coverage for indirect losses that result from a direct loss. The coverage applies to removal of debris, preservation of property, fire department service charges and pollutant cleanup and removal. The coverage extensions and the additional coverages have limitations and are subject to certain conditions.
The most the insurer will pay for loss or damage in any one occurrence is the limit of insurance stated in the policy declarations.
The standard deductible is $250. However, other deductible amounts are available and the deductible applies only once per loss.
The term peril is used when discussing losses. A peril is a cause of loss. Basic property insurance policies are written to cover the perils of fire, lightning, explosion, windstorm, hail, smoke, aircraft or vehicle damage, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action. Other property insurance policies, often referred to as the broad form policy, add coverages for water damage, weight of snow, ice or sleet, breakage of glass and coverage for falling objects. The broadest coverage is the special form, which is best known as the all risk form. All risk covers all causes of loss, except those specifically excluded from coverage. It is possible for a commercial property policy to have more than one cause of loss form.
Property can be valued in several different ways. Insurance companies commonly use two approaches to determine value, which also determines how a loss will be paid; the replacement cost method and the actual cash value method. Insurers consider replacement cost of a property item to be the cost to replace it with new property of like kind. Actual cash value is replacement cost, minus the accumulated depreciation for age and condition.
When the agreed value option is used the coinsurance requirement is removed and the insurer agrees to cover loses for it's agreed value. As an example, the insured has property insured for $100,000 and the agreed value is also $100,000, if a loss occurs, any loss up to $100,000 is covered at 100% When this option is used the insured and the insurance company agree on the value of the property before the policy is issued. This option is usually assigned to one-of-a-kind property.
Most building and business personal property polices have a coinsurance clause which requires the insured to carry insurance equal to at least a specified percentage of the actual cash value of the property. If a loss occurs, and it is determined that the amount of insurance carried is less than the amount required, a penalty could be placed on the insured.
An insured can insure a building for its full value at the beginning of the policy year, but, at the end of the year, it might not be covered for it's full value. This problem can be corrected by adding inflation guard coverage. With inflation guard, the policy limit increases gradually during the policy term so that the total increase amounts to the desired percentage increase at the end of the policy term.
This endorsement extends your cause of loss to include damage that results directly from an earthquake. Coverage is provided for replacement of buildings only. All earthquake shocks that occur within a 168 hour period (one week) are considered to be a single occurrence. A separate deductible applies and is determined by the value of the insured property.
The Commercial General Liability Policy provides the insurance protection needed to pay damages for bodily injury or property damages for which the insured is legally responsible. The policy provides coverage for liability arising from personal injury and advertising injury. Coverage for medical expense is also provided. The policy also covers accidents occurring on the premises or away from the premises. Coverage is provided for injury or damages arising out of goods or products made or sold by the named insured. The insured is the named insured and the employees of the named insured. However, several individuals and organizations, other than the named insured, may be covered, depending upon certain circumstances specified in the policy. In addition to the limits, the policy provides supplemental payments for attorney fees, court costs and other expenses associated with a claim or the defense of a liability suit.
There are two commercial general liability coverage forms available, the occurrence form and the claims-made form. Both forms are somewhat identical in the coverages offered. The main difference is in the way claims are handled under the two forms. The occurrence form covers bodily injury or property damage claims that occur during the policy term, regardless of when the claim is reported. The claims-made policy form only covers claims made against the insured during the policy term. A claim made after the policy expires is not covered by a claims-made policy unless the claim is covered by an extended reporting period. The claims-made policy will only have the extended reporting period. The following terms reflect both forms.
The General Aggregate Limit is the most money the insurer will pay under a certain coverage for all claims occurring during the policy term.
Coverage is provided for damages arising out of ownership or occupancy of the insured premises when not maintained in a reasonable manner. This also covers damages arising out of operations performed by the insured business.
