Tag: "Insureds"

Commercial Auto Insurance

author | December 29, 2010 | Comments (0)

Commercial auto insurance is in principle similar to personal auto insurance. However, there are some distinct considerations to keep in mind when purchasing commercial auto insurance. By understanding these differences it will enable the insured to ask pertinent questions to better protect against their risks.

For many businesses today umbrellas have become a large part of their risk management and risk transfer. What many insureds do not understand is that umbrellas don’t automatically cover over the commercial auto policy. This largely depends on the carrier writing the umbrella. This of course is very important as having an umbrella in place is very advantageous for businesses who have the umbrella over top of their other coverage.

Although the minimum limits may vary state to state for commercial auto or personal auto it is essential to have an adequate minimum limit in regards to protecting the commercial business from potential risks. In many states nothing less than one million Combined Single Limit should be purchased. This however is best discussed with an insurance agent to find out what other similar businesses are insuring for.

One typical coverage often seen on personal auto insurance policies is “rental and towing” coverage. This however is not the case when it comes to commercial auto insurance. Although in some instances this can be bought for a commercial auto policy it is certainly by no means typical or standard. This is best discussed with the agent or insurance carrier who is writing the policy.

The above mentioned points are in no ways comprehensive but a good starting point when shopping for commercial auto insurance and discussing with an insurance agent or carrier. Of course it is always very important to read the insuring agreement or policy to clarify and understand the specifics.

What is Directors and Officers coverage?

author | November 10, 2010

This is a question often asked by insureds when their insurance agent suggest getting a quote for this coverage. Usually insureds think that their General Liability will cover this risk, however, this is truly not the case. As a matter of fact without this coverage Directors and/or Officers of a corporation can be completely exposed personally for their actions should a suit arise.

From large corporations to small businesses to non-profits all can have some degree of exposure and therefore should have Directors and Officers coverage, otherwise known as DNO coverage. For the people on these boards Directors and Officers (DNO) coverage is essential should they be brought into a law suit for their actions and/or decisions which a third party is suing over.

Although many boards do not understand the importance of this coverage for their personal exposures it is vital that corporations have this in place. Unfortunately many board members do not request to see the policy prior to their service to their potential detriment.

There are a number of carriers that offer Directors and Officers coverage however it is limited in comparison to the carriers that write General Liability. There are a few companies that specialize in this coverage one of which is “Monitor”. This carrier for example has broad coverage when compared to other General Liability policies with Directors and Officers included. For this reason it is essential to read and fully understand the coverage afforded in these policies as with any insurance.

As always different carriers may rate differently thus charging different premiums. For this reason obtaining mulitple quotes is important once the coverage is determined to be adequate for the exposures. By requesting different quotes insureds will glean a broader understanding of the carrier’s policy and pricing and will be better informed even if using an insurance agent.

With the internet many companies are available to quote online or over the phone at no cost to the insured or the one seeking this coverage. Usually an application is required along with a Loss Runs report if there was prior coverage. Of course Loss Runs would not be necessary if Directors and Officers coverage was not prior. If this is the case the carrier may request a “no loss” letter stating there have been no knowledge or action against the corporation.

Once a carrier has offered a quote and the insured accepts, the insured can bind coverage with the payment and the board can rest easy knowing that they are personally covered for their actions as a Director or Officer on the board.

What are “Loss Runs”?

admin | December 4, 2009

Every insurance carrier guards their bottom line by attempting to insure only the best risks by understanding the exposure in detail. When a prospect applies for insurance the obvious reasoning is that there is some sort of risk of loss that the prospect doesn’t want to be on the hook for. Therefore, the insurance carrier assumes risk for their insureds in turn for premium. By doing this they share the cost of risk over many.

This sharing of risk among many is usually not a problem as this is the essence of insurance. However, the problems arise when too many of the carrier’s insureds have losses within a similar frame of time. The carrier then ends up having a substantial loss that directly impacts the viability of the company.

For this reason “Loss Runs” are tracked. In essence “Loss Runs” is an insured’s insurance history at a glance. This report talks about past losses as well as open case losses. This report will state the time and the carrier along with other pertinent information. By having loss runs available an insurance company can then analyze the chance of risk with the prospective client.

Typically prospective insurance carriers will require anywhere from three to five years of Loss Runs before deciding to issue a proposal for business. Because all insurance carriers require loss runs all insurance carriers will provide loss runs as an industry standard of practice. Obviously the least amount of losses the better the insurance rates and the greater the amount of losses the higher the rates.

What this means for individuals and/or businesses alike is that it is always best to avoid or reduce risk as much as possible as a means of keeping insurance costs down. This is a direct strategy that has a direct impact on your bottom line.