The Business Owner Policy

Here is a VERY educational article to read about Business Owner policies. Commercial accounts are a great way to build your book of business and are an even better way to increase your cross sales. Check out the article below to educate yourself on the basic idea of a BOP!

If you own and/or run a smaller business, your insurance needs may be properly handled by a businessowner policy (BOP). BOPs are similar to a homeowners policy, offering both property and liability protection. Businesses such as retailers, wholesalers, small contractors, artisan contractors, dry cleaners, restaurants, offices and convenience stores (including those with gas pumps) are eligible for BOP coverage. All such operations may be insured by a BOP as long as they are not larger than 25,000 square feet in total floor area or have gross annual sales greater than $3,000,000 (per location). Cooking operations, due to the higher fire and other accident exposures, have significantly more restrictive guidelines, such as being disqualified for a BOP when it square footage exceeds, typically, 7,500 s.f.

PROPERTY COVERAGE
BOPs protect buildings as well as the following:

* building additions (completed or being built)
* indoor and outdoor fixtures
* machinery and equipment
* landlord furnishings,
* mowers, ladder, snowblowers, and similar maintenance property
* outdoor furniture
* floor coverings
* refrigerating appliances
* ventilating appliances
* cooking appliances
* dishwashing/Drying appliances
* clothes washing/drying appliances
* materials, equipment, and supplies
* temporary structures
* located near the insured premises

LIABILITY COVERAGE
The policy's protection for business personal property (such as office equipment, copiers, desks, etc.) applies whether the property is located inside or immediately outside the covered buildings. The category also includes property you own, lease or control (i.e., borrow or control) as long as the property is used by the business.

Businessowners liability coverage provides comprehensive protection for claims or suits made by other parties. Its liability section covers losses involving injury to other persons or damage to property that belongs to others. It also provides limited protection against personal injury (slander or libel), advertising injury and losses involving an operation's products or services.
Naturally, there are certain situations that are not covered by a BOP. For instance, there is no coverage for losses involving most vehicles, money and securities; illegal property (contraband), land, water, growing crops or lawns; or watercraft.

A BOP may be supplemented to provide additional protection. Property coverage options include adding insurance for accounts receivable, valuable papers and records, earthquake, spoilage, etc. Liability coverage can be expanded to handle additional business interests, limited vehicle liability, losses related to personnel situations, liquor liability and injuries to leased employees.
A BOP may be the answer to your company's coverage needs and it may be worthwhile to get more information on the BOP from the nearest insurance professional.

Questions about BOPs? Contact Tague Alliance for additional information or check out our website!

COPYRIGHT: Insurance Publishing Plus, Inc. 2004, 2008

The Scoop on Umbrella Insurance (Part 1)

Tague Alliance would like to provide the article below to help you provide detailed information about umbrella policies to your clients. If you have any questions about the items discussed in this article, please call Tague Alliance at (760) 729-1143!

Let’s say you have a policy for your home and the cars driven by your family. You have just the right policy for the apartment you rent out to others as well as special coverage for your boating excursions. Your homeowner's policy even has a special, added coverage to handle the business that your spouse runs out of your home. Yes, it looks like you can be confident that you have all the coverage you need. But let’s take another look. Maybe you need an umbrella. An umbrella is the term for a liability policy that fits over your primary policies. Besides providing an additional (excess) level of coverage, it sometimes provides protection that is not available under your primary coverage.

Umbrellas are designed to be carried over a person's primary (also known as underlying) liability coverage. Primary refers to the fact that in the event of a loss, the liability portion of your auto or homeowner coverage is the first to respond. Umbrellas or excess liability policies respond to an eligible loss only after the primary insurance has paid its limit.

It's quite possible that your primary insurance limits provide more coverage than you'll ever need. However, circumstances could involve a type of loss that is not completely covered by a primary policy. For instance, your newly licensed child is driving the family car and slides on an icy highway. He ends up causing a chain collision damaging several cars and injuring a dozen drivers and their passengers. Or maybe you often volunteer to help transport members of your son's first grade class on field trips and you have an accident because you tried to beat a yellow light. If you don't have enough primary coverage, any shortage may have to come out of your personal assets.

Umbrellas generally provide additional liability coverage for the following underlying policies:

• Personal Automobile
• Homeowners / Farmowners
• Recreational Vehicles
• Watercraft
• Personal Liability

The additional coverage may often extend to providing for related expenses, also on an excess basis, such as the cost of providing a court defense. Part 2 for Umbrella Insurance will be posted in the next week or so!

COPYRIGHT: Insurance Publishing Plus, Inc. 1998, 2002, 2008

Reviewing Homeowners Policies With your Clients

Hi Everyone!