Products coverage is provided for damages arising out of products manufactured, sold, handled or distributed by the insured. Completed Operations covers damages occurring after operations have been completed or abandoned, or after an item is installed or built and released for it's intended purpose.
Medical payments coverage pays medical expenses resulting from bodily injury caused by an accident on premises owned or rented by the insured, or locations next to such property, or when caused by the insured's operations. These payments are made without regard to the liability of the insured.
The fire damage limit provides coverage for fire damage caused by negligence on the part of the insured to premises rented to the named insured. If a fire occurs because of negligence of the insured and causes damage to property not rented to the insured, coverage would be provided under the occurrence limit.
Personal Injury means injury other than bodily injury. Coverage is provided for injury resulting from offenses such as false arrest, malicious prosecution, detention or imprisonment, the wrongful entry into, wrongful eviction from and other acts of invasion, or rights of private occupancy of a room. Coverage for libel and slander is also provided in the policy.
This coverage pays for damages done in the course of oral or written advertisement that disparages, libels or slanders a person's or organization's goods, products or services. Coverage for these offenses is provided under advertising injury coverage only if they occur during the course of advertising the named insured's own goods, products or services.
Each occurrence is considered to be an accident, which could include continuous or repeated exposure to the same harmful conditions. An occurrence can also be a sudden event, or a result of a long term series of events.
This coverage is provided automatically without an additional premium charge if coverage is canceled, not renewed, or the insurer renews with a later retroactive date. The basic extended reporting period starts at the end of the policy period and last for five years for claims made against the insured within the five year period and reported to the insurer within 60 days after the end of the policy period.
The supplemental extended reporting period is available under the same circumstances as the basic one. However, it becomes effective only if the named insured makes a written request within 60 days after termination of the policy period and the additional premium is paid. The supplemental extended reporting begins when the basic one ends, and it continues forever. It cannot be canceled by the insured or insurer. The supplemental tail endorsement would provide coverage for claims reported to the insurer within sixty days after the end of the policy period but did not result in a claim being made against the insured until after the end of the five year policy period.
Other types of occurrence or offenses that are unknown by the insured and therefore not reported within the sixty days after the end of the policy period could also be covered by the supplemental tail. When the tail is purchased the policies general aggregate limit and the products/completed operations aggregate limit is reinstated.
The retroactive date shown in the policy declarations is the same as the inception date, or the retroactive date can be a date prior to the inception date. A policy can also be written with no retroactive date.
The liability coverage of the commercial auto policy provides protection against legal liability arising out of the ownership, maintenance, or use of any insured automobile. The insuring agreement agrees to pay damages for bodily injury or property damage for which the insured is legally responsible because of an automobile accident resulting from the ownership, maintenance, or use of a covered auto. The insuring agreement also states that in addition to the payment of damages for which the insured is legally liable for, the insurer also agrees to defend the insured for all legal defense cost. The defense cost is in addition to the policy limits.
The insuring agreement states that the insurer will pay all reasonable and necessary medical and funeral expenses incurred by an insured because of bodily injury caused by an accident. The insured is the named insured, the insured's employees and guests, and any other person occupying a covered auto. These payments are made without regard to fault.
This insuring agreement pays for bodily injury to an insured who is injured by an uninsured motorist, a hit-and-run driver, or a driver whose insurer becomes insolvent. These benefits are paid under the named insured's policy.
This coverage is added to supplement the Uninsured Motorist Coverage, the coverage applies only when the other driver has liability limits at the time of an accident, but the liability limits carried may be insufficient to pay for damages for which the driver is responsible. This is when the insured's underinsured motorists coverage would apply and payment for the difference could be made. The two coverages are mutually exclusive and do not overlap or duplicate each other.
Coverage is provided for any auto, including autos owned by the insured, autos the named insured hires or borrows from others, and other non-owned autos used in the insured's business.
Coverage is provided for all autos owned by the named insured. The owned auto symbol is used for liability insurance only.
