Coverage Explanations

Abuse Liability

When Companies and Non-Profits provide services to Children, Physically or Mentally Challenged, or even the Elderly – there is an increased risk of Abuse and/or Sexual Harassment allegations against them.  Most Commercial General Liability policies contain an Abuse Exclusion, meaning that the insurer is not intending to defend or pay claims arising from allegations of abuse.  One way of managing this risk is to consider purchasing Abuse Liability insurance to cover the exposure.  There are however, a only few markets willing to offer this type of coverage, and then it is dependent upon receipt of additional information. If the coverage is subsequently offered, it will be subject to additional premium.

Automobile/Fleets/Garage Insurance Policies

Automobile Insurance: Bodily injury or property damage to a Third Party arising from the ownership, use or operation of an automobile. Additionally, Auto insurance policies offer the ability to purchase coverage to repair physical damage to your own vehicles, subject to the deductible.

Fleet Insurance: When a business has a number of owned vehicles, they can insure them all on one policy and can qualify for additional discounts for being a part of a “Fleet” and their own loss history. Insurers differ in their requirements for Fleet rating. Some start with as low as 6 vehicles, while others require 10-12 vehicles before allowing Fleet rating.

Garage Liability Insurance: Protection for an automobile dealer, repairer, service station, valet, etc for while the company employees are have custody or are operating their customer’s vehicles. These companies should have both Third Party Liability as well as Physical Damage for damage to the Customer’s or their Own Autos.

Business Interruption Insurance

When you operate a Business, in the event of loss due to an insured peril, your business could also be subject to various types of business expenses and loss of income. These expenses are not automatically covered by the insurance policy, to protect against these losses you must purchase Business Interruption insurance. There are three main types of Business Interruption Insurance:  Profits, Gross Earnings and Extra Expense.

Profits Business Interruption Insurance – covers the business’ loss of income until the business is back to the same Financial position as it was prior to the loss. The Indemnity period can be extended for longer periods, depending on the exposure of the business and how long it would take them to get back up and running and get back to the same profitability level.  12 months is the most usual, however, you can also purchase 18 month and 24 month Period of Indemnities. To obtain this coverage a Company needs to prepare a Profits Worksheet to determine the required limit of insurance. After a loss, if the adequate limit was not insured, there can be a co-insurance penalty applied to the loss. As this coverage is the most extensive, pays the longest and for highest amounts, it also follows therefore that it is the most expensive.

Gross Earnings Business Interruption Insurance – more economical than Profits coverage, Gross Earnings covers the business’ loss of income until the business is back up and running. Similar to the Profits coverage, the business must complete a Gross Earnings Worksheet to determine the limit to be insured – and if the proper limit was not insured, there can be a co-insurance penalty applied to the loss. This coverage is more the middle ground in both coverage and premium.

Extra Expense Business Interruption Insurance – Extra Expense Insurance only covers the expenses the company incurs to get back up and running and does not cover Loss of Income at all. This insurance typically has lower limits and, with its more limited coverage, Extra Expense also has the most reasonable premium.

Commercial General Liability (CGL)

Commercial General Liability (formerly known as Comprehensive General Liability) includes 4 sections of coverage

Section A: Bodily Injury and Property Damage –  This coverage protects the policy holder when he/she is found legally obligated for damages of property damage or bodily injury to a third party arising out of his/her negligence and/or products. This also covers the policy holder’s Employees actions within the scope of their work (please note Professional Liability is excluded and must be covered by an Errors & Omissions policy – refer to common exclusions in the wording)

Section B.- Personal Injury & Advertising Injury LiabilityThis is only covered when there is a limit indicated on the policy declarations and in some cases,  depending on the type of business insured, may not be available without a special policy. This coverage deals with damage to a person’s character, reputation and/or position in the community as a result of libel (in print) or slander (verbal defamation) and is intended to protect the policy holder accused of libel or slander.

Section C. Medical Payments – This coverage is to provide for a third party’s minor medical expenses for an injury that occurred on the policy holder’s premise – regardless if negligent or not.  In essence, the coverage is offered as a way to hopefully avoid a costly law suit. This does not cover injury to employees and if there are tenants in the policy holder’s building, it does not cover tenants injured within their own suite.  Again, please refer to wording for full list of exclusions.

Section D. Tenant Legal Liability – If you unintentionally cause property damage to the workspace you rent or lease this coverage would respond for the space you occupy.

Course of Construction / Builders Risk

A special type of property insurance which indemnifies against damage to buildings while they are under construction.

