better than garlic enchanted endorsements and policy enhancements to keep the e & o vampire away...
TRANSCRIPT
BETTER THAN GARLIC
ENCHANTED ENDORSEMENTS AND POLICY ENHANCEMENTS TO KEEP THE E & O VAMPIRE AWAY FROM YOUR DOOR
Presented by: Cheryl Koch, CPCU, CIC, ARM, AAI, AAM, AIM, AIS, ARP, API, AINS, AFIS, ACSR
Agency Management Resource Group
Lincoln, California
Commercial Property Endorsements
• Exclusion on the CP form eliminates coverage for loss due to the operation of ordinances or laws
• Ordinance or Law Coverage CP 04 05 closes this gap• Coverage A—Undamaged Portion of Building• Coverage B—Demolition of Undamaged Portion• Coverage C—Increased Cost of Construction
• Both damaged and undamaged• Covers excavations, foundations.
pilings and underground pipes
Commercial Property Endorsements• Coverage A is included in the Building limit and carries
the same coinsurance %• Coverages B&C have no coinsurance• Coverage C applies ONLY to minimum requirements of
the ordinance or law• Coverage C applies if the restored property is intended
for similar occupancy (unless the ordinance does not permit it)
• No coverage for non-compliance that preceded damage to the Building
• Proportional payment allowed for covered and uncovered causes of loss (e.g., wind and flood)
Commercial Property Endorsements
• Pollutant Clean Up and Removal—Additional Aggregate Limit of Insurance CP 04 07– Commercial Property Form gives $10,000 in the aggregate to
“EXTRACT” pollutants from land or water– This endorsement increases the amount of coverage on the CP
form• Per premises• Annual aggregate• For Covered Cause of Loss• That occurs during the policy period• Loss must be reported within 180 days
– Various companies may give more but usually an annual aggregate
Commercial Property Endorsements
• Debris Removal Additional Insurance CP 04 15– Commercial Property Form gives 25% of gross loss plus
$10,000 in certain circumstances– See example– This endorsement replaces the $10,000 and substitutes
the limit in the endorsement– Can be useful when the Building contains subtances that
require special and expensive handling of debris
DEBRIS REMOVAL
Amount for Removal: 25% of (paid loss plus deductible)
Example: Loss $80,000
Deductible - $1,000
Paid Loss $79,000
Amount Available for Debris Removal:
= 25% of ($79,000 + $1,000)
= 25% of ($80,000) = $20,000 Available
Loss Less than Policy Limits=25% of [amount paid plus the deductible] PLUS $10,000, if needed (for actual expense incurred)
Loss at Policy Limits=$10,000 maximum limit paid, if needed
Commercial Property Endorsements
• Functional Building Valuation CP 04 38– Replaces the valuation clause in the CP policy– In the event of a total loss, agrees to replace the
damaged Building with a less costly one that is functionally equivalent
– In the event of a partial loss, endorsement agrees to pay cost to repair or replace with less costly material
– Includes Ordinance or Law (included in limit)– No coinsurance– Similar endorsement available for
Personal Property
Commercial Property Endorsements
• Loss Adjustment Endorsement CP 12 60– Add to Property Policy to facilitate claims handling
on property and Equipment Breakdown Policy– Equipment Breakdown must have its own version– No need if both coverages on same policy
• Additional Covered Property CP 14 10• Certain property is not covered under the BPP,
such as paved surfaces, excavations, foundations, etc.