Coverage is provided only for autos not owned, leased, hired, or borrowed by the named insured. Coverage includes autos owned by the insured's employees or members of their households, but only while used in the named insured's business or personal affairs.
Coverage is provided only for autos leased, hired, rented or borrowed for use in the named insured's business.
This coverage provides protection against loss or damage to a covered auto or a non-owned auto resulting from the impact with another vehicle or object. Collision losses are paid regardless of fault.
Comprehensive coverage provides protection against loss or damage to a covered auto resulting from loss other than a collision or upset. This coverage also provides for supplemental payments for transportation expenses in the event of total theft of a covered auto or a non-owned auto. Coverage begins forty-eight hours after the theft.
This provides coverage against loss from fire, lightning, or explosion; theft; windstorm, hail, or earthquake; flood; mischief or vandalism; and sinking, burning, collision or derailment of a conveyance transporting the covered auto.
The business auto policy provides a coverage extension if an auto is insured for comprehensive or specified cause of loss coverage which insures against loss of use of a covered auto only if the auto is a private passenger type auto and is stolen. The coverage extension pays up to a daily limit of $10 and a maximum limit of $300. Payments begin forty-eight hours after the theft and ends when the insured auto is returned or when the insurer has paid the insured for the auto.
However, for broader coverage the insured can pay an additional premium for rental reimbursement coverage. Rental reimbursement pays the cost of renting a substitute auto for replacement of any covered auto that has suffered a covered loss. The daily and maximum limit for this coverage varies among insurers.
When this coverage is added, the insurer pays for towing and labor costs each time a covered auto or non-owned auto is disabled, up to a stated amount.
Personal Injury Protection (PIP) is an endorsement that adds no-fault benefits. No-Fault means that in the event of an automobile accident, each party collects from his or her own insurer regardless of fault. The PIP endorsement is only available in certain states with No-Fault Laws. The endorsement applies only to bodily injury and not to property damage. (The state of Michigan is the exception to property damage.) No-Fault Laws vary widely from state to state.
Business Income is the net profit or loss that would have been earned or incurred if the suspension of the business had not occurred, plus any normal operating expenses that must continue during the suspension of the business. Business Income insurance pays the actual loss of business income sustained by the insured because of a necessary suspension of the insured's operation during the period of restoration following a loss. The suspension must result from direct physical loss or damage to real or personal property. Coverage is provided against the same causes of loss covered under the insured's property policy. Under certain conditions, the policy also provides an extension of coverage for newly acquired property.
The insured's operations are the business activities of the insured, which occur at the location listed in the policy. The period of restoration is the period beginning on the date of the direct loss, and ending when the damaged or destroyed property could have been restored.
The business income and extra expense form provides the following additional coverages:
Extra Expenses are any expenses over and above those that would have been incurred during normal operation of the business. Some of the covered extra expenses are; expenses incurred to avoid or minimize the suspension of operations, expense to repair or replace property, and expense paid for overtime work to speed up the restoration of the business.
Civil Authority is when access to an insured's premises is denied by civil authority as the direct result of damage or destruction of a neighboring or adjacent property belonging to others. If the damage or destruction is caused by a cause of loss covered by the insured's policy, this coverage would apply. The insured's premises would be covered for the loss of income during the period of suspension, up to a maximum of two weeks.
Alterations/New Buildings provides coverage for loss of income resulting from a delay in beginning operations. The delay must be the result of damage to new buildings or structures, either completed or under construction. Damage to additions or alterations to existing buildings are also covered. The damage must be the result of a covered cause of loss.
This coverage provides the time needed for the insured's former customers to return once the business suspension is over by providing coverage for loss of income until sales return to normal, or up to a maximum of thirty days.
Maximum Period of Indemnity is a restriction of the period of restoration provided under the policy. If this option is selected the insured's loss payment is limited to the lesser of (1) the amount of loss sustained during the 120 days immediately following the loss or (2) the policy limit. The coinsurance requirement does not apply if this option is chosen.