It's that time of year again! A great time to review your homeowners policies with your clients. Below is an article that we are posting for our clients. You may find it helpful as well:


Be Sure to Review Your Homeowners Insurance Policy Annually

Most Homeowners insurance companies will simply send out a reminder for a renewal of your home insurance policy when the end of the year is up for your insurance coverage. Many will also automatically renew your policy unless you call and let them know that you want to change or cancel that policy. This makes it easy for many homeowners to simply begin sending in the next set of payments for another year without reviewing the policy to make sure it adequately reflects their needs for the year.

Whether you have upgraded or remodeled the home, added a deck onto the back, turned the home into a rental property or realized that you may have problems with flooding in your area, there are several reasons to review your home insurance policy every year to assess whether the coverage still meets your needs.

Even if you have just begun a new home insurance coverage policy, it is important to review the policy as soon as you receive it to make sure the policy has the correct coverage amounts and coverage needs you have asked for. Remember that this policy will be in place for an entire year and will most likely cost between $300-$2000 so be sure that you are getting what you want.
If you asked for personal liability of others in the amount of $100,000 and the policy only shows $50,000 don’t be afraid to call the insurance agent back to have this problem corrected. The problem can simply be solved by issuing a new policy or a policy change.

Once the year time period has expired on your current policy and you are getting ready to renew again, it is always a safe bet to call the insurance agent and ask if the replacement cost value has gone up on your home or on anything in your home.

Remember that the financial market continues to increase and with this rates of building and replacement tools will go up, so there is no shame in calling to ask if the figures on your policy need to be changed.

If you have done any renovation of the home in the last year, such as replacing countertops or flooring, or even adding on a deck, it is important to inform the insurance company of these changes. This protects you from being underinsured in case of damage or loss.
If you have acquired any major purchases of personal property, it is also important to contact the insurance company about changing the coverage amount on your interior belongings. This could include major electronics equipment like an LCD television, a personal computer or laptop, an expensive piece of jewelry or fur coat, or even new furniture or a new piece of artwork.

It is also important to review your insurance coverage policy every year to determine if you have adequate peril coverage and liability insurance. Although some basic plans cover certain types of natural disaster and others cover personal liability, you may want to consider adding on specific insurance clauses for flooding, hurricanes, or tornados if you live in a high risk area.

If you started a plan out with little or no hurricane insurance but realized that the previous year brought major hurricanes to your area, then you may want to reconsider the amount of coverage. As well, some policies do not require homeowners to have personal liability insurance but this is a good idea if you are planning on having others in your home quite often.

This could include construction workers who are remodeling a kitchen or bathroom or even a babysitter or housekeeper. You will also want to change your policy if your children are starting to get older and invite over friends to play in the yard or to spend the night. Personal liability insurance will cover any accidents that happen while others are in your home.

One final reason to review your insurance policy each year is to assess discounts or possible price quote deductions that you may be able to receive. When you purchased the home it may not have had a security system installed, fire sprinklers or been equipped with up to date smoke and carbon monoxide detectors.

But if you have installed this equipment over the past year, it is a good idea to call and inform the insurance company to see if you this makes you eligible for a discount. You may also be able to receive a discount if you started receiving car insurance from the same company, turned a certain age, or began a membership to a certain club or organization that the insurance company recognizes and gives discounts to on a regular basis. - http://wagnerstott.com/be-sure-to-review-your-homeowners-insurance-policy-annually/ (Posted by Wagner Stott)

Tague Alliance - Carlsbad Condo Court Case Overview

The court case review below provided by Rough Notes is an interesting case where some more complex coverage triggers are discussed.


270_C276
EFFICIENT PROXIMATE CAUSE DOCTRINE DID NOT APPLY TO THIRD PARTY CASE

Insurance Company of the State of Pennsylvania (ISOP) insured the City of Carlsbad (City) under a general liability policy that covered bodily injury and property damage losses to third parties resulting from City's negligence. It defined property damage as "physical injury to or destruction of tangible property, including all resulting loss of use of that property." However, an exclusion provided that ISOP would not defend or pay for claims or suits brought against City for property damage arising out of land subsidence for any reason whatsoever. The definition of land subsidence included landslide.

As a result of City's negligent maintenance and repair of a fire hydrant and water line located within the La Costa de Marbella Condominium Complex (Marbella), an earthen slope above it became saturated with water and failed. The resulting landslide damaged or destroyed 15 units and part of the common area. The Marbella Homeowners Association sued City, seeking damages for property damage and emotional distress. ISOP defended under a reservation of rights. City settled the lawsuits for $12,670,000. ISOP indemnified City for the bodily injury claims but denied coverage for the property damage claims. City sued ISOP, alleging breach of contract and breach of the implied covenant of good faith and fair dealing.

