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Liability |
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AUTOMOBILE
LIABILITY |
Litigation may result when the business insurance program
fails to apply to loss caused by a vehicle not owned by the business.
One example of this risk is when employees
use their personal vehicles to conduct company business. |
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GENERAL
LIABILITY |
The basic
risks covered by general liability insurance are loss arising from the
premises or loss arising from operations away from the premises. Examples
of businesses with large premise exposures are hotels, theaters, and shopping
malls. Contractors are the prime example of businesses with large operations
exposures. |
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EXCESS
LIABILITY |
When the
amount of insurance required is large, the insurance broker arranges the
high limits of liability in a layered program using multiple insurers.
One important issue in this coverage is to have the liability coverage
apply uniformly throughout the primary and excess policies. Without uniformity,
gaps in coverage may arise that may affect claims settlements. |
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PRODUCTS
LIABILITY |
Products
liability is part of the Commercial General Liability (CGL) policy used
by the majority of insurers. Because it covers separate risks from the
rest of the CGL, and because it usually has separate terms and conditions
and limits of liability, it is often viewed as a separate coverage. The
life expectancy of products and therefore, the duration of products liability
exposures, varies widely. For example, building materials (piping, insulation,
etc.) may be in use for years, while food products are usually consumed
quickly. Mergers and acquisitions present important products liability issues. Special attention must be paid to the outstanding, potential products liability of the acquired entity. How that risk is to be insured depends on whether it is a stock sale or an assets sale. |
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EMPLOYMENT
PRACTICES |
Unlike the CGL policy, employment practices liability coverage is written on a claims-made basis, which presents a different set of issues than occurrence coverage. One such issue is the contrast between an insurance application for first time coverage versus a renewal application for existing coverage. Careful attention must be paid with the former to avoid misrepresentation. Once coverage is in place, the insured should be sensitive to the options for protecting its coverage, such as notice of potential claims and extended reporting period coverage. | ||
PROFESSIONAL
LIABILITY |
Professional
liability covers wrongful acts made while performing professional service.
This insurance category includes coverages such as Directors and Officers
(D&O), Agents and Brokers E&O (errors and omissions), Architects
and Engineers E&O, and Lawyers E&O. There are additional policies
designed for other professions. In D&O coverage, completion of the application and polling of the directors and officers and anyone else subject to coverage must be done diligently to avoid misrepresentation. Coverage may apply to the corporate entity, as well as to the individual directors and officers. The policy forms are ‘non-standard’, meaning that no two insurance company’s coverage terms and conditions will be exactly the same. This requires that the broker and the insured use due diligence in reviewing and comparing multiple insurers’ policy forms. |
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contact
Brian Gagan
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