Monthly Limit of Indemnity is an option that allows the insured to recover a percentage of the actual policy limit during each thirty day period of interrupted operations. If a loss occurs, payment would be made for the lesser of the actual amount of the loss, or the maximum amount allowed to recover with this option. Under this option, the coinsurance requirement does not apply.
Extended Period of Indemnity is an option that extends the "extended business income coverage" over the standard thirty-day period. The insured can extend the coverage to 60 days, or up to a maximum of 360 days. The selected time would depend on the time the insured estimates it would take for revenues to return to normal after a suspension of the business.
Agreed Value is an option that requires the insured to complete a business income report/worksheet showing the actual financial data for the previous twelve months, and estimated financial data for the next twelve months. An agreed value is determined from the financial data submitted. If a loss occurs, the insured's policy limit must be equal to the agreed value amount, if loses are to be paid in full. When this option is in force, the coinsurance clause does not apply.
Employee dishonesty is considered to be a criminal act committed by an employee acting alone or in collusion with others. There must be intent by the employee to cause the employer a loss and to obtain a financial benefit for the employee or someone else.
Coverage is provided for dishonest acts of employees of the named insured only. Coverage insures against loss of money, securities, and property other than money and securities. The blanket form provides coverage for dishonest acts of all employees. The limit for blanket coverage applies per loss, regardless of how many employees are involved. The scheduled form provides coverage only for the dishonest acts of employees specifically listed in the policy. On the scheduled form, a separate limit applies to each employee listed on the schedule.
Forgery is generating a document or signature that is not genuine.
Alteration is changing a document in a manner that is neither authorized nor intended.
This form insures against loss caused by the forgery or alteration of a covered item drawn against the insured's accounts. A covered item might be a check, draft, promissory note, bill of exchange or similar instrument.
Theft means any act of stealing.
Disappearance is unknown causes of loss. Disappearance lacks the elements of knowing if the crime was a theft, burglary or robbery.
Destruction is the loss of certain property, it is usually the result of another cause of loss.
Section (1) of the form covers money and securities against loss by theft, disappearance, or destruction inside the premises. Section (2) covers money and securities outside the premises in the care and custody of a messenger.
Robbery is the taking of property from a person by the threat of personal injury to that person.
Safe Burglary is a specific kind of burglary that means the taking of property from a safe or vault which shows visible signs of forcible entry.
This form covers property other than money and securities inside and outside the premises. Property other than money and securities is covered while outside the premises and only in the care and custody of a messenger. Coverage inside the premises is for loss or damage resulting from robbery of a custodian or from safe burglary. A custodian is the named insured or a partner or employee of the insured.
Covers property other than money and securities inside the premises. It also covers damage to the insured's premises resulting from a covered cause of loss.
Computer fraud is a specialized kind of theft where a computer is used to steal property from it's rightful owner.
This form covers money and securities and property other than money and securities.
Extortion is the surrender of property away from the premises as a result of a threat of bodily harm to someone who is, or allegedly is, being held captive.
This form covers money and securities and property other than money and securities.
Section (1) covers property other than money and securities inside the premises for loss caused by actual or attempted theft. Section (2) Robbery Outside the premises covers property other than money and securities while it is in the care and custody of a messenger.
The primary function of the ACORD Equipment Floater Application #146 is to collect underwriting and rating information for the Contractors Equipment Form. However, the application may be used for any other Inland Marine coverage that will fit into its structure. Since there are several Inland Marine Coverage Forms that fit into the structure of this application this document will briefly explain the many kinds of inland marine policies that cover many kinds of loss exposures. Inland marine policies are divided into two categories; filed and non-filed. Filed policies are characterized by a large number of potential insureds and reasonably similar loss exposures. The rates and forms of filed policies must be filed with the state insurance department. Non-filed policies are characterized by a relatively small number of potential insureds, and diverse loss exposures or both. The rates and forms for Non-filed policies are not filed with the state.