Both parties filed motions for summary judgment. City asserted that it was entitled to indemnification under the "concurrent causation doctrine" because the exclusion did not explicitly negate coverage that resulted from more than one cause, that the exclusion was illegal, and that it did not apply to landslides caused by man-made forces. ISOP argued that the exclusion unambiguously applied to all property damage arising out of landslide, that the concurrent proximate cause doctrine did not apply because there were not two separate and independent acts of negligence to cause the damage, and that the exclusion applied even if the concurrent proximate cause doctrine applied.

The trial court heard the motions together, denied City's in its entirety, and granted ISOP's in its entirety. City appealed on essentially the same basis as its initial motion. It asserted that the trial court erred because the exclusion was ambiguous as to whether it covered landslides regardless of cause, that it did not apply to landslides caused by man-made forces, and that it was entitled to indemnification under the "efficient proximate cause" doctrine and related Insurance Code. The Court of Appeal determined that, based on the evidence, there was no need to interpret policy language and that the issue was a pure question of law.

Under the "efficient proximate cause doctrine," when a loss is caused by a combination of covered and specifically excluded perils, it is covered if the covered peril was the efficient proximate cause of the loss. On the other hand, the loss is not covered if the covered peril was only a remote cause of the loss, or the excluded peril was the efficient proximate, or predominant, cause. An insurance company is liable for a loss where a peril insured against was the proximate cause, although a peril not contemplated by the policy may have been the remote cause of the loss; but is not liable for a loss where the peril insured against was only a remote cause. However, this doctrine is limited to first party cases, where an insured seeks coverage for its own property interests. In third party cases like this one, where coverage is sought for liability to third parties, the concurrent proximate cause doctrine applies. As a result, the first party cases that applied the "efficient proximate cause doctrine" that City relied on were irrelevant to the appellate court's analysis. City did not assert coverage under the concurrent proximate cause doctrine that applies to third party cases. Even if it had, it would not have applied because it applied only where there were two negligent acts or omissions, one of which independent of the excluded cause rendered the insured liable for the resulting injuries. The Court of Appeal affirmed the trial court's judgment in all respects.

Court of Appeal, Fourth District, Division 1, California. City of Carlsbad, et al., Plaintiffs and Appellants, v. Insurance Company of the State of Pennsylvania, Defendant and Respondent. No. D053843. Nov 20, 2009. 180 Cal.App.4th 176. 102 Cal.Rptr.3d 535

Tague Alliance - Home Insurance and Auto Insurance Questions

The questions below will prove helpful in determining a client's needs regarding their auto insurance and home insurance.

AUTOMOBILE INSURANCE

1. Have you considered increasing your deductible to lower your premiums?

2. Are your liability limits adequate to protect your income and assets from a negligent lawsuit?

3. Do you presently insure all of the vehicles in your household?

4. Are all the licensed drivers in your household listed on your automobile policy?

5. If you own a pickup or a van, does it contain any customized equipment?

6. Do you own any camping or recreational vehicles (including electric or gasoline driven golf cart)?

7. Do you have a non-factory installed stereo system?

8. Do you have a vehicle, not your own, furnished for your use?

9. Do you have rental car coverage in the event your car is damaged in an accident?

10. Have you reviewed your auto insurance in the last two years?

11. Would you like to review the current limits and other coverage's on your vehicles to see if they are still suited to your needs?

HOMEOWNERS INSURANCE / RENTERS INSURANCE1

1. Do you own any antiques, fine art, or paintings?

2. Do you own any jewelry, furs, or silverware valued over $500?

3. Do you own any guns?

4. Do you have replacement cost contents coverage added to your policy?

5. Do you presently have either a burglar, fire or smoke alarm in your home?

6. Have you remodeled your home recently? Do you plan to in the near future?

7. Would you like an estimate of your home's replacement cost at today's prices?

8. Do you own a second home or any other real property such as a mountain cabin or farm property?

9. Do you conduct any business or give private lessons in your home?

10. Do you own any rental or investment property?

11. Do you have an Excess Liability (umbrella) policy which extends your automobile and homeowners liability coverage to $1,000,000 or more?

12. Would you like us to send a form to assist you in making an inventory of your personal property?

13. Have you reviewed your homeowners coverage in the last 2 years?

14. Do you currently have a photo inventory of your personal property?

15. Would you like a review of your current homeowners coverage?

Tague Alliance - Hired & Non-Owned Auto Claims

The info presented below was provided by Philadelphia Insurance and is a great case study of the loss exposure that companies create when allowing employees to use personal vehicles or hired vehicles during the course of their employment. Tague Alliance encourages our independent insurance agent members to research their client's needs to help uncover loss exposure that may exist for a client. Read the case study below:

Source Philadelphia Insurance Company

HIRED AND NON-OWNED AUTOMOBILES

Type of loss:

Bodily injury cases in excess of $1,000,000

Line of Coverage(s) involved in loss:

Hired and Non-Owned Automobile Liability (HNO) coverage

Description and narrative of the loss:

Four losses involving personal vehicles operated on company business:

• Organization incurred a $1.3M auto liability loss resulting from over-loading a 15-passenger van with luggage. An employee of the organization was driving the top-heavy van when it rolled, fatally injuring one passenger and severely injuring the other twelve.

