Indemnifies an insured party who suffers a financial loss because property has been damaged or destroyed.
Consists of any property at the insured location(s) owned by, leased to, operated by, or legally obligated to insure, subject to certain policy exclusions.
Only covers losses arising from perils specifically named in the policy.
Defined as all physical losses to property of every description except for exclusions, i.e., flood.
The most the insurer will pay for loss or damage in any one occurrence is the limit of insurance stated in the policy declarations.
An endorsement which provides loss settlements without deduction for depreciation.
A basis of loss settlement for property insurance. Depreciation is deducted based on the age and condition of the property.
The amount of insurance is agreed upon at the beginning of the contract by both parties. A signed statement of values must be signed each year and submitted to the insurance company.
Most building and business property policies have a co-insurance clause that 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. (See “A Layman’s Guide to Co-Insurance”)
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 its full value because of inflation. An inflation guard coverage will increase the policy limit gradually during the policy term to coincide with inflation.
This endorsement extends your cause of loss to include damage that results directly from an earthquake. Coverage is provided for replacement of buildings only.
This endorsement extends coverage for damage resulting from the backing up of the sewer system.
The standard Replacement Cost Endorsement in a property insurance policy usually excludes increased building costs due to the imposition of any by-law or ordinance. This restriction may be removed by inclusion of a By-laws Endorsement.
That portion of a claim, which must be borne by the insured before the insurer is obligated to contribute.
Since the concept of Co-Insurance is a fundamental principle of property and business continuation insurance, it is imperative that you understand if before considering the amount of insurance you buy. In fact, we feel this is so important principal we have provided the following detailed explaination.
Co-Insurance is simply an agreement between You and the Insurance Comapny, whereby you agree to maintain coverage up to a stated percentage of the value * of the property you wish to insure (usually 80% of 90%).
Should a loss occur, consideration is ten given to the amount of insurance carried compared to actual values prior to the loss. If the amount of insurance is within the agreed Co-Insurance percentage requirement, the loss is paid in full, up to the policy limits. If, however, the amount of insurance that you carry is below the agreed percentage You and the Company then share the loss.
EXAMPLE: Assume the value of the property you are insuring is $1,000,000, and the policy contains a 90% Co-Insurance clause; this means you should be carrying at least $900,000 coverage. If you were only carrying $500,000 coverage and had a loss of $400,000, the Insurance Comapny would pay based on the following formula:
Amount of Insurance Carried
-------------------------------------- x Amount of Loss = Claim Payment
Value of Property x 90%
--------------------------- x $400,000 = $222,000 (Subject to applicable deductible)
[$1,000,000 x 90%]
In this example, you would suffer a $178,000 Co-Insurance penalty!
A regular and careful review of the value of your insured property is essential if Co-Insurance penalties are to be avoided. We recommend you insurable values be frequently review by a competent, independent appraisal company.
* The value to be insured is dependant on whether your policy basis of claims settlement is on Actual Cash Value (depreciated) or Replacement Cost.
This policy provides payment in the event of a liability loss: that negligent act resulting from bodily injury, property damage, or death. It protects your business against liabilities that arise from your daily operations, the products you sell, or the services you render.
There are two commercial general liability coverage forms available:
The occurrence form covers bodily injury or property damage claims that originate during the policy term, regardless of when the claim is reported.
Policies written on a claims made basis will only cover claims presented during the particular year the policy is in force, for incidents which occurred during the same policy year, or for any previous year noted in the claims made policy (retroactive date).
The retroactive date shown in the policy declarations can be 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 General Aggregate Limit is the most money the insurer will pay under a certain coverage for all claims occurring during the policy term.
This coverage protects your business in the event of a loss due to bodily injury or physical damage arising from ownership, maintenance, or any use of the insured premises. It also covers the operations covered by your firm.
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 its intended purpose.
Coverage for the legal liability for claims arising from bodily injury and property damage due to business operations including premises, products and completed operations.
This coverage pays for medical expenses incurred by persons as a result of injury due to an accident on your premises. The coverage pays to the established limit, regardless of who was at fault.
Coverage is provided for damage to the premises which you lease or rent, but do not own.
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 or private occupancy of a room. Coverage for libel and slander is also provided in the policy.
This coverage pays for damages occurring in the course of oral or written advertisement that disparages, libels, or slanders a person or organization’s goods, products, or services. Coverage for these offenses is provided under advertising liability coverage only if they occur during the course of advertising the named insured’s own goods, products, or services.
An occurrence is an accident which occurs sustaining damage to others or their property. This is extended to include continuous or repeated exposures to harmful conditions in specific and defined instances.
Provides coverage against the legal liability of an employer for injuries to employees, as opposed to liability imposed by a Worker’s Compensation law. Contingent coverage extends for claims made by employees who are covered under Workmen’s Compensation.
Applies coverage in situations where a worker does not come under any Worker’s Compensation Law.
Provides coverage against the legal liability imposed due to errors or omissions in the administration of a group benefit program.
This coverage protects your business when liability arises from obligations you have assumed under specific contracts with others.
This endorsement expands the definition of property damage to include property in the care, custody, or control of the insured for property which is not normally insured if damage is done as a result of the insured’s negligence.
A claim by one insured under a policy against another insured under the same policy. This endorsement covers the insured whom the claim is made, to the same extent as if a separate policy had been issued to each, without, however, increasing the total limits of the policy available to all insured.
An endorsement in which the person insured is amended to include any employee of the Named Insured while acting within the scope of his duties.
An endorsement in which the coverage is extended to any subsidiaries which the company may have that have not been included in the actual registration of the policy.
This extension provides for negligence resulting from your company nurse. This coverage is secondary insurance to the nurse’s own primary insurance.