The property covered on the contractors equipment floater might range from simple hand tools to very large cranes. Virtually any type of mobile equipment or tool can be insured. The equipment covered can be used in a wide variety of operations such as, home improvements to strip mining. It might be used to build roads, buildings, pipelines, or many other types of structures. The coverage provided is for direct physical loss to the equipment. Rental reimbursement coverage can be added by endorsement to cover the cost of renting substitute equipment if covered property is out of service by a covered cause of loss.
The inland marine builders risk portion of the policy form covers structures being built, temporary structures at the building site, and building materials that have not yet become part of the building. The building materials are covered while on the insured location, in transit, or in storage at another location. Business income coverage can also be provided on the policy. The installation portion of the policy usually insures a contractor's interest in building supplies or in fixtures that the contractor has been hired to install.
The inland marine electronic data processing policy is used to insure damage to data processing hardware, software, and media. The policy also covers the extra expense to continue data processing operations following a covered loss that resulted in damage to the system.
Bailee policies are written to insure dry cleaners, repair shops, public warehouses, and several other types of businesses with large amounts of the customers' goods in the insured's possession. There are two major types of bailee policies. The Bailee Liability Policy covers damage to customer's goods only if the insured is legally liable for the damage. The Bailee's Customers Policy covers damage to customers' goods without regard to the bailee's liability.
The sign coverage form is used to insure neon fluorescent, automatic or mechanical electric signs, and lamps. All covered signs must be written on a schedule with a limit of insurance shown for each item on the schedule.
The primary purpose of the equipment dealers coverage form is to insure the stock in trade of dealers in agriculture and construction equipment. Coverage is provided for customers equipment in the care, custody, or control of the named insured. The coverage can be written on a reporting basis or non reporting basis.
The commercial articles coverage form is used to cover photographic equipment and musical instruments used on a commercial basis. Coverage is provided for photographers, motion picture producers, professional musicians, and others. The form is not intended to provide coverage for dealers of these types of property. Coverage can be written on a schedule or blanket basis.
The mail coverage form is written for banks, trust companies, insurance companies, investment brokers and similar firms that frequently ship securities by mail. The mail coverage form purpose is to cover securities and other negotiable instruments while in transit by first class mail, certified mail, express mail, or registered mail.
This form was designed to meet the needs of retail jewelers. The form provides coverage for damage to the jeweler's stock of jewelry, precious and semi precious stones, watches, precious metals and similar merchandise. Similar property of others in the insured's care, custody, or control is also covered.
Businesses engaged in selling, servicing, storing, or parking autos have special insurance needs. The garage coverage form was designed to cover the risk associated with these types of business operations. The garage policy combines coverage for auto liability, commercial general liability, and physical damage coverages in one policy. Garage operations are defined as the ownership, maintenance, or use of locations for garage business and that portion of the roads that adjoin these locations. The garage operations includes the ownership, maintenance and use of autos indicated in the policy as covered autos. Garage operations also includes coverage for all operations that are necessary or incidental to a garage business. An auto is defined as a land motor vehicle, trailer or semi-trailer. The type of coverage provided on the autos are determined by the use of ten auto symbols ranging from symbol 21 through 31. Symbol 30 is used to provide the garage keepers coverage on autos. Symbols 21 through 29 closely correspond to the same coverage provided under the business auto form with the use of symbols 1 through 9.
The broad liability insuring agreement provides bodily injury and property damage liability coverage similar to that provided by the commercial general liability policy and the business auto policy.
The liability insuring agreement for garage operations other than covered autos promises to pay all sums an insured legally must pay for damages because of bodily injury or property damage when caused by an accident and resulting from garage operations other than the ownership maintenance or use of covered autos.
Garage liability for covered autos is provided for the named insured and anyone else while using the auto with the insured's permission, the insured's employees, if the covered auto is owned by that employee, and the insured's customers, if the insured is an auto dealership. However, certain restrictions apply to coverage for customers.
