The Language and Meaning of Business Insurance and Insurance Endorsements

Your business insurance value has no relation to your policy premium or your policy premiums, the value of your insurance portfolio related directly to the risks you insure against. If you are not an insurance expert, it is important for you to meet with an insurance advisor to check your policies, their limits, the risks they cover, the risks they do not cover and any duplicate or missing coverage for your business. 

Understand the Language 

One example of not understanding the language of insurance affects manufacturers. Many insurance carriers slip into your policy an insurance clause called a Classification Limitation Endorsement. The danger with this endorsement is that the limitation of work is not known until only after a claim has been filed against you. So, you the coverage you thought you had does not exist because there are scores of manufacturing classifications. If you have a claim and are misclassified, who pays the bill is often a decision you hate. 

Do you have claims made or Occurrence Professional Liability Insurance? 

Occurrence Professional Liability Insurance 

The occurrence professional liability form of insurance pays for claims that occurred during the policy period, regardless of when the claim if filed. This kind of policy provides gives long-term protection for claims filed after the policy ends but happened while the policy was in force. 

Claims Made Insurance 

This form of insurance covers claims made during the active life of the policy. Although this type of professional protection is less cost than occurrence insurance, often it is a false saving. If your insurer stops writing this policy or you want to switch to an occurrence based policy, an incident that occurred during the covered period of your claims-made coverage but reported afterward get no response from the old carrier. You are on your own, unless you buy Extended Reporting Period (ERP) also known as "tail insurance." The cost of this insurance can be twice the price of your claims made policy. 

With a better understanding of insurance language, a meeting with your insurance advisor, whether you are a general contractor, a lawyer, or a retailer proves useful. The following endorsements (coverages you add to your base policy) impact your insurance policy and your bank account. 

Pollution Exclusion: 

Your Commercial General Liability policy always excludes liability from pollution. Through an endorsement it can be added to your policy. To get it, always ask your insurance advisor for the widest package of protection available - then ask if you have coverage for legal liability arising from an injury or property damage caused by pollution. 

Per Project Aggregate: 

the acronym is PPA and it covers extending the limits on every job you do to the full limits of liability. Say you carry $1 million per occurrence/$1 aggregate. A per project aggregate raises the aggregate for each project to $1 million. this insurance, just like pollution insurance applies to those in the environmental protection design or building industries. 

Additional Insured: 

The term applied mostly to liability and property insurance. An extra insured often is the owner of a construction project who wants the additional insured on the general contractor's liability and property insurance. To get the status of additional insured and the insurance coverage that status provides the general contractor uses an endorsement that either specifically covers the named insured or by a description in a blanket additional insured endorsement. 

Other coverages your business needs looking at include: 

Employee theft 

Inland Marine 

Libel/slander 

More 

Many times when endorsements are added to the policies you inadvertently duplicate coverage. An insurance advisor help you avoid that waste of premium dollars and helps make sure you buy the coverage you need - that is where the value is for the business insurance portfolio is.

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