Alphabetical Listing

ACCOUNTS RECEIVABLE

Coverage is available to pay those amounts you cannot collect from customers, because of loss of or damage to records by fire, water damage, or other covered event. The coverage is based upon current and historical receivable trends, and bank records. No insurance is provided for accounts which are uncollectable for business reasons.

"ALL RISKS OF PHYSICAL LOSS OR DAMAGE"

The "all risk" insuring agreement provides coverage on any risk of physical loss or damage not otherwise specifically excluded. Care must be taken in reading the definitions, conditions and exclusions of the policy, since no insurance policy provides coverage against every cause of loss. This terminology, while broad, is subject to limitations, and will vary from policy to policy.

Typical exclusions are of loss caused by earthquake, flood or surface water, war, nuclear damage, wear, tear, rust and latent defect, insects, birds and animals. Some types of water and electrical damage are normally covered, other types are not. The actual policy provisions must be read to determine the coverage on any specific occurrence.

AUTOMOBILE COMPREHENSIVE DAMAGE

Damage other than that caused by collision with another object or by overturn.

AUTOMOBILE HIRED CAR LIABILITY

Contingent coverage for liabilities incurred when a vehicle has been hired for short term use, supplemental to, not instead of, the owner's own policy. It provides that insurance of your own choosing will be available in the event of loss.

AUTOMOBILE HIRED CAR PHYSICAL DAMAGE

Contingent coverage for damage to a vehicle that you have on temporary hire. It is supplemental to, not instead of, the owner's own policy. The coverage provides the same forms of insurance usually provided on your own vehicles.

AUTOMOBILE NON-OWNED LIABILITY

Contingent coverage for liabilities incurred when an employee is using his/her own personal automobile on the business of the employer. This coverage is supplemental to, not instead of, the employee's own policy; no coverage is provided for the employee. It assures the employer that insurance to his own standard will be available in the event of loss.

AUTOMOBILE UNINSURED MOTORIST

This provides (to the insured or an occupant in his car) automobile bodily injury coverage that would normally be provided by the policy of another person who has caused injury in an accident. This puts your own insurance company into the shoes of the other person who is otherwise uninsured.

BLANKET COVERAGE

"Blanketing" is combining several types of property into a single item. The purposes are to:

• eliminate conflicts in the description of certain items (real property as opposed to "personal" property)
• eliminate the problem of property that is moved between locations
• maximize the usability of available limit
• minimize the effect of coinsurance requirements

BROAD FORM COMMERCIAL GENERAL LIABILITY

This set combines a number of standardized extensions to the policy. They include:

• Contractual Liability Coverage: an extension that adds tort liabilities which the assured has assumed in a contractual agreement as defined.
• Personal Injury and Advertising Injury: causes of loss basically related to false arrest, malicious prosecution, invasion of privacy, libel and slander.
• Host Liquor Law Liability: coverage for allegations that a causal factor is liquor provided by the insured in the capacity of a host. (Not available to alcoholic beverage businesses.)
• Real Property Legal Liability: limited dollar coverage for fire damage to premises leased to the insured.
• Incidental Medical Malpractice Liability: coverage when claims arise from certain medical services (usually a company nurse) when the insured is not in the business of providing those services.
• Non-Owned Watercraft: coverage for use by the insured of watercraft under 26 feet in length, not owned by the insured and not used to carry persons or property for a charge.
• Limited Worldwide Liability: the policy territory is redefined and may include certain events happening outside the United States and Canada, if suit is brought inside those jurisdictions.
• Extended Bodily Injury: extends coverage to include an intentional act if it arises solely from the use of reasonable force to protect persons or property.

BUSINESS INTERRUPTION

This coverage reimburses the insured when a covered loss forces suspension of normal activities. The measure of loss includes continuing expenses and lost profits. Both items are paid while the business is curtailed, but no longer than it would take, with due diligence, to restore usual operations. On request, there is also coverage available for loss due to damage at the premises of suppliers or customers.

BUSINESS PACKAGE POLICY

This general term refers to a policy that combines several types of coverages into an integrated program of insurance to meet the needs of the insured.

CRIME COVERAGE - DEPOSITORS FORGERY

This insurance covers loss through forgery or alteration (other than by an employee) of the assured's own bank accounts. This does not include any coverage for acceptance of forged instruments drawn upon others.

CRIME COVERAGE - FIDELITY

Coverage is provided for loss resulting from an employee's dishonest or fraudulent acts committed with the manifest intent to obtain personal financial benefit and to cause the employer to sustain such loss.

CRIME COVERAGE - MONEY AND SECURITIES

The definition of securities includes any negotiable or non negotiable instruments, including credit card imprints, stamps and tickets, stocks and bonds. Coverage includes loss, damage or theft, other than by an employee. The insurance is usually provided separately for your own premises and for outside loss, such as while on the way to the bank.

CRIME COVERAGE - PREMISES

This insurance covers destruction, disappearance or wrongful abstraction (other than by an employee) of money or securities from within the assured's premises or any banking premises.

CRIME COVERAGE - TRANSIT

This insurance covers destruction, disappearance or wrongful abstraction (other than by an employee) of money or securities while being conveyed by a messenger or while in the home of a messenger.

DIRECTORS AND OFFICERS INSURANCE

During the normal course of business the managers of the company are called upon to make decisions involving a variety of internal, interparty and public matters. In so doing they represent the company and their actions can effect every aspect of the company's health. Should they misstate themselves, make errors in judgement, or fail to take proper action, there can be dire consequences for the company and consequently for themselves as the agent of the action. For this they can be taken to task by shareholders, clients, parties with whom they deal, the public, and governmental bodies.

