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Insurance Tips & Tricks
Jack J Demski
Agenda
• History Briefing
• Liability
– General Liability vs. Marine Liability
– Work Comp
– Umbrellas
• Insurance Tips
You don’t know Jack ?
• Jack Demski
– Insurance Advisor/Agent
– 3rd generation
• Specialties
– Cyber, Marine, International, Chemical,
Dealerships
• Passions
– Activities, games, debate, competition
Insurance
• What is it?− a practice or arrangement by which a company
or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
− a thing providing protection against a possible eventuality.
− Risk-transfer mechanism that ensures full or partial financial compensation for the loss or damage caused by event(s) beyond the control of the insured party
History
• Romans− 14th Century− Italian city of Genoa
• Lex Mercatoria – Merchant Law− Later redefined in 1680 English Court as…
Maritime Law
History
• Lloyds Coffee House − 1601 AD – First Issued Document− Protecting shipments, ships, and ventures
• Royal Exhange forms Society of Lloyd’s− Lord Chief Justice− Reforms Merchant Law with Common Law
• 1906 the Marine Insurance Act − Passed by English Parliament
• "Hull and Machinery" (H&M) − VS."Total Loss Only" (TLO) – now extinct− Re-insurance
• Marine insurance is often grouped with Aviation and Transit (cargo) risks, and in this form is known by the acronym 'MAT'.− The Marine Forms have also adapted oper the
years− Insurance contract – Maritime Insurance− Scheduled Marine – Cargo/Transit− Marine – Inland Marine
General Liability Tips
• CG 00 01 12 07We will pay those sums that the insured becomeslegally obligated to pay as damagesbecause of "bodily injury" or "property damage"to which this insurance applies. We will havethe right and duty to defend the insured againstany "suit" seeking those damages. However,we will have no duty to defend the insuredagainst any "suit" seeking damages for "bodilyinjury" or "property damage" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result.
General Liability
• What?− Damages to others as a direct or indirect result
from our operations and location
• Where?− Continental US, Canada – Standard GL
− This gets more complex for Manufacturing and Services provided outside borders by US entities
− International/Global – endorsement
General Liability
• The Worst Part− CG 00 01 12 07 section “g”− Aircraft, Auto or Watercraft exclusion
• The Auto policy allows for buyback on Automobile coverage − Aircraft coverage – Aircraft Liability − Watercraft coverage – next slide
Marine Liability
• Policies for Marine exposure− Marina Operators Legal Liability − Marina Protection & Liability − Marine General Liability − Ocean Marine Liability− Marine Contractor’s Liability− Ship Repairer’s Liability− Wharfinger’s Liability – harboring, anchorage,
custody
• Endorsement Add-ons− Auto – including boats− Auto – included off-road exposure− Bailee’s Marine – includes 3rd party boats− ETC…
Comparison
• Marine Liability
− Damages to..− 1st and 3rd party
− While − Operating− Using− Fixing
− Covers actions in the name of the “Insured”
• General Liability
− Damages to…− 1st and 3rd party
− While− Operating− Using− Fixing
− Negligence only!
− Covers actions by the insured
Comparison
• ML
• Written for Maritime Law
• On and Over H20
• Coverage on ALLopen water
• GL
• Written for Criminal and Tort Law
• On and Over Land
• Coverage in USA & Canada
Recap ML
• Extended GL policy− GL for Watercraft operations
• Ironic Situation− We need both when…− Much like Auto insurance
• VS. Endorsements− Mere buy-backs in coverage− Strict wording− Often times leave us open to interpretations
• Examples … Questions?
Real Life Examples
Excess Liability Policy
• Excess Liability Policy− Stand-a-lone policy that protects for claims
excess of your base policies.
− Umbrella is an Excess policy, but Excess is not an umbrella
− Will only grant higher limits for one Liability
− You can have multiple Excess Policies− Some Excess will cover designated underlying
− No occurrence limits, beside purchased amount
Umbrella Policy
• Umbrella Policy− A coverall or catchall policy to increase liability
limits of ALL underlying liability policies.
− Normally No Deductibles− Dirty practices to lower pricing
− Underlying− General Liability− Work Comp− Auto Liability− Marine Liability− Employers Liability− Employee Benefits/practices liability
Umbrella Policy
• No Liability coverage does not mean no Umbrella coverage
• Can be limited by occurrences− 5 Million aggregate / 1 million occurrence
• Will Default for International coverage and some uncover underlying… with Deductible
Members & Volunteers
• Standard Liability does NOT extend coverage to 3rd parties − Only employees and hired help
• Endorse General Liability − CG 20 21 11 85− Changes who is covered by your policy
Liquor Liability
• Changes per State !!!− Wisconsin – No Fault State− MN, IL, MI, IN – At Fault States
• Who is held Liable?− WI places the burden on the individual
− Thus insurance claims based on alcohol are declined
− MN, IL, MI, IN – place burden on the business for identifiable over intoxication and service to minors
• Recap – What does Liquor Liability cover− Damages resulting from consumption of alcohol
on premise or at a sponsored event
Insurance Tricks
• Property Coverage− CP 10 32 08 08 – Water Exclusion− Evil Trick
• Flood Insurance− Separate Policy− Federally Mandated, regulated
• Business Property vs. Building− If used for daily operations− If the items never leave the location
Inland Marine
• When/What to Schedule − Evaluation / Appraisal
− Mobile Equipment− Used for on and off premise
− Marine Equipment− Anything worth $2,000+− Or custom made equipment
− Docks & Piers
− Bridges and Man-Made structures
− Fine Arts
Inland Marine
• Do NOT schedule:− On premise tools
− On premise Maintenance equipment
− Parts and inventory − Motor parts− Items for repair
− Classic or Rare Collector items − Buy a collectors policy− Fine Arts coverage
• All are covered Elsewhere − better coverage
Additional Insureds
• What it does –− passing / assuming Liability − 3rd Parties
• Requested types:− Leaseholder− Lien holder − Mortgagee− Landlord− Loss Payee− Additional Insured− Additional Named Insured− Financer
Contract Guidelines
• Best Practices
• Start a Spreadsheet− Name, contact info, service provided− start date, end date− Insurance Certificate Provided
− File for 7 years
• Have you agent provide a COI’s List annually− Remove the contracts you DON’T need− Limits perceived Liability
Workers Compensation
• What is it?− Coverage for workforce while working
• Common Misconceptions − Owners are included
− Coverage across states
− Coverage across Countries
Work Comp.
• Longshore and Harbor Workers' Compensation Act (LHWCA)
− Longshoreman’s Endorsement
− Needed for workers on “Navigable” Waterways− International water, trips, sailing excursions…
• Foreign voluntary workers compensation (FVWC)− International Workers Compensation − Not to be confused or used to replace LHWCA
WC
• Repercussions− Employer is Responsible for excess damages
over state maximums or federal requirements− If the proper coverage is not enforce
• Weekly Wage Max -− WI - $961.01− IL- $1,076.38− MI – $965.62− MN - $1,026.00− LHWCA - $1,436.48− FVWC – $1,286.34
− Still calculated at 66 2/3% of weekly salary