Protects the insured who is responsible for activities or a sub-contractor who performs operations on behalf of the insured.
Provides protection to the employer against claims arising from employees who use their own vehicles in the course of their employment. In the event of an accident, the employee may have inadequate insurance to respond and may be sued by the third party. The third party can in turn sue the employer if the employee was using his car in the course of his employment.
ONTARIO AUTOMOBILE POLICY (OAP1)
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.
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 while 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 applies and payment for the difference can be made. The two coverages are mutually exclusive and do not overlap or duplicate each other.
This 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.
This 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 (48) hours after the theft.
This provides coverage against loss from fire, lighting, or explosion, theft, windstorm, hail, or earthquake, flood, mischief or vandalism and sinking, burning, collision or derailment of a conveyance transporting the covered entire auto.
Limitation of amount to place maximum coverage of collision/comprehensive at Actual Cash Value or stated amount, whichever is lesser.
Value of Vehicles. States a specific vehicle value.
Coverage for Transportation Replacement. To reimburse insured for reasonable expense incurred for rental of a substitute vehicle. Some contracts have specific limits.
Monthly Reporting Fleet Endorsement. All owned vehicles must be scheduled. Used with fleets to spread payment to monthly expenses based on receipts or mileage.
Blanket Fleet Endorsement. Insures vehicles on a blanket basis. Premium adjustment extends for all changes throughout the policy term.
Liability for Damage for Non-Owned Automobile. Covers insured if responsible for damages incurred by him to a vehicle not owned by him but in his custody, care or control.
Reduction of Coverage for Named Persons. Reduces the coverage when specific individual operating the vehicle.
Excluding Driver. Eliminates all coverage except Accident Benefits.
Excluding Operation of Attached Machinery. Excludes liability for operation of attached machinery, i.e. snowplow.
Waiver of Depreciation. It removes the right to deduct depreciation from the value of your automobile when settling a claim for loss or damage.
Waiver of Depreciation for Leased Vehicle. It removes the right to deduct depreciation from the value of your automobile when settling a claim for loss or damage.
A policy covering the same risk at a number of perhaps unspecified locations possibly over a wide area (even worldwide). Usually includes goods being frequently moved from one location to another and includes coverage while in transit.
Provides coverage if accounts receivable records are damaged by an insured peril making them uncollectable, including cost to reconstruct such records.
This affords coverage in the event those items such as valuable papers and records, consisting of books of account, manuscripts, notes, customer lists, etc. are damaged by an insured peril.
Provides coverage against all damages to glass, lettering, ornamentation caused by accidental breakage of such glass which occurs during the policy period, subject to the exclusions in the policy.
Provides protection for materials and/or equipment while in transit and away from the listed premises.
Provides all risk protection on the premises for computer equipment and software. Mechanical and electrical breakdown can be purchased for an additional cost subject to a maintenance contract.
Coverage can also be purchased for off-premises items such as laptops. Higher deductibles generally apply to break down coverages.
Media coverage includes the cost of reconstruction of the data.
The garage policy form is designed to cover businesses engaged in selling, servicing, storing, or parking automobiles. There are two types of garage policy forms; garage liability and garage automobile.
Premises coverage applies in the event of a claim occurring on the insured premises, e.g. slip and fall.
Products operations coverage applies in the event of a claim for products sold in a garage business, e.g. tires.
Completed operations coverage applies in the event of a claim for property damage to an auto as a result of work the insured performed on that auto.
Applicable to situations where there is a garage: -
Coverage is provided only for autos not owned, leased, hired, or borrowed by the named insured. Coverage includes autos owned by the 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 the use in the named insured'’ business.
Excluding Owned Automobiles. Excludes coverage under garage policy for vehicles owned or leased by the insured.
Open Lot Theft Endorsement – Owned Automobile. Loss or damage caused by theft to owned vehicles to any open lot or unroofed space is covered except theft of entire automobile.
Open Lot Theft to Customer Automobile. Loss or damage caused by theft to customer vehicles to any open lot or unroofed space is covered except theft of entire automobile.
Additional Insured Endorsement Broad Form. To provide coverage for named person or automobiles, furnished for their use.
Crime Coverage provides coverage for loss of money and securities as a result of burglary, robbery and theft.
Burglary – the visible signs of forced entry or exit.
Robbery – involves threat or threat of violence towards insured.
Theft – provides broader coverage, but does not include mysterious disappearance.
Employee dishonesty is considered a criminal act when 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.
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.
Theft is any act of stealing and disappearance is an unknown cause 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.
Applies while the premises are open for business and for a messenger going to and from the bank or security box.
Includes inside and outside robbery or holdup coverage, but also extends to include overnight coverage on the premises or at a messenger’s residence and may include mysterious disappearance.
Boiler & Machinery provides coverage for losses specifically excluded under the property policy such as explosion of pressured vessels, electrical arcing and mechanical breakdown. Coverage is provided not only for the object itself, but also the insured’s building and contents.
The failure of safety valves or firing cut off mechanisms, defective material, cracking, fracturing, weld failure, tube bulging or rupturing and overheating.
For example the breakdown of refrigeration, air conditioning, electric motor burnout, arcing of electrical distribution panels and transformers.
Wear and tear, or corrosion (because it is the nature of any boiler or machine that maintenance repairs are required periodically.).
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 pre-determined 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 of 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.
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.
Provides excess protection over the underlying liability insurance policies. An umbrella policy increases overall limits of liability carried to protect against large or catastrophic losses and also provides additional coverage that may not be included in underlying policies subject to the umbrella policy exclusions.
All umbrella liability policies contain an “each occurrence limit” of insurance. 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 the insured must pay before the umbrella policy is required to respond. The self insured retention only applies when a loss is excluded from coverage under the primary policy, but not excluded under the umbrella policy.
This 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.