General Liability
This coverage pays for damages the insured becomes legally obligated to pay due to bodily injury, property damage, or personal and advertising injury that arises from its premises, operations, completed operations, and/or products.
Additional Insured
A person or organization not automatically included as an insured under an insurance policy who is included or added as an insured under the policy at the request of the named insured. A named insured’s impetus for providing additional insured status to others may be a desire to protect the other party because of a close relationship with that party (e.g., wanting to protect church members performing services for the insured church) or to comply with a contractual agreement requiring the named insured to do so (e.g., project owners, customers, or owners of property leased by the named insured). In liability insurance, additional insured status is commonly used in conjunction with an indemnity agreement between the named insured (the indemnitor) and the party requesting additional insured status (the indemnitee). Having the rights of an insured under its indemnitor’s commercial general liability (CGL) policy is viewed by most indemnitees as a way of backing up the promise of indemnification. If the indemnity agreement proves unenforceable for some reason, the indemnitee may still be able to obtain coverage for its liability by making a claim directly as an additional insured under the indemnitor’s CGL policy.
Additional insured status can be endorsed on to the CGL either by naming each individual additional insured or on a blanket basis. You will also have to separately cover the additional insured’s for both ongoing and completed operations as required by the additional insured. Be mindful of the contract language as often times a contract will require multiple entities be listed as additional insured’s. All of the blanket additional insured endorsements require that the additional insured be required in a written contract. Several of the blanket additional insured forms limit the additional insured status be granted to only those who you are under contract with and not anyone that the contract requires.
Waiver of Subrogation
An agreement between two parties in which one party agrees to waive subrogation rights against another in the event of a loss. The intent of the waiver is to prevent one party’s insurer from pursuing subrogation against the other party. Generally, insurance policies do not bar coverage if an insured waives subrogation against a third party before a loss. However, coverage is excluded from many policies if subrogation is waived after a loss because to do so would violate the principle of indemnity.
Primary and Non Contributory
This term is commonly used in contract insurance requirements to stipulate the order in which multiple policies triggered by the same loss are to respond. For example, a contractor may be required to provide liability insurance that is primary and noncontributory. This means that the contractor’s policy must pay before other applicable policies (primary) and without seeking contribution from other policies that also claim to be primary (noncontributory).
Umbrella
A policy designed to provide protection against catastrophic losses. It generally is written over various primary liability policies, such as the business auto policy (BAP), commercial general liability (CGL) policy, watercraft and aircraft liability policies, and employers liability coverage. The umbrella policy serves three purposes: it provides excess limits when the limits of underlying liability policies are exhausted by the payment of claims; it drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims; and it provides protection against some claims not covered by the underlying policies, subject to the assumption by the named insured of a self-insured retention (SIR).
Commercial Auto
A business auto policy is like a personal auto policy in that it covers property damage, legal bills, and medical expenses. A business auto policy typically has higher limits of coverage and can include coverage for hired, non-owned, borrowed or rented vehicles.
Business Auto Coverages
Auto Liability – Protects the business by paying for bodily injury, or property damage you become liable for because of a covered automobile accident.
Medical Payments – Pays medical expenses, up to your coverage limit, for you, your employees and your passengers arising from a motor vehicle accident, regardless of who is at fault.
Comprehensive – Pays for damage to your vehicle from something other than another vehicle like vandalism, theft, weather events and accidents involving animals.
Collison – Pays for damage to your vehicle from another vehicle whether you hit another vehicle or object, another vehicle hits you, or your vehicle rolls over, regardless of who is at fault.
Uninsured and Underinsured Motorist – Pays for medical expenses, loss of income and other damages owed to you, your employees (expenses not covered by workers’ compensation) or your passengers when an accident is caused by an uninsured or underinsured motorist.
Hired Auto – Provides liability coverage for rented, hired, or borrow vehicles the company does not own.
Non-Owned Auto – Provides liability coverage for autos the business does not own, lease, or hire.
Drive Other Car – (DOC) Provides non-owned auto coverage like a personal auto policy when an officer or executive does not carry a personal auto policy.