Insurance Illustrated | June 19, 2020

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for the week of June 19, 2020

Education + Analysis for the Independent Agent

Contractual Risk Transfer / Additional Insureds / Certificates of Insurance

Certificate of Insurance Questions and Answers

Certificates of insurance account for more headaches at the agency level than just about any other issue. Because COIs create so much angst, the VU regularly conducts webinars regarding them. Out of these webinars come questions. In this article, we attempt to answer many of these questions.

3 New Exciting Construction Risk Endorsements

In 2019, ISO introduced three new construction-related endorsements. Two extended automatic insured status for completed operations and one waiving subrogation rights when required by contract. The industry asked and received.

The Anatomy of a Hold Harmless and Indemnity Agreement

Although we know that interpreting contracts is a matter of law, because our customers routinely execute hold harmless and indemnity agreements with all manner of entities, knowledge of these contractual provisions is of primary importance. It is important that you have insight to help you better understand the workings of these agreement and how your customer’s CGL policy may or may not provide coverage for the liability created by such agreements.

Crime

ISO’s “Fraudulent Impersonation” Crime Endorsement

The exposure to loss of money, securities, or other property due to trick, scam, etc. has been around for millennia, but from an insurability standpoint, traditional “ISO standard” insurance products have excluded this exposure as a business risk. Until now.

ISO's 2000 Crime Program

In 1986, ISO introduced a new Crime program which replaced numerous nonsimplified policies and hundreds of endorsements. ISO has learned that there is a general dissatisfaction with the approach for rating crime coverages. In this article, I'll give you an overview of how they have solved this "problem."

Coverage for Loss Due to Credit Card Fraud

Your insured accepted an order via the internet for products that he sells. He verified that the credit card was valid through a service that he uses. It was not until several days later that the service that he uses advised him that the credit card had been stolen. He shipped the product that he sold and is now without the product and lost the income. Is there any insurance product out there to cover this exposure?

Flood

New Flood Insurance Manual

The National Flood Insurance Program (NFIP) updated its Flood Insurance Manual effective April 1, 2020. Following are links to the updated manual appendices.

Flood Policies, Condo Units, and Additions and Alterations

In many states, what is covered under an HO-6 and a condo association master policy is governed by state law. That may not be the case when there is a flood claim and federal law pre-empts state law. For example....

HOA, NFIP, RCBAP, GP

If a homeowners association (HOA) is not established as a condominium, the Residential Condominium Building Association Policy (RCBAP) can’t be used. This can create several problems, particularly if someone tries to use the RCBAP anyway.

Trends & Insights

It’s Called Underwriting! Maybe You Heard of It

Insurance carriers are required to make decisions regarding which endorsements to add, which ones to remove and how best to structure the coverage to protect both the insured and the insurance carrier. It’s called underwriting. Sadly, neither side, the agent or the underwriter, fully understand what constitutes “underwriting.” Too many underwriters believe a system-generated endorsement is a required endorsement that is not able to be removed. Likewise, many agents believe the carrier should remove any endorsement the agency requests. Neither extreme is true, there is a middle ground called underwriting.

Does This Sound Like YOUR Underwriter?

I asked agents from all over the country to recount some of the strangest, most unusual, or simply irritating situations involving underwriters. Here are some of their responses.

Are You One of ‘Those’ Agents?

I asked underwriters from all over the country to recount some of the strangest, most unusual, or simply irritating situations involving agents. Here are some of their responses.

Miscellaneous & Professional Liability

How Does a ‘Person’ Become Legally Liable?

Liability policies, whether the HO, PAP or CGL, respond when the insured is judged to be “legally liable” for the injury or damage. But how is “legal liability” determined? That is the question answered in this short article.

Read the Policy You’re Selling

This may be the most important coverage article you read this year. It may be the most important coverage article you’ve ever read. Please read it. And please have your colleagues read it. If you work in an agency, send a link to the article to your underwriters, marketing reps, and claims people. RTFA…Read The Article!

ISO's Professional Liability Forms

Effective June 1, 2017, Insurance Services Office (ISO) introduced the new Miscellaneous Professional Liability Policy (MI 00 01) along with a multitude of endorsements. This is the first in a series of insurance programs designed to address the professional liability needs of various risk types. These new forms are housed in Division Sixteen – Professional Liability – Other Than Medical of the ISO Commercial Lines Manual.

Insurance Laws & Statutes / Coverage Resources

Eliot Spitzer, Bid Rigging, and Commission Disclosure Statements– Not to Dredge Up Old Pains

Eliot Spitzer, former New York Attorney General, sued Marsh & McLennan Cos. on October 14, 2004, for supposed bid rigging and other misdeeds and misinformation. This suit led to laws requiring insurance agents and brokers to disclose who they represent (the carrier or the insured), the sources of income, and sometimes the amount of income. Fifteen states currently have commission disclosure laws on the books possibly as an indirect result of Spitzer’s suit.

Answering Your FAQs

How Does the Business Income Policy Respond to a Concurrent Covered Loss?

An agent asks: Several of my clients’ have suffered damage as a result of the riots in the area. However, prior to the riots they were already closed as a result of state-wide COVID-19 closures. How will the business income policy respond? Will loss payment be affected by the previous closure order?

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