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... Editor , Curtis Pearsall This content has not been rated yet. When I started in the agency side of the business in 1975, direct bill was strictly a Personal Lines billing method, used predominantly in Personal Auto. Today, direct bill has found its way into the Commercial arena. The claim involves a $200,000 lawsuit against both the agent and the carrier for improper cancellation of a Fidelity Bond. The agent had placed a Commercial package policy for a homeowners association. The premium was direct billed, except for the bond, which was agency billed. When the client completed the application, the premium they paid to the carrier included the premium for the bond. The carrier then refunded the bond portion to the client on the basis that it was to be agency billed. Meanwhile ... the agent, looking for payment of the bond, was following up with notices for the owed bond premium. When the client didn't respond, the agent requested that the carrier cancel the bond for non-payment of premium. The homeowners association then reported an embezzlement of some $200,000 by a prior organization president. When they submitted a claim under the bond, the carrier denied coverage due to the cancellation. Questions of agency liability focused on the conversations and information communicated by the agency to the client, especially where there was a difference in the method of premium billing. The case was resolved when the carrier accepted coverage on the basis that the loss occurred before the cancellation. How might the agency have avoided the claim? This situation had the built-in problem of two methods of premium payment ...

... Editor , Curtis Pearsall This content has not been rated yet. When I started in the agency side of the business in 1975, direct bill was strictly a Personal Lines billing method, used predominantly in Personal Auto. Today, direct bill has found its way into the Commercial arena. The claim involves a $200,000 lawsuit against both the agent and the carrier for improper cancellation of a Fidelity Bond. The agent had placed a Commercial package policy for a homeowners association. The premium was direct billed, except for the bond, which was agency billed. When the client completed the application, the premium they paid to the carrier included the premium for the bond. The carrier then refunded the bond portion to the client on the basis that it was to be agency billed. Meanwhile ... the agent, looking for payment of the bond, was following up with notices for the owed bond premium. When the client didn't respond, the agent requested that the carrier cancel the bond for non-payment of premium. The homeowners association then reported an embezzlement of some $200,000 by a prior organization president. When they submitted a claim under the bond, the carrier denied coverage due to the cancellation. Questions of agency liability focused on the conversations and information communicated by the agency to the client, especially where there was a difference in the method of premium billing. The case was resolved when the carrier accepted coverage on the basis that the loss occurred before the cancellation. How might the agency have avoided the claim? This situation had the built-in problem of two methods of premium payment ...

...r for improper cancellation of a Fidelity Bond. The agent had placed a Commerc...

..._____   Bonds:   Fidelity ______________   Surety ____...________   Bonds:   Fidelity ______________   Surety _...

...rime ______________ Bonds: Fidelity ______________ Surety _________... Crime ______________ Bonds: Fidelity ______________ Surety ______...

...eering and inspection services. Fidelity. Fidelity bonds also are less often written wi...ll claims. Loss adjustment costs in fidelity can be extremely high because of ...

... Fidelity bonds ...

...bably not be covered. However, a Fidelity bond (for employee dishonesty), whi...

...3. BONDS [ ] BID-performance [ ] fidelity [ ] other: type_____________________...

... for property damage in one accident, and Employee shall deliver to Employer a true copy of such Automobile Liability insurance policy. Employee agrees to indemnify and hold Employer harmless from any claims arising out of the operation of such automobile by Employee. (v ) Qualification for Surety Bond. Employee agrees that he or she will furnish all information and take any other steps necessary to enable Employer to obtain a Fidelity bond conditioned on the rendering of a true account by Employee of all moneys, goods, or other property which may come into the custody, charge, or possession of Employee during the term of his or her employment. The surety company issuing the bond and the amount of the bond must be acceptable to Employer at the sole discretion of Employer. All premiums on the bond are to be ... one person in one accident, $500,000 for bodily injury or death in one accident, and $100,000 for property damage in one accident, and Employee shall deliver to Employer a true copy of such Automobile Liability insurance policy. Employee agrees to indemnify and hold Employer harmless from any claims arising out of the operation of such automobile by Employee. (v ) Qualification for Surety Bond. Employee agrees that he or she will furnish all information and take any other steps necessary to enable Employer to obtain a Fidelity bond conditioned on the rendering of a true account by Employee of all moneys, goods, or other property which may come into the custody, charge, or possession of Employee during the term of his or her employment. The surety company issuing the bond and the ...