Chapter 9 - Declarations Page; Miscellaneous Liability Coverages Flashcards
What are the specific items on the declarations page?
- Insurer and broker
- Named insured
- Policy period
- Time of policy (mailing address time zone)
- Limits of insurance declared
- Form of business
- Description of business
- All premises owned, rented or occupied
- Premium base and rate
- Advance premium
- Total premium
- Minimum retained premium
- Endorsements
- Countersignature
What are the obligations of the first named insured?
- Paying the premium
- Recording information for premium computation
- Sole authority to request policy changes
What is the standard expiration time of a policy?
12:01am in the time zone of the mailing address
What are the limit categories listed?
- Each occurrence limit
- Personal and advertising injury limit per person/organization
- Medical expense limit per person
- General aggregate limit
- Tenants legal liability per premises
- Products/completed operations aggregate limit
What are the six choices available under form of business?
- Individual
- Joint ventures
- Partnership or limited liability partnership
- Trust
- Limited liability company
- Any other organization
How is premium calculated?
Revenue is used as a base.
Rates are expressed per mille (thousand).
ie. Revenue is $1m, prescribe rate is $2 per mille, premium would be $2,000.
What is advance premium?
An amount payable in advance to the policy term, a deposit premium.
What is total premium?
Includes any applicable taxes.
When substantial, may pay in installments.
What is a countersignature?
A secondary confirmation that the document is authentic. Typically signed by a broker or representative of the insurer.
Who usually provides the primary signature?
The insurer’s CEO.
What two types of insurance do garage policies usually need?
- Automobile insurance
- General liability insurance
What is the name of the garage automobile policy?
SPF 4
Why would they need automobile insurance if they have a CGL?
Automobiles are an exclusion under a CGL
What are two of the common ways that premium for garage liability is established?
Estimated payroll or revenue
What are three other common exposures for garage liability?
- Elevators
- Contractual liability
- Any other business or occupational pursuits
Explain employers liability
Employers are liable for torts committed by employees while they are acting in the course of their employment.
Employers negligently causing injury to their employees are liable for damage
What are the two principal methods to protect employers against costs out of injury?
- Workers compensation statutes
- Employers liability coverage
What is the workers compensation legislation in Ontario?
Workplace Safety and Insurance Act
What are some types of employees excluded from workers compensation?
- Farm employees (some jurisdictions)
- Domestic servants
- Casual employees of certain types
- Certain clerical employees
Are employees able to sue employers under common law?
No, they receive payment through workers compensation
What was the relevance of Piercey et al v. General Bakeries?
Workers compensation act of Newfoundland did not offend the equality provision of the Charter of Rights and Freedoms.
The plaintiff attempted to state that the act taking away her right to sue contravened the charter.
How is an employers liability usually covered?
By endorsement; it deletes BIPD exclusions D, E & F
How does employers liability differ from how workers compensation is paid?
It is not a no-fault coverage.
The claimant must prove the employer was both responsible and negligent.
How are limits laid out in an employers liability policy?
Per employee and per accident
Explain voluntary compensation for employees
Compensation is paid for weekly indemnity for total or partial disability regardless of legal liability.
Can voluntary compensation for employees coverage be purchased individually?
No. It is always written with employers liability.
What are the three situations in which you may require contingent employers liability coverage?
- A worker that is working outside their home jurisdiction
- Employers may have to pay workers compensation as they have assumed liabilities under contract
- If the board denies benefits under workers compensation
Explain bailees’ coverage
Bailees take goods of others (ie. dry cleaners, laundries, etc) and perform acts. They may purchase this coverage in the event they are liable for damage to property of others.
Why might an employer purchase a non-owned automobile liability policy?
To protect them from liability suits when employees operate vehicles for use of their business.
What are the four categories that represent non-owned exposures to employers?
- Hired or rented automobiles
- Employees’ automobiles
- Independent contractors’ automobiles
- Other automobiles
What conditions are non-owned automobile policies subject to?
The standard automobile statutory conditions
What would personal liability insurance be?
The policy covering non-business activities or as generally known, social, domestic, and pleasure pursuits.
What three policies are personal liability policies frequently sold with?
- Homeowners
- Condominium
- Tenants
What are the three main areas you may be found personally liable for negligence?