• Adding contents into building definition• Takes building rate
Commercial Property Endorsements
Commercial Property Endorsements
• Additional Property Not Covered– Items considered to be covered can be removed
• Pools, TIBs, items in vaults, items in open yards
Commercial Property Endorsements
• Leased Property Endorsement CP 14 60– Allows leased property to be written on a valued basis– Value of the lease vs. RC
Commercial Property Endorsements
• Business Income From Dependent Properties Broad Form CP 15 08– Used when damage to an off-premises location could
result in a “suspension” of “operations”– Contributing locations—provide raw materials to the
insured’s manufacturing operation OR a manufacturer or distributor who provides products to the Insured
– Recipient location—the Insured depends on them to distribute their products
– Manufacturing location—other entities manufacture products under the Insured’s name
– Leader location—attract customers to the Insured’s location
– Miscellaneous location (limited coverage)
Commercial Property Endorsements
Dependent Property
Recipient Contributor
Car Manufacturer Outsourced enginemanufacturer
Leader Dependent Property
Grocery Cleaners next door
Commercial Property Endorsements
Drop Your Pants Here
Commercial Property Endorsements
Dependent Property
Manufacturer
Rainbow Midwest Manufacturing RepresentativeThe EXCLUSIVE supplier of Rainbow Products
Commercial Property Endorsements
• Ordinance or Law Increased Period of Restoration CP 15 31– Extends definition of “period of restoration” to
include time required to meet building ordinances
– Should be used whenever
Ordinance or Law coverage is
provided for Direct Loss
Commercial Property Endorsements
• Civil Authority Change(s) CP 15 32 – First introduced in 2007– CP Additional Coverage is limited to 4 weeks
and a 1 mile radius from the damaged property– Endorsement allows for selection of Coverage
Period and Radius (in miles)
Commercial Property Endorsements
• Radio or Television Antennas—Business Interruption or Extra Expense CP 15 50– Exclusion in the BI/EE form– Includes satellite dishes– Endorsement removes the
exclusion
Commercial Property Endorsements
• Manufacturers Selling Price CP 99 30– Policy automatically has Selling Price for “Sold
but not delivered”.– This allows selling price on all finished stock
Commercial Property Endorsements
• Leasehold Interest Coverage Form– Coverage will include:
• Tenants' lease interest
• Bonus payments
• Improvements and betterments
• Pre-paid rent
Commercial Property Endorsements
• Off Premises Services (formerly Power Failure)- Direct Damage– Recovery if communications, power or water source off
premises sustains damage and then damages insured’s property– Can include overhead transmission lines
• Off Premises – Time Element CP 15 45 (changed to Utility Services with 2007 edition)– Recovery for lost income resulting
from above
Commercial Property Endorsements
• Limitation on Loss Settlement—Blanket Insurance (Margin Clause) CP 12 32– Rather than having the entire blanket limit
available to a loss to any one building, the loss is LIMITED to
– The selected margin clause % times the value of the building shown on the SOV
Commercial Property Endorsements
• EXAMPLE:– Blanket limit of $4,500,000 for Buildings 1, 2, 3– W/O Margin Clause, total available for a loss to
Building 1 would be $4,500,000– W/ Margin Clause, total available for a loss to
Building 1 is $1,000,000 (shown on SOV) x 120% (example), or $1,200,000
NEW in 2013
• Secondary dependencies (time element)• Food contamination• Equipment breakdown option• Discharge from sewer, drain or sump• Increase in rebuilding cost following disaster• Interruption in wastewater removal service• Production and processing operations (rental
properties)
Business Auto Coverage Form Endorsements
• Fellow Employee Coverage CA 20 55– Deletes the Fellow Employee exclusion in the
Business Auto Coverage Form– Why is this necessary?
• Employee Hired Auto CA 20 54
– Designed to provide broader protection to employees who rent cars in their own name, for their employer's business
– Previously only “Named Insured” was covered for Hired Autos
Business Auto Coverage Form Endorsements
Business Auto Coverage Form Endorsements
• Drive Other Car Coverage CA 99 10 – Most frequently needed endorsements for BAP – Used for liability, medical payments, uninsured/underinsured
motorists, physical damage coverage for specifically named individuals while using a nonowned auto for personal use
– Endorsement is needed when the individual's company auto is the only vehicle regularly available for individual's use. Note, however, that prior to the 2010 edition, only the named individual's spouse, and not family members, has coverage under this endorsement for bodily injury liability or physical damage.
– The 2007 version let’s you name an individual and coverage extends to their family members
Business Auto Coverage Form Endorsements
• Individual Named Insured Endorsement CA 99 17 – When a commercial auto policy covers an individually owned
auto (i.e., at least one named insured is an individual), endorsement must be attached.
– Provides family drive other car coverage for the named insured, spouse, and family members at no charge. It also deletes the fellow employee exclusion as it relates to the named insured and family members. In other words, if the named insured or a family member causes injury to a fellow employee, the fellow employee exclusion will not preclude coverage for any resulting liability.
Business Auto Coverage Form Endorsements
• Stated Amount Coverage CA 99 28– When an auto is insured for physical damage coverage,
the limit of insurance in most cases is the actual cash value (ACV) less a deductible.
– Endorsement imposes a cap on the amount of coverage provided for described vehicles. The stated amount basis does not actually replace actual cash value.
– Instead, the insurer will pay the least of ACV, the cost to repair or replace, or the stated amount.
Business Auto Coverage Form Endorsements
• Employees as Insureds CA 99 33– This endorsement is used to extend nonowner
liability coverage to cover the individual liability of employees while they are using their own autos in the employer's business
– Without endorsement, the auto coverage forms specifically exclude coverage for the liability of an employee if the covered auto from which the accident arises is owned by that employee or a member of his or her household
Business Auto Coverage Form Endorsements
• Pollution Liability Broadened Coverage CA 99 48– This endorsement deletes that portion of the
pollution exclusion that relates to discharges of pollutants that are in or upon, being transported or towed by, being loaded onto, or being unloaded from a covered auto. However, the extension of coverage does not apply to liability assumed under any contract or agreement.