The liability insuring agreement for garage operations other than covered autos promises to pay all sums an insured legally must pay for damages because of bodily injury or property damage caused by an accident and resulting from garage operations involving the ownership, maintenance or use of covered autos.
Garage liability for garage operations other than covered autos is provided, for the named insured, the insured's partners, employees of the insured, and directors or shareholders while acting within the scope of their duties.
The garage policy provides liability coverage for products that are made or sold in a garage business. The policy also provides completed operations insurance which is subject to a deductible. Completed operations coverage would apply in the event of a claim that resulted from property damage to an auto as a result of work the insured performed on that auto.
The policy has an annual aggregate limit for garage operations other than covered autos and an each accident limit which applies to both auto claims and other than auto claims.
The garage keepers section of the policy covers the insured's liability for loss to a covered autos or auto equipment left in the insured's care while the insured is attending, servicing, repairing, parking or storing the auto in the garage operation. Garage keepers coverage is necessary because liability for such damages is excluded under the garage liability section of the policy with the care, custody, or control exclusion. The causes of loss that may be insured against are collision, comprehensive, or specified causes of loss. The specified causes of loss are fire, explosion, theft, and mischief or vandalism. The limit of insurance shown in the policy is the most the insurer will pay for each loss at each location listed in the policy. In addition to the limit of insurance the garage keepers policy pays supplementary payments that could be made to cover the cost of expenses incurred while the insurer is defending the insured against suits alleging covered losses.
Garage keepers insurance can apply on a legal liability basis, which means the insured must be legally obligated for the damages in order for the insurer to respond to a claim. The insured can also pay an extra premium for direct coverage. The direct coverage endorsement will pay for losses to customers cars without the usual requirement that the insured be legally liable. This endorsement is also known as goodwill coverage by many insured's because it preserves good customer relations when a customer expects to be paid for a loss even though the garage is not legally obligated to do so.
Garage physical damage insurance provides the same collision, comprehensive and specified causes of loss coverages available under the business auto coverage form. However, the garage form contains a number of exclusions that are not found in the business auto form. As with the business auto form the coverage can be written on a comprehensive basis or a specified cause of loss basis. The comprehensive insuring agreement states it will pay for loss to a covered auto or its equipment from any cause except collision, overturn, or a peril specifically excluded. The specified cause of loss insuring agreement states it will pay for losses caused by fire, lighting or explosion, theft, windstorm, hail or earthquake, flood, mischief or vandalism and the sinking, burning, collision, or derailment of a conveyance transporting the insured vehicle. The collision coverage pays for a loss to a covered auto caused by a collision with another object or overturn.
Transportation expenses and towing and labor coverage can be added for non-dealers only. Auto dealers physical damage coverage is provided for new or used autos held for sale by an auto dealership. When this coverage is desired it is usually written on a reporting form basis.
The limit of insurance under the physical damage coverage is the smaller of the actual cash value of the damaged or stolen property at the time of the loss or the cost to repair or replace the property with property of like kind and quality. Auto dealerships have other provisions that may determine the limit of insurance. A deductible would apply for comprehensive or specified cause of loss coverage.
When the insured is a non-dealer the Comprehensive coverage deductible does not apply to losses caused by fire or lighting.
When the insured is an auto dealership the deductible for specified cause of loss or comprehensive coverage applies only to losses caused by theft mischief or vandalism. Comprehensive and specified cause of loss coverage for auto dealers and non-dealers carries a per auto deductible, as well as a maximum deductible which is applicable for all loss in any one event. When collision coverage is added a deductible would apply for each covered auto.