- Ownership or occupancy of a dwelling
- Actions of the insured and members of the family or household
- Activities of pets
What are the four sections of a personal liability policy?
- Personal liability
- Premises liability
- Tenants legal liability
- Employers liability
Explain personal liability
Personal actions anywhere in the world
Designed to compensate a third party and excludes coverage to your own items
Explain premises liability
Liability from ownership, use or occupancy of premises
Self propelled lawn mowers, snow blowers and certain tractors are not covered
Explain tenants’ legal liability
Liability for property damage to premises or their contents which insured are using, renting or have in their custody or control when caused by fire, explosion or smoke
Explain employers’ liability
Liability for BI to residence employees arising from their employment by the insured
What are the two main extensions under a personal liability policy?
Voluntary medical payments
Voluntary payment for damage to property
What do voluntary medical payments cover?
Reasonable medical expenses if the insured unintentionally injures another person
What is covered under voluntary payment for damage to property?
Unintentional damaged caused by the insured even when not liable
OR
Intentional damage by anyone on the policy aged 12 or younger
Personal liability policies will cover watercrafts in which situations?
- Certain types of owned watercraft provided they come within the power and length limitations specified in the policy
- Watercraft larger than those included above if they are specifically shown on the policy
What other motor vehicles would you be covered for under personal liability?
- Self propelled lawn mowers, snow blowers, garden tractors not more than 25HP used mainly on your property and not for hire
- Motorized golf carts while used on a golf course and motorized wheelchairs
What is voluntary compensation for residence employees?
Certain benefits are extended if the employee suffers bodily injury or death
What is excluded under a farmers personal liability policy?
Malpractice and any business pursuits other than farming
What three sections are included under a farmers personal liability policy?
1) Legal liability
2) Voluntary medical payments
3) Voluntary payment for damage to property
What are the three types of legal liability under a farmers policy?
a) Personal liability
b) Premises liability
c) Tenants’ legal liability
Define business
Any continuous or regular pursuit undertaken for financial gain including a trade, profession or occupation other than farming
Define business property
Property on which a business is conducted, property rented in whole or in part to others or held for rental, other than a farm
Define farming
Includes operation of roadside stands maintained solely for the sale of farm products principally produced by the insured
What is the purpose of an excess liability coverage?
To supplement limits of liability that are available at the primary level of a particular underlying policy
What is a follow form policy?
Relies on same wording as exists on a primary level
Adds an additional layer of insurance once the primary level is exhausted
What is a stand alone policy?
May be identical to primary or may be more restrictive, will have their own set of wordings
Not broad, specific
Who originally created the umbrella policy?
Lloyds of London
What is an umbrella policy?
A broad blanket insurance providing extra liability protection
Operates in excess of liability policies
What is SIR?
Self insured retention
Amount payable by insured where the drop down feature has been activated.
Essentially the umbrella policy deductible.
What are drop-down provisions?
It outlines when the policy becomes primary for defence costs and settlement awards
When is the most common scenario the drop-down feature would be used?
When a loss is excluded by the primary policy but covered under the umbrella policy. It will then become primary.
What might an insured do instead of increasing the liability amounts on all of their policies?
Purchase an umbrella liability policy
How do excess liability and umbrella liability differ?
Umbrella is typically more broad, where excess is more defined
What activities are carried out by workers compensation boards?
- Inspections
- Recommendations for safety improvements
- Authority to close place of employment
What benefits do workers compensation boards make available to injured employees?
- In general, medical expenses without limit unless covered by health plans
- For total disability, compensation is a percentage of earnings
- If death occurs, funeral expenses, widow gets lump sum and monthly payments; usually until lifetime or remarried
- If there are dependent children, additional payments
What must an employee do to collect under the voluntary compensation for employees?
Must sign a release from any legal liability claims under common law
A choice: accept voluntary payment or sue employer for negligence
What two main questions are asked when an employee is involved in an auto accident?
1) Was the employee driver on company business at the time of the accident?
2) Was the employee driver acting as an “employee” rather than as an “independent contractor”?
What are the three main functions of an umbrella policy?
- Provides excess limits of insurance over underlying policies
- Provides additional coverage beyond underlying policies which is subject to SIR
- Provides an aggregate drop down feature
Who is a non-owned automobile liability coverage for?
Employers
