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Insurance - Under-kicked your insurance coverage

image Austin Goolsby, Vice President, TexCap Insurance, Dallas, TX

DALLAS/FT WORTH - We’ve all heard the phrase that he or she has “out-kicked their coverage” when referring to a significant other. It’s a common expression used to suggest that you, a friend or relative is in a relationship with someone they believe is out of your or their league. The contrary can be said all too often when it comes to your company’s general liability insurance.




    The commercial general liability (CGL) policy is provided to cover the two basic perils of property damage and bodily injury, and it’s made up of five basic parts. The declarations of the policy outline the basics that tailor’s the policy to meet the needs of your specific company or companies. Those include but are not limited to; the names of all entities insured, the limits of coverage and applicable deductibles, a description of operations divided up into classifications or class codes and list of their applicable locations, policy numbers and everyone’s favorite…premium. The insuring agreement contains the insurance company’s promise to pay on your behalf and defend your company should a claim arise during the policy term. This agreement is a binding contract between your company and the insurance company. Next up are the conditions, which cover the duties and rights of both parties, you and your insurance carrier. This section addresses your obligations to the carrier-i.e., notification of a claim or loss, non-renewals, cancellations, and the territory of coverage to name a few. In the midst of the conditions is where you can find the endorsements. These are the forms that can add or modify coverage that pertain to your individual risk. They also include the necessary forms to comply with today’s contracts like additional insured status, subrogation rights and if a waiver is included, primary-noncontributory status, a thirty-day notice of cancellation and a “per project” aggregate limit. Bringing up the rear are the exclusions, or what is NOT covered. This is the part of the policy that has all the abstract verbiage letting you know what they will not be paying for in the event of a claim. These can be a detriment to your company if they are not thoroughly explained prior to binding coverage and they can ultimately cause a company to close their doors. Some of the basic exclusions pertain to war, suits brought between named insureds (not to be confused with additional insureds), OCIPs or CCIPs, tract home work and violations of disclosing confidential or personal information. Insurance companies include these as a means to protect their liabilities from instances and scenarios considered financially uninsurable, which are backed by years of case law, some of which is still on-going. Every carrier has their own individual guidelines on how they address specific exclusion forms but some may be able to endorse the policy and allow coverage to accommodate these limitations. Simply put, depending on the carrier, specific perils like professional liability which is commonly referred to as errors and omissions (E&O) or even pollution liability can be endorsed to provide coverage under the general liability. Other common coverages allotted for under the CGL are employee benefits liability (EBL) and employment practices liability (EPL), which are intended to protect the insured entity or entities from potential internal grievances by employees rather than a third party.
    This basic definition of a CGL policy is a means to educate those that spend billions of dollars a year with their respective insurance companies and insurance agencies. The time of a loss or claim is not the time to read the fine print of the exclusions in your policy. The best practice is to be proactive and look over the CGL forms before your company’s insurance coverage is bound. As previously mentioned and more often than not, a carrier is willing to remove an exclusion or even endorse the policy to include the desired coverage. If not, there are more than enough insurance companies out there that will provide the necessary coverage to operate your business.
    At the end of the day, we all get what we pay for, and either your carrier is insuring your risk or you are. The difference is knowing. Talk with your current agent and make sure you don’t have any unpleasant surprises at the end of your policy.
    Austin Goolsby is a Vice President of TexCap Insurance, an independent insurance agency headquartered in Dallas, Texas. He is one of the leading members of the construction division at TexCap Insurance and has over 8 years of total experience in the field, on the building material supply side and insurance aspects of the industry. For more information please visit www.TexCapINS.com or you can contact Austin directly at 972-720-5384 or agoolsby@TexCapINS.com.

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