• An employee of a social service agency was operating his personal vehicle, struck a middle-aged pedestrian moving in a crosswalk. Liability loss exposed the organization to a lawsuit and damages of $1.1M.

• Rental vehicle, operated by a policyholder employee, struck a motorcyclist while attempting to execute a left-hand turn. Motorcyclist died and the organization was sued; damages were in excess of $1M.

• Another motorcyclist was struck by an employee driving to a non-profit business meeting. The driver executed an improper U-turn killing the cyclist. Lawsuit resulted in a loss excess of $1M.

What controls were missing that would have prevented or lessened the loss?

Organizations often miss or under risk manage exposures related to the use of personal or “non-owned” vehicles for organization or company business. Whether you have an associate or volunteer “running an errand” to pick up office supplies or staffer transporting a consumer or others in their personal vehicle, the organization is ultimately responsible for the consequences of their driving. Be certain that individuals assigned to the task are screened, trained and have adequate insurance coverage. Errands and rental situations are a part of today’s business world. Let’s look at some of the basic elements of sound loss control aimed at mitigating non-owned auto loss.

Written Procedures

• Screening procedures were limited during new hire and subsequent to; motor vehicle records (MVR) checks were not conducted annually; MVR indications revealed driving infractions on one driver.

• Company Policy was missing in all of the above cases by not outlining the use of personal vehicles and what was expected of the employee regarding personal car insurance “liability limits”. This lack of planning resulted in the organization’s coverage to pick up “as excess” where personal auto policy limits were exhausted.

• There was more than one instance where personal vehicle coverage’s were basic having well less than the desired limits but while still meeting minimum statutory requirements.

• Pre-trip inspections were not completed in one case. Tires on the van that rolled over were under-inflated. There was no pre-trip vehicle inspection that day. A homemade roof rack loaded down with 1,800 pounds of luggage and gear quite possibly lead to greater instability due to the much higher center of gravity of the van and the roof mounted load.

Training

• There was some instruction but mostly geared towards on the road procedures, what to do in case of an accident, distraction policies, etc. Training typically was geared towards drivers of company vehicles.

• Weak documented efforts in defensive driver training or demonstration of such trained techniques during a road evaluation.

What recommendations apply?

DRIVER SCREENING & QUALIFICATION - Screen all drivers. Screen those that drive organization vehicles as well as those employees who may on occasion or regularly operate personally owned vehicles. Obtain (MVR) data at least annually and compare to best practice guidelines per the criteria in the Technical Bulletin provided on the main page.

PERSONAL INSURANCE - Develop and establish a policy requiring employees and volunteers to maintain adequateliability limits on their personal auto policies. The preferred limits should be at least $300,000 unless the person is transporting clients, in which case the limit should be $1,000,000.

DRIVER TRAINING - Provide all drivers with a course in defensive driver training to review fundamental techniques of collision avoidance by recognizing road hazards, understanding defensive measures and having the skill and time to act. Philadelphia Insurance Companies has a FREE web-based interactive Defensive Driver Training Course available through www.losscontrol.com.

ROAD EVALUATION - Develop and maintain a road evaluation process. This process involves drivers taking the defensive driver course and demonstration of those learned skills in an “on the road environment”.

VEHICLE INSPECTION - Develop policies of regular and documented vehicle inspection. Inspect vehicles before and after every trip. Follow through on vehicle condition reports and repair or replace defects as needed.

Other tips:

• Restrict and limit personal auto use where possible! Strive to provide and make use of agency vehicles for medical appointments, deliveries or pickups or anytime consumer transport is required.

• Review all employees and volunteers using their personal vehicles for agency business. Treat them just like any staff member using an agency vehicle would be screened. Verify backgrounds, including driving records for the past five years, even if the worker lived in a state different from where employed.

• Develop policies where all drivers follow agency’s standard policies and procedures when using personal vehicles; (i.e., driver eligibility, use of seatbelts, etc).

• Employees and volunteers using a personal vehicle should provide proof of insurance, confirmation that there are no exclusion regarding vehicle use, proof of inspection and the agency should determine appropriateness of personal vehicle (i.e.,condition, type, etc).

• Implement periodic checks on employees’ and volunteers’ personal insurance and require copies of their declaration showing limit of liability carried.