Insurance Illustrated | August 21, 2020

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for the week of August 21, 2020

Education + Analysis for the Independent Agent

Categories Included In This Week's Edition

Contractual Risk Transfer / Additional Insured / Certificates of Insurance * Commercial Property * Personal Auto Issues * Insurance Laws & Statutes / Coverage Resources * Answering Your FAQs

Contractual Risk Transfer / Additional Insureds / Certificates of Insurance

Adding End Users as AIs to Manufacturers’ CGL Policies

Your insured, a manufacturer, sells products that a very large customer buys and uses. The customer wants to be an additional insured on the manufacturer’s policy. The underwriter says that’s not possible. They can add a vendor as an AI, but not an end user. Is this correct?

Does Additional Insured Status Replace the Need for a Waiver of Subrogation

Lower tier contractors seem to be fighting back on some contractual insurance requirements – even to the point of making improper claims. One in particular is that making another party an additional insured negates the need to waive recovery rights against that party (often referred to as a waiver of subrogation). Well, these risk management mechanisms have different outcomes and only slightly overlap.

Construction Site Bodily Injury Exclusion Applies to Both Upstream and Downstream Employees

Over the past few years liability insurers have been adding endorsements to attempt to limit their exposure for bodily injury claims on construction sites (not to mention for property damage). One way that insurers have attempted to limit such exposure has been to amend their CGL policy’s “employer’s liability” exclusion to preclude coverage for bodily injury to employees of “any insured” -- as opposed to the standard language, which applies to preclude coverage for employees of “the insured.”

Commercial Property

4 Commercial Property Endorsements You’ve Never Heard Of But Should Know How to Use

ISO offers over 200 commercial property endorsements. Some of them are not good for the insured, but many allow the insured to provide coverage and protection not found in the unendorsed property policy. There are four you may have never heard of or seen used, but they are incredibly useful in the right situation.

Building Codes Turn Partial Property Losses into Total Losses

Few commercial structures fully meet the applicable jurisdictional building codes and regulations of the county, city, town, borough, village or township in which they are located. Building codes are routinely reviewed, revised and updated, usually a result of newly developed technology or advances in construction methodologies or materials. Noncompliance has the potential to cost your insured building owner thousands of dollars in out-of-pocket expenses following a "major" property loss. Ordinance or law endorsements are designed to fill coverage gaps existing in the unendorsed commercial property policies and business income forms related to the additional costs and time associated with the enforcement of changes in local building codes.

Are You Overlooking a $25,000 to $500,000+ Property Exposure?

A mural is a very real insurance exposure. One underwriter reported writing $500,000 coverage on an exterior mural. Just for the mural, NOT the building. Just an “average” mural (painted by a local, unknown artist) can cost the building owner between $10 and $20 per square foot. Meaning that even a relatively small mural (20x20) could cost up to $8,000 to have redone.

Personal Auto Issues

Adjusters Say the Darnedest Things

I've often said that it's inexcusable when a claim is denied for no other reason than "It's not covered." The insured is owed a reason for a claim denial, by contract or law. However, sometimes when I hear the reason, I think perhaps that it's better I didn't know because, to paraphrase Art Linkletter, "Adjusters sometimes say the darnedest things!"

PAP Coverage for Damage Due to “Freezing”

The temperature got so cold that the vinyl flooring in an insured travel trailer cracked. Is this damage excluded by the “freezing” exclusion in the ISO Personal Auto Policy or does “freezing” only refer to the liquids in the vehicle?

Top 10 Reasons to Purchase the Rental Car Damage Waiver

Although most damage waiver fees are considered outrageous, the insured is best advised to purchase the waiver for short-term rentals. This is not only in the best interest of the insured, but also the agent since an inadequately covered loss may result in the loss of an account or worse, an E&O claim.

Insurance Laws & Statutes / Coverage Resources

Workers’ Compensation Extraterritorial/Reciprocity Statues by State

Download this chart that details workers’ compensation extraterritorial/reciprocity statues by state.

Answering Your FAQs

Nonrenewal of D&O Liability Insurance - Are Directors and Officers Still Covered?

An agent asks: A statewide landlord association board of directors of which I am a member decided not to renew their D&O liability insurance citing my state’s nonprofit corporation act as the basis for their decision. Does this mean D&O insurance for nonprofits is no longer needed or does it just greatly reduce the risk?

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