Umbrella liability insurance provides excess liability coverage over several of the insured's primary liability policies. Most umbrella liability policies provide coverage that is broader than the insured's primary policies. An excess liability policy may be what is called a following form policy, which means it is subject to the same terms as the underlying policies; it may be a self-contained policy, which means it is subject to its own terms only; or it may be a combination of these two types of excess policies. Umbrella policies have three functions: (1) To provide additional limits above the each occurrence limit of the insured's primary policies; (2) To take the place of primary insurance when primary aggregate limits are reduced or exhausted; and (3) To provide broader coverage for some claims that would not be covered by the insured's primary insurance policies, which would be subject to the policy retention. Most umbrella liability policies contain one comprehensive insuring agreement. The agreement usually states it will pay the ultimate net loss, which is the total amount in excess of the primary limit for which the insured becomes legally obligated to pay for damages of bodily injury, property damage, personal injury, and advertising injury.
All umbrella liability policies contain an each occurrence limit of insurance. Some umbrella liability policies may have a separate limit that applies to all personal and advertising injury for one person or for the organization. Also, some policies are written with aggregate limits for only one type of loss. Other policies may have one or more aggregates for all losses. Umbrella policies can be written with several different variations of the aggregate limits. There are no standard umbrella policies.
This is an insuring agreement used in some umbrella policies. The agreement promises to make direct payment on behalf of the insured for those sums of money the insured becomes legally obligated to pay because of liability imposed upon the insured by law, or assumed under contract.
This is the insuring agreement clause found in most umbrella policies as opposed to the pay on behalf agreement. When the indemnity insuring clause is used, the insurer will indemnify or reimburse the insured for those sums of money the insured becomes obligated to pay by reason of liability imposed upon the insured by law, or assumed under contract.
The self insured retention is the amount of the loss an insured must pay before the umbrella policy would be required to respond. The self insured retention would only apply when a loss is excluded from coverage under the primary policy, but not excluded under the umbrella policy.
Required Underlying Limits is a requirement of the insurer. It requires the insured to have certain types and amounts of primary insurance before the umbrella policy can be written.
This coverage agreement obligates the insurer to pay all compensation and other benefits required of the insured by the workers compensation law or occupational disease law of any state listed in the policy. The coverage applies to bodily injury by accident and by disease.
Coverage (A) shows no dollar limit for the benefits provided since any applicable limits would be those established within the law. Benefits under coverage (A) are paid to the employee without regard to fault.
This coverage protects employers for their legal liability for bodily injury by accident or disease to an employee arising out of and in the course of the employee's employment when not covered under the workers compensation law. Before benefits are paid under this coverage, the employee must prove the employer is liable for the injury.
This amount is the most an insurer will pay under coverage (B) for all claims arising from any one accident, regardless of how many employees are involved in the accident. The standard limit is $100,000 for any one accident, which can be increased.
This is the aggregate limit the insurer will pay under coverage (B) for all claims sustaining bodily injury by disease during the policy period. The standard policy limit is $500,000, which can be increased.
This amount is the most an insurer will pay under coverage (B) for damages due to bodily injury by disease to any one employee. The standard limit of liability for each employee is $100,000, which can be increased.
This provides workers compensation coverages if the insured expands operations into other states not declared at the time the policy is issued or renewed. If the insured elects this coverage and operations begin in a state listed under other states, the insurer provides the same coverage as if the state was declared in the policy at the time of policy issuance.
Workers compensation laws of most states exempt some types of employment from workers compensation benefits. This endorsement amends the standard policy to provide coverage for employees with exempted occupations from the workers compensation act. When the endorsement is added it does not make employees subject to the workers compensation law, but it obligates the insurance company to pay on behalf of the insured, an amount equal to the compensation benefits that would be payable to those employees if they were subject to the workers compensation law of that state.
This is a federal act which is similar to the state workers compensation act. The federal act was designed to provide workers compensation benefits to employees who work in maritime employment upon the navigable waters of the United States and who are usually considered outside the scope of state workers compensation laws. When the USL&HWA endorsement is added to the standard policy it applies to work done in the states scheduled on the policy and extends the definition of the workers compensation law to include the USL&HWCA.
