Insurance

Who Needs an Umbrella policy?

The purpose of an Umbrella policy has nothing to do with rain, but with giving you more insurance protection. This is true for commercial lines insurance as well as personal lines insurance. Most importantly it increases your limits of coverage by defending and indemnifying you once the primary policy has been exhausted. The other aspect of Umbrella coverage, and why it is called ‘Umbrella’ is that it provides coverage in instances that the primary policy does not cover.

A Commercial General Liability (CGL) policy provides insurance for bodily injury and property damage caused by an occurrence. The CGL also has separate coverage for Personal Injury that specifies certain offenses such as Libel, Slander, Wrongful Eviction and other acts. A Homeowner’s policy provides liability coverage for bodily injury and property damage caused by an occurrence just like the CGL. Unlike the CGL, the Homeowners policy does not provide coverage for Personal Injury.

If you post on social media such as Facebook, Twitter, LinkedIn, Snapchat, Yelp, Trip Advisor, or numerous other sites, someone may take offense at what was said or posted. A negative review of a business on Yelp, Trip Advisor, or a similar site may be cause for the business owner to sue for Libel or Slander. A seemingly innocent, or not so innocent picture posted online may be considered by someone to be an invasion of privacy.

If you rent your home on a temporary basis throught Airbnb, Vacation Rental By Owner, or similar sites, you may unknowingly wrongly evict or enter into a room or dwelling. Or otherwise invade the right of private occupancy and give rise to a potential law suit.

The above instances of libel, slander, wrongful eviction, invasion of privacy are all offenses that are considered Personal Injury under an Umbrella policy. These are also intentional and would not meet the definition of occurrence under a Homeowners policy. For those with a Homeowners or Renters policy, I strongly urge you to look into getting an Umbrella policy, if you don’t have one. The premium is usually small in comparison to the primary coverage and is often available from the same insurance company that has your Homeowners or Renters policy.

Tommy R. Michaels, CPCU, ARM, ARe, AIC

T. R. Michaels Claim Consulting, LLC

Targeted Tender – again

An Illinois Appellate court, in Illinois School District Agency v The St. Charles Community Unit School District 203, distinguishes between chronologically concurrent policies and consecutive policies.  The Appellate court recognizes that there is no Illinois Supreme Court precedent for applying the targeted tender to consecutive policies, that are typical of Asbestos and Environmental claims.  This has no effect on cases where two or more policies apply concurrently such as in construction cases.

 

Targeted Tender

Targeted Tender is not a common term for Claims professionals.  This concept, which started with the Illinois Supreme Court, allows  the insured to choose between two or more policies when a claim is tendered.  The situation allowing two or more policies to apply is not uncommon.  This may arise when a contractor has his own coverage and is named as an additional insured on a sub-contractor’s policy.  This may also arise in claims with an exposure over more than one year.  Construction Defect claims, Toxic Tort claims, Asbestos and Environmental claims may all affect more than one policy.

A policyholder’s reason for choosing one policy over another are varied.  The contractor named as an additional insured may want to go under that policy to avoid the loss experience on his own policy.  If there is a choice among policies over several years, one of them may not be subject to a deductible or may not be retrospectively rated.  When the policyholder chooses one of several policies, there is the risk that he/she may need to involve other policies and there may be a late notice problem.

Another problem arises with horizontal exhaustion.   This doctrine, adopted by some states, requires that all primary policies be exhausted before going to any policy at the next level.  To understand the history of targeted tender and why the Illinois Supreme Court made it possible read the articles by Terrence Madden, A Clash of Coverage Doctrines.

Professional Liability Insurance overview

Professional liability coverage is a more specialized coverage than Commercial General Liability (CGL) and not understood by many claim handlers and attorneys.  It is a coverage meant to complement CGL coverage and not replace it.  Christopher Ferragamo, a Director at Jackson & Campbell in the Insurance Coverage Practice Group, has published a 50 state Professional Liability Insurance Coverage Review that is helpful in determining whether there may be coverage under CGL or Professional Liability.

New Claims and Coverage blog

This blog is intended to provide comment, insight, and advice on Property and Casualty Insurance coverage and claims practices.  Courts throughout the country continually interpret insurance coverage when policyholders and insurers can not agree.  Insurers continually change the wording in their policies, add new forms, or discontinue writing some.  Policyholders continually buy insurance policies for protection, peace of mind, to comply with a contract, or because it is required by law.

Whether you are a policyholder, insurance agent, insurance company employee, attorney, insurance regulator, public adjuster, independent adjuster, insurance is important in your life.  I hope this blog will give you some insight and understanding into the insurance coverage and claims process.