Business Auto Coverage Form Endorsements
• Covered Auto Designated Symbol CA 99 54– The various auto coverage forms display symbols to
describe covered autos for each of the coverages available
– The symbols in the coverage forms cover descriptions and range from symbol 1 (any auto) in the business auto policy to symbol 71 (nonowned autos only) in the motor carrier policy
– This endorsement allows for any designation that is agreeable between the insured and insurer and may be used to include or exclude any category type of owned autos for any coverage
NEW in 2013
• Withdrawal of Garage Form• Introduction of Auto Dealers form
Workers Comp and Employer’s Liability Endorsements
• Alternate Employer Endorsement WC 00 03 01 A– This endorsement applies only with respect to bodily injury
to your employees while in the course of special or temporary employment by an alternate employer in the state named in Item 2 of the Schedule.
– Part One (Workers Compensation Insurance) and Part Two (Employers Liability Insurance) will apply as though the alternate employer is insured.
Workers Comp and Employer’s Liability Endorsements
• Joint Venture as Insured WC 00 03 05 – This endorsement is used to add coverage for members
of a joint venture when the insured is a joint venture– In the absence of this endorsement, if the insured is a
joint venture, its members are not covered as separate entities
– This endorsement makes it clear that coverage does not extend to the separate operations of the joint venture members
Workers Comp and Employer’s Liability Endorsements
• Voluntary Compensation and Employers Liability Endorsement WC 00 03 11– This endorsement provides voluntary coverage for the
workers compensation benefits of a given jurisdiction to employees who are not covered by state workers compensation law
– Exempt employees who are not eligible for workers compensation benefits can sue the employer for damages in the event of an on-the-job injury resulting from employer negligence
Workers Comp and Employer’s Liability Endorsements
• Voluntary Compensation and Employers Liability Endorsement WC 00 03 11– Employees who may not be covered under the workers
compensation law of a given state include the following• Domestic workers • Agricultural workers • Volunteers • Employees injured while temporarily outside of the United
States or Canada • Employees injured while on indefinite assignment outside of
the United States or Canada
Workers Comp and Employer’s Liability Endorsements
• Employee Leasing Client Exclusion Endorsement WC 00 33 22– This endorsement is designed for attachment to the client's
workers compensation policy when it is the responsibility of the employee leasing company to provide WC on employees leased to the client
– It excludes under the client's policy any liability for bodily injury to employees leased from the employee leasing company named in the endorsement
– Attach Alternate Employer Endorsement to Leasing Company Policy
Workers Comp and Employer’s Liability Endorsements
• Employers Liability Coverage for Corporate Officers– This endorsement is used to provide coverage
for the individuals named or described in the endorsement who have elected to be subject to the workers compensation law of the state shown in the endorsement, as permitted by that law
Workers Comp and Employer’s Liability Endorsements
• Stop Gap Endorsement – Contractors with operations in monopolistic states (North
Dakota, Ohio, Washington, and Wyoming) must purchase workers compensation insurance from the state fund.
– Coverage purchased through these funds only applies to statutory benefits payable under the WC law; there is no separate employers liability coverage for liabilities arising out of the employment that fall outside the workers compensation statute.
– Contractors with operations in monopolistic states have an employers liability coverage gap with respect to these states.
– The employers liability coverage endorsement (WC 00 03 03) eliminates this coverage gap in the monopolistic states
Other Workers Comp Endorsements
• USL&H• Amendment to Coverage B—Maritime
(Jones Act)
Commercial General Liability Endorsements
• The need for AI status• CG 20 10
– Evolution– Current status– CG 20 37– What, you mean there are other AI endorsements?
Commercial General Liability Endorsements
• Coverage for Injury to Leased Workers CG 04 24– CGL excludes coverage for such injuries because of
definition of “employee”– This endorsement creates an exception to the
exclusion:– “Employee” does not include a “leased worker” or
“temporary worker”
Commercial General Liability Endorsements
• Employee Benefits Liability Coverage CG 04 35– Applies to acts, errors or omissions in the
administration of an employee benefit program– Not to be confused with EPLI or Fiduciary Liability– Can be included in an EPLI or Fiduciary Liability
policy…BUT
Commercial General Liability Endorsements
• Limited Product Withdrawal Expense CG 04 36– Aggregate limit– Deductible applies per withdrawal– Participation % included– “Cut off date” AKA: Retroactive Date– Separate coverage agreement
NEW in 2013
• New AI endorsements• Primary and non-contributory option• Change to liquor liability for BYO
QUESTIONS?