The laws of the various states allow corporations to indemnify their officers and directors against consequences of acts and omissions which they have taken in good faith on behalf of the corporation. The corporation may itself take insurance on the costs of this indemnificaiton, and for the cost of representing and defending those persons when claim is made.

Coverage is available which insures the corporation for those actions for which the corporation chooses to defend the individual. In the event of a questionable situation the policy may defend the individual directly until it is determined that (s)he has not acted in good faith.

ELECTRONIC DATA PROCESSING COVERAGES

Special coverage is available for electronic equipment with high susceptibility to damage. This can include computers and their media (disks, tapes, etc.), and also such items as phone systems, fax machines, and copiers. They are insured for broader than usual coverage which includes, subject to a higher deductible, mechanical and certain electrical breakdown.

Extra expense coverage pertains to the additional cost of having work done off premises or employing additional people to re-enter the lost records.

EMPLOYEE BENEFITS LIABILITY

In the process of administering your various employee benefit programs, the opportunity is often presented for clerical or administrative error. Examples are failure to provide coverage, and an error in classification as to family status. The liability insurance company makes good the obligation which is unfulfilled by the health insurer as a result of the error. (The coverage does not insure for honesty or prudent investment.)

ERRORS AND OMISSIONS INSURANCE

Financial Advising has at its core the rendering of opinions based on extensive training and experience. This work by its nature requires the presence of the practitioner's individual judgment in every decision and action. In every instance opportunity arises for misunderstanding, misstatement, error or omission.

Errors and Omissions insurance indemnifies the practitioner in the event his action (or lack thereof) causes loss to the client. The coverage often spells out the areas of practice in which coverage applies, and defines circumstances where other coverages would be expected to apply, and situations where the insurer feels it necessary to exclude coverage. There are few standards for this insurance, and each policy must be considered on its own merits, with priority given to the terms of coverage in addition to the usual standards of price, limit and deductible.

EXTRA EXPENSE INSURANCE

In many situations it is preferable to stay in business after a loss rather than to close while repairs are made, with the resultant chance of loss of customers. In this circumstance, it would take extraordinary expenditure in order to keep the business going. These extra expenses might include premium rental at a temporary location, special advertising, rental and installation of temporary equipment, hire of temporary personnel, and the like. The insurance will pay these expenses for a reasonable length of time, commensurate with the time it would take, with due diligence, to restore usual operations.

FIDUCIARY LIABILITY

The policy will defend the insured and pay on its behalf any claims arising from breach of the responsibilities, obligations or duties imposed on fiduciaries of an employee benefit plan. This might arise as a result to the Employee Retirement Security Act of 1974 or from another fiduciary matter. The policy also includes liability arising from a negligent act, error or omission in the administration of a covered plan.

LIABILITY

Liability coverages are often combined into a single limit, but include two main divisions:

• Bodily Injury Liability refers to injury to third parties (those persons with whom the insured has no relationship before the occurrence of the injuring event.)
• Property Damage refers to physical damage to property belonging to third parties.

Both of these liability segments are subject to a number of conditions and exclusions which modify and restrict its terms. Liability may also be broadened in a variety of ways. Actual extent of the coverage is determined only by reviewing the policy itself.

Recent changes in the liability forms require closer attention to policy limits. Aggregate annual limits apply separately to Products and Completed Operations, and to the Premises and General Operations coverages. Several extensions previously optional have been incorporated into the basic forms.

LOSS OF RENT

This coverage is intended to compensate for loss of revenues when a covered loss causes the premises to be partially or totally untenantable. The loss includes all loss of income that might have been realized during the period it would take, with due diligence, to make repairs.

MEDICAL PAYMENTS

Policies may specifically provide for an extension of the policy which will, at the insured's option, pay for a limited amount of medical payment expense if someone is injured while on the assured's premises. The payment is gratis, regardless of cause, and without an admission of responsibility by any party.

REPORTING FORM

On this form, coverage is written subject to a limit which is usually set well in excess of the coming year's expected values. Reports are made of actual values, usually as of the last day of the month. At the end of the policy year the premium is adjusted to reflect the average annual value. Penalties may be assessed as part of a loss adjustment if the reports are not made in a timely manner, usually within 30 days. A reporting form is most commonly available for contents or accounts receivable insurance.

STOP-GAP INSURANCE

In 1981 the Supreme Court of Ohio allowed a recovery in a case where the plaintiff alleged that his employer had intentionally provided an unsafe workplace which caused an injury to take place. The result was a judgment that the Workers Compensation Fund was unwilling to cover because the payment would not have been for a benefit in the compensation scheme. Nor was coverage provided by General Liability because of the usual exclusion of work related accidents.

Stop-Gap insurance has been created by the underwriters to provide a defense for the employer faced with a similar situation. The coverage will apply to defense of the employer who has not been adjudicated of intentionally having an unsafe workplace. Coverage of a claim allowed by the court will depend on the actual circumstances involved.

TRANSPORTATION

Coverage is provided for covered good that are away from your own business premises during transportation. Coverage is usually provided while on your own vehicles, but may cover other modes as well.

UMBRELLA AND EXCESS LIABILITY

These coverages extend the insurance provided by the basic general and automobile liability policies. The limits on the umbrella and excess policies are available in the event the underlying policies become exhausted.

Excess contracts provide additional amounts of insurance and follow the form of coverage in the underlying policies. Umbrella policies include broader language, providing certain coverages that are not included in the underlying policies.

VALUABLE PAPERS

This coverage is for that value of information incorporated into your records as a result of day to day work or special research. The information would have to be capable of being reconstructed after a fire, water damage or other covered event. Examples would be customer lists, drawings and plans, leases, manuscripts, and accounting records (but not records of accounts receivable, which are separately insurable).