Directors & Officers Liability

Insurance that provides coverage for members of boards of directors against “wrongful acts,” which might include actual or alleged errors, omissions, misleading statements, and neglect or breach of duty on the part of the board of directors.

Employment Practices Liability

This policy focuses on protecting companies from claims based on Harassment, Discrimination & unfair dismissal. Employment Practices Liability typically forms a part of a Directors & Officers Liability Insurance policy or a Professional Liability policy, however, there is also the ability to purchase this coverage on a separate specific policy.

Equipment Breakdown Boiler and Machinery Insurance

This coverage protects an organization against any losses that result from a breakdown of heating, refrigeration, air conditioning equipment, pressure vessels, boilers, production machinery, electrical apparatus and/or electronic equipment.

Kidnap & Ransom

Designed to protect individuals and corporations operating in high-risk areas around the world.

Umbrella Legal Liability

A special form of liability policy designed to protect the insured for certain unknown contingencies over and above the normal coverages and to provide excess insurance.

Portable Tools

Property taken offsite is normally excluded from your Commercial Property or Homeowner’s/Tenant’s policy.  As such, businesses need to have their portable equipment (including laptops) specifically listed on a Commercial policy. This typically means providing the Make, Model, Serial number and value of the various items that leave the premises.
When there is a “package” purchased with an extension wording, typically there is a small amount of Portable Tools and/or Contractors Equipment automatically included in the wording. In this case, we would only need to list items when the value exceeds the extension or if the item value is over $1,000.
Portable Tools are typically defined as Portable Hand Tools. Something that is relatively easy to pick up and walk away with. Higher valued items (anything over $1,000) should be specifically scheduled, while lower valued items would have a Total of Miscellaneous Tools limit shown and not be required to be scheduled.
Contractor’s Equipment is typically defined as bigger items, not so easily transported. This could be Ladders, Scaffolding, Compressors, Band saws, to bobcats or welders, etc. These items are typically scheduled by item.

Product Recall

Designed for manufacturers, this coverage insures against the unexpected cost of recalling a product from the market due to faulty design, errors in manufacturing, or intentional tampering not caused or known by the insured and that may cause harm to customers.

Product recall applies to both food type products, as well as other general merchandise.  Completion of a Product Recall application, outlining manufacturing processes/quality control procedures would be required in order to obtain quotes for this type of insurance.

Professional Liability

Protects professionals against liability for damages and cost of defense based upon his/her alleged or real professional errors and omissions or mistakes, e.g., architects, engineers, medical malpractice, attorneys.

The Commercial General Liability wording specifically excludes allegations made due errors or omissions in plans, reports, surveys, drawings, opinions, reports, recommendations that professionals make.

Sometimes when we talk to new clients who are researching insurance due to a contractual requirement, we have ta a more difficult time as some people underestimate the importance of Errors and Omissions coverage.  My thoughts are that, even if the allegations are groundless, can you afford the cost to defend the possible allegations? CISG considers that we have expertise in the special needs of Professionals.

Property, Cargo

Business’ have a variety of different property exposures. From Property / Equipment that stays on your business site, improvements made to your premises, to property that leaves the site. There are also special risks to business’ that transport property of others or import stock / materials from abroad.

Surety / Bonds / Fidelity

Our Business Insurance Specialists handle a wide range of Surety / Contract Bonding requirements as well as Miscellaneous Bonds with a variety of insurers across Canada.

Some of the surety products offered would include:

  • Bid Bonds, Consents of Surety & Pre-qualification Letters
  • Performance & Labour & Material Payment Bonds
  • Lien Bonds and Release of Hold Back Bonds
  • Developer Bonds
  • Pre-paid Contractor Bonds

Other Miscellaneous Surety Bonds including:

  • Auctioneers
  • Canada Customs Bonds
  • Consumer Protection – Collection Agencies
  • Consumer Protection – Debt Repayment
  • Direct Sellers Bonds
  • Driver Training Schools
    Excise – Brewers and Spirits / Tobacco
  • Foreign Employment Agency
  • Home inspectors
  • Private Investigator & Security Guards
  • Real Estate Agent / Broker Bond

Other Miscellaneous Bonds as requested.

Warehouse Operators Legal Liability

Insurance coverage against liability that might be incurred by businesses that store property of others for a fee.  Previously referred to as warehousemen’s legal liability insurance.

Wrap Up Liability

A liability policy that serves as all-encompassing insurance which protects all contractors and subcontractors working on a large project. Wrap-up insurance is intended for larger construction projects.

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