Study 9: Declarations Page; Other Employers Liability Coverages - Summary

Question 1

CGL Policy Declarations

Answer 1

Typically, the declarations form is attached to the policy and contains the following items:

• The name of the insuring company and name of agent or broker
• Named insured
• Policy period
• Limits of insurance
• Form of business
• Type of business
• Premises owned, rented, or occupied by the insured
• Premium
• Endorsements
• Countersignature

Question 2

Named Insured

Answer 2

The party contracting with the insurer. The first named insured enjoys the benefits of the policy and has the duties and obligations set forth in the contract.

Question 3

Policy Period

Answer 3

Usually written for an annual (12-month) period. The standard expiration time is 12:01 a.m., standard time, at the mailing address of the named insured.

Question 4

Limits of insurance

Answer 4

Inserted for each applicable item and a deductible is shown if applicable. The limits categories are:

• Each occurrence limit
• Personal and advertising injury limit for any one person or organization
• Medical expense limit for any one person
• General aggregate limit
• Tenants legal liability for any one premises
• Products or completed operations aggregate limit

Question 5

Form of business

Answer 5

Categorizes legal nature of the named insured and helps to analyze who qualifies as an insured under the policy. There are six options:

1. Individual
2. Joint venture
3. Partnership or limited liability partnership
4. Trust
5. Limited liability company
6. Any other organization

Question 6

Type of business

Answer 6

This is the actual description of the business that the insured is engaged in—for example, garage, restaurant, body shop, or hotel.

Question 7

Premises owned, rented, or occupied

Answer 7

Listed to allow the underwriter to evaluate and rate the risk. Note that the medical payments insuring agreement in the CGL policy wording mentions premises the insured owns or rents as a criterion for coverage.

Question 8

Premium

Answer 8

• Base and rate are identified according to the IBC or insurer’s statistical plan
• The advance premium is a deposit premium, payable in advance of the policy term. The total premium includes any applicable taxes.
• A minimum retained premium is stated because once a policy is issued the insurer must cover the initial costs associated with processing the policy. This amount will not be refunded even if the policy is cancelled by the insured soon after inception.

Question 9

Endorsements

Answer 9

Any endorsements that apply to the policy are shown on the declarations

Question 10

Countersignature

Answer 10

• Declarations page is countersigned by the broker or other authorized representative of the insurer
• Confirms that the document is authentic

Question 11

Workers’ Compensation

Answer 11

• Workers’ compensation legislation is in force in all provinces and territories, but differs in detail among the various jurisdictions.
• Legislation was passed to provide benefits to employees who are injured in the course of their employment.
• Legislation applies to most types of employment and where it does, it is compulsory for employers to pay assessments to the respective boards that pay compensation to injured employees from the fund.
• Assessments are based on a rate against payroll, with the more hazardous types of industries paying the highest rates.
• The benefits available to injured employees are set out, but may vary among jurisdictions.
• The benefits are available to employees regardless of fault or negligence on the part of employers or other employees. The only requirement is that injury must have resulted from the employment of the injured persons.

Question 12

Workers not covered under Workers Compensation legislation

Answer 12

• Farm employees
• Domestic servants
• Casual employees of certain types
• Certain clerical employees

Question 13

Worker’s compensation benefits

Answer 13

• Medical without limit unless covered by a provincial or territorial health plan
• Total disability based on percentage of earnings
• Death expenses (i.e. funeral) up to a specified amount
• Widow/widowers and dependents would receive a lump sum and monthly payments
• Rehabilitation program: assists disabled workers to return to active employment as quickly as possible, either to their former work or some other suitable work
• Employees could also be compensated if they contract certain occupational diseases
• Accident prevention program: inspecting the employer’s premises and operation to ensure that proper safety precautions are being practiced

Question 14

Employers Liability Insurance

Answer 14

Some trades and classes of employees are not subject to the various compensation acts.

• An employer could be sued under common law if the employee is injured in the course of employment and the injured employee could successfully recover damages if the employer is found negligent.
• Although there are still many employers liability insurance policies in use, in many instances insurers amend the CGL policy by endorsement to cover the employer’s exposure to liability.
• Unlike workers’ compensation, employers liability is not a no-fault coverage. For a claim to be paid, the claimant must prove that the employer was both responsible for the injury and negligent.

Question 15

Voluntary Compensation for Employees Endorsement

Answer 15

When employees are not covered under workers’ compensation legislation and employers have taken out employers liability coverage to protect such employees, employers may feel a moral obligation to compensate injured employees even if the employer is not legally liable. Voluntary compensation insurance is a method of doing this. It pays compensation according to certain schedules, which include weekly indemnity for total or partial disability and specified sums for dismemberment or death.

Question 16

Contingent Employers Liability Coverage

Answer 16

There are also occasions when employers liability insurance is required even if the employer is eligible under the acts.

• The legislation makes provision for employees normally based in one jurisdiction but working temporarily in another.
• There are circumstances when employers may be called upon to pay the workers’ compensation benefits paid to employees because they have assumed certain liabilities under contract.
• The workers’ compensation board may deny coverage to an injured worker on the grounds the injury occurred off the job. The worker would be free to bring suit in tort against the employer.