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Definitions of Coverages

Liability Coverage - Commercial General Liability - Occurrence Basis

This coverage will pay for damages that the insured becomes legally obligated to pay due to bodily injury, property damage or personal and advertising injury arising from the insured's premises, operations, completed operations and products. The occurrence basis means that only occurrences that happen during the policy period are covered. There is no reference as to when the claim must be presented.
Property Coverage - Building and Personal Property Coverage Form
There are four types of property associated with every structure:
  • The building or structure itself
  • The business personal property inside the building
  • The personal property of others in the building
  • The improvements and betterments that have been made for the benefit of the current occupant
All are covered under the Building and Personal Property Coverage Form. All can be provided with a specific limit or can be combined in various ways as blanket. A separate cause of loss form must be attached.

Time Element Coverage - Business Income with Extra Expense

Business income with extra expense provides coverage for the loss of income a business suffers after direct damage of covered property. In addition, extra expenses that the insured incurs to remain in operation, above and beyond the amount necessary to reduce the business income, are also covered.

Property and  Time Elements Cause Of Loss - Flood

Covers buildings and their contents on either a replacement cost or an actual cash value basis against direct loss by flood. Coverage is available in the standard market through DIC forms or other coverage forms developed by individual carriers in selected areas. In areas declared eligible by federal insurance, federal flood insurance is written with the National Flood Insurance Program.

Inland Marine Coverage- Contractors’ Equipment

This coverage provides physical damage insurance for the mobile or contractors' equipment located at the insured's premises, job site or while it is in transit. Items that can be included range from employees' tools to scaffolding to cranes and more. If it is used by the contractor to do his/her job and is not licensed for road use, there is a good chance that it is contractors' equipment and should be covered. There is no standard form to provide this coverage. Coverage comparisons to consider are: actual cash value or replacement cost; is the coverage all risk or named perils; can the coverage be blanketed; automatic coverage for new or replacement equipment; leased, rented and borrowed items; coinsurance requirement and penalty; 'overcapacity' limitation in the form that will deny coverage if the equipment lifts something beyond its stated capacity.

Commercial Auto Coverage - Personal Injury Protection

Provides coverage necessary to meet the requirements of state -mandated "no-fault" coverages.

Commercial Auto Coverage - Hired Car

Provides coverage for the insured on any vehicle that is hired by the insured. Physical damage coverage mayalso be purchased. A car must be hired for less than six months in order to be considered hired and not leased. This coverage may be purchased with owned auto coverage or as a stand -alone.

Commercial Auto Coverage- Non-Ownership Automobile Liability

Provides coverage for the employer when an employee or a volunteer uses their vehicle on the employer's business and causes damages. Coverage may be extended to the employee, but only through a special endorsement.

Workers Compensation Coverage- Workers Compensation And Employers Liability

Part A covers all injuries and diseases that must be covered according to the individual state workers compensation statutes. All benefits are paid in accordance with the schedule provided by the states. Part B covers the liability that may be imposed beyond the state statutes subject to the exclusions and conditions of the policy. The National Council of Compensation Insurers provides a standard form that is a model for all member companies to use. Certain states have alternatives but all are fairly similar. Part A is mandatory and dictated by the states, however, Part B is more insurer-defined and should be compared by carrier, particularly the exclusions.

Excess Liability Coverage - Umbrella Policy

An umbrella serves two purposes. First, it provides excess liability limit over the scheduled underlying policies. Second, it fills some gaps in the underlying coverage. There is no standard umbrella policy. Therefore, coverage comparison is a must. Key areas of comparison are exclusions, deductible, whether a follow-form is offered over unusual underlying exposures, limits, and defense cost (in or out of the limits).