In some states, workers compensation law allows an insured to include or exclude Executive Officers and Partners, or both, from coverage. Adding this endorsement can designate the individuals not covered under the policy.
This is a factor that deals with the rating of the policy. The Experience Modification figure is based on the insured's loss experience. The factor is used to increase or decrease the manual rates of insurance.
There are six states that require all workers compensation insurance to be placed with their state fund. No private insurer is allowed to write Workers Compensation Coverage in the six states. The states are Nevada, North Dakota, Ohio, Washington, Wyoming and West Virginia.
Boiler & Machinery insurance covers direct damage to covered property when caused by a covered cause of loss. Covered property is any property that is owned by the named insured or is in the named insured's care, custody, or control and for which the named insured is legally liable. A covered cause of loss is a sudden and accidental breakdown of the insured's boiler and machinery equipment or any part of the equipment described in the policy. Boiler and machinery insurance is necessary because commercial property policies exclude explosion of steam boilers and breakdown of machinery.
The standard boiler and machinery policy contains three extensions of coverage. The three extensions are 1) Expediting Expense coverage, which pays the reasonable extra cost incurred to expedite progress after a loss; 2) Automatic Coverage which covers accidents to objects at newly acquired locations for up to ninety days after the named insured acquires the property; and 3) Defense Cost and Supplemental Payments which would apply when the insurer is defending the insured against claims or suits alleging liability for damage to property of others. Defense Cost and Supplementary Payments are payable in addition to the policy limit. Expediting Expenses are included in, and not in addition to, policy limits.
In addition to the three extensions the policy has four interior limits of $5,000 each, for 1) the cost of cleanup, repair or replacement, or disposal or hazardous substances; 2) damage resulting from contamination of covered property by ammonia; and 3) damage by water to covered refrigerating or air conditioning vessels and piping. These limits are part of and not in addition to the limit specified in the policy. A benefit of boiler and machinery insurance is the inspection service that insurers provide to the insured. Endorsements can be added to the standard boiler and machinery policy to provide coverage for business income, extra expense, and consequential losses.
This coverage is written only under the standard policy form. Coverage is provided for all insurable boiler and machinery equipment, including or excluding production machines. Coverage can also be written to cover particular types of boiler and machinery equipment.
This coverage can be written under the small business form to cover boilers and vessels equipment, including or excluding air conditioners/compressor units.
This coverage is also written under the small business policy. Many insured's refer to this form as the comprehensive form for small business since it covers a broader range of equipment. Coverage is provided for any boiler, any fired or unfired pressure vessel, any refrigeration or air conditioning equipment, and any mechanical or electrical equipment. Only certain types of business can qualify for the small business policy and property values can be no more than $5 million.
Under the small business form the limit of insurance is based on the estimated value of the insured's property.
This endorsement can be written to provide coverage on either a "valued" or an "actual loss sustained" basis. When the actual loss sustained option is used, the coverage pays only for the insured's actual loss of income. If coverage is written using the valued option, the insured is able to collect a predetermined amount of coverage for each day the business is interrupted because of an accident to an insured object. The coverage is subject to a per accident limit and a deductible that can be expressed as either a specified time period or a dollar amount. When the valued form is used the daily amount of insurance is paid regardless to the actual amount of loss.
This endorsement pays for the extra expense of maintaining operations after an accident to an insured item until normal operations can be restored. This endorsement excludes coverage for loss of income. To have coverage for loss of income and extra expense, the endorsement called combined business interruption and extra expense must be added to the policy.
This endorsement covers loss due to spoilage of specified property from lack of power, light, heat, steam or refrigeration, which results from an accident to an insured item.
The standard deductible is $250. Coverage can be written with more than one deductible. The insured can choose one deductible for a group of covered items and a different deductible for all other items. If a loss occurs involving more than one covered item, the higher deductible would apply.