1. Insuring Commercial Casualty The National Alliance for Insurance Education & Research Austin, Texas

2. Legal Liability © 2009 The Society of CISR, Inc.

3. Learning Objectives 1.Identify and explain sources of liability 2.Explain the types of legal liability and how they can be created 3.Describe the types of damages that may be covered by a liability insurance policy © 2009 The Society of CISR, Inc.

4. Liability Defined A responsibility or obligation to others, which courts recognize and enforce © 2009 The Society of CISR, Inc.

5. Sources of Liability Premises Operations Products Completed Operations Ownership, Maintenance or Use of Autos © 2009 The Society of CISR, Inc.

6. Sources of Liability Ownership, Maintenance or Use of Other Conveyances Employing Workers Liquor Environmental Impairment Professional Activities Bailee Liability © 2009 The Society of CISR, Inc.

7. Liability Triggers Direct Liability: Your Conduct Vicarious Liability: Conduct of Others -Employer and Employee -Agency and Principal -Contractor and Subcontractor -Owner and Manager -Owner and Independent Contractor © 2009 The Society of CISR, Inc.

8. Legal Liability Previously defined as a responsibility or obligation to others, which the courts recognize and enforce © 2009 The Society of CISR, Inc.

9. Types of Legal Liability TortsStatutesContracts Assumption of Liability Breach of Contract Modify Common Law Intentional Torts Negligence Strict Liability Absolute Liability

10. Torts Negligence Duty OwedBreach of that Duty DamagesProximate Cause Four Elements of Negligence © 2009 The Society of CISR, Inc.

11. Duty OwedBreach of that Duty DamagesProximate Cause Four Elements of Negligence Person required to operate an automobile safely Person runs a red light Property damage to the other car and bodily injury to the other driver The breach of the duty caused the BI and PD © 2009 The Society of CISR, Inc.

12. Intentional Torts Intentional or voluntary act which results in injury or loss to another –Libel –Slander –Wrongful entry or wrongful eviction –Assault and/or battery –Wrongful detention –False arrest –Copyright infringement, trademark infringement, etc. © 2009 The Society of CISR, Inc.

13. Strict Liability Concept applied in product liability cases Manufacturer, distributor, or seller is liable for any and all defective or hazardous products which unduly threaten a consumer’s health and safety Consumer only has to prove the defect and damages © 2009 The Society of CISR, Inc.

14. Absolute Liability Liability without regard to fault or negligence Applies when known or unusual conditions are allowed to exist Applies regardless of the care exercised Includes dynamite, gasoline, chemicals, explosives, wild animals in captivity, domestic animals known to be abnormally dangerous, etc. © 2009 The Society of CISR, Inc.

15. Statutory Liability Rule or law enacted by a legislative body providing direction or prohibition Statutes override common law Examples: –Workers Compensation –Dram Shop or Liquor Liability –EEOC & Employment Related –ADA © 2009 The Society of CISR, Inc.

16. Contractual Liability Agreement between two or more parties Obligation to do or not to do a particular thing One party assumes the financial consequences or certain liabilities of another © 2009 The Society of CISR, Inc.

17. Contractual Liability Parties Commonly Involved –Lessor/Lessee –Owner/Contractor –Contractor/Subcontractor –Manufacturer/Distributor © 2009 The Society of CISR, Inc.

18. “Insured Contracts” Specific Types of Contracts that will be Defined in Liability Policies Not All Contracts are “Insured Contracts” Breach of Contract Not Typically Covered by Liability Insurance Policies © 2009 The Society of CISR, Inc.

19. Damages Compensatory –Sums of money that will compensate for the loss –Includes Special Damages and General Damages –Represents the combined total of monetary losses actually sustained by the plaintiff © 2009 The Society of CISR, Inc.

20. Damages Special Damages –Specific dollar amounts that cover medical bills, lost income, etc. General Damages –Subjective dollar amounts to cover intangible losses such as pain & suffering, loss of consortium, etc. © 2009 The Society of CISR, Inc.

21. Damages Punitive/Exemplary Damages –Imposed to punish the wrongdoer or deter conduct in the future –Statute may restrict the amount or prohibit insurability –Policy language may exclude punitive damages © 2009 The Society of CISR, Inc.

22. Summary of Learning Objectives 1.Identify and explain sources of liability 2.Explain the types of legal liability and how they can be created 3.Describe the types of damages that may be covered by a liability insurance policy © 2009 The Society of CISR, Inc.

23. Commercial General Liability © 2009 The Society of CISR, Inc.

24. Learning Objectives 1.Identify the exposure areas that may be covered by the Commercial General Liability Policy Coverage Form 2.Determine “Who is an Insured” in a Commercial General Liability Policy for specific situations 3.Identify the three major coverage sections of the Commercial General Liability Coverage Form and describe the general liability exposure areas included within each section © 2009 The Society of CISR, Inc.

25. Learning Objectives 4.Identify the limits of insurance of the Commercial General Liability Coverage Form and apply the limits to specific loss situations 5.Apply the various exclusions of the Commercial General Liability Coverage Form © 2009 The Society of CISR, Inc.

26. Liability Exposures Covered by the CGL Premises –Owners, landlords, and tenants –Ownership, maintenance or use –Operations necessary for the premises © 2009 The Society of CISR, Inc.

27. Liability Exposures Covered by the CGL Operations –Activities of the operation –Includes service and repair away from the premises while in process © 2009 The Society of CISR, Inc.

28. Liability Exposures Covered by the CGL Product Liability –Coverage begins when the product has left the insured’s premises and is no longer in the insured’s possession © 2009 The Society of CISR, Inc.

29. Liability Exposures Covered by the CGL Completed Operations –Coverage begins when the business operation is completed © 2009 The Society of CISR, Inc.

30. Liability Exposures Covered by the CGL Contractual Liability –Liability arising from an “insured contract” or other contractual obligations covered by the policy © 2009 The Society of CISR, Inc.

31. Liability Exposures Covered by the CGL Contingent Liability –Liability arising out of work performed for the insured by someone else –Protects an insured from the negligence of an “independent” © 2009 The Society of CISR, Inc.

32. Liability Exposures Covered by the CGL Personal and Advertising Injury –Named perils as defined in the policy © 2009 The Society of CISR, Inc.

33. Who is an Insured? © 2009 The Society of CISR, Inc. IndividualOrganization Partnership or Joint Venture Trust Limited Liability Company Named Individual Spouse Named Partnership Joint Venture Partners Members Spouses Named Entity Executive Officers Directors Stockholders Named LLC You Members Managers Named Trust Trustees PLUS OTHERS

34. Who is an Insured? Individual –Includes spouse with respect to the conduct of the business Partnerships or Joint Ventures –Entity –Members, partners and their spouses Other Organizations –Entity –Executive officers, directors and stockholders © 2009 The Society of CISR, Inc.

35. Who is an Insured? Limited Liability Company (LLC) –Entity –Members and managers Trusts © 2009 The Society of CISR, Inc.

36. Who is an Insured - Others © 2009 The Society of CISR, Inc. Death Volunteer Workers Employees Real Estate Managers Legal Representative if Insured Dies Person or Organization With Temporary Custody if Named Insured Dies NEWLY ACQUIRED ORGANIZATION 90 Days or End of Policy Period DOES NOT INCLUDE: Partnerships Joint Ventures Limited Liability Companies

37. Who is an Insured - Others Employees within scope of employment Volunteer worker Real estate managers Person/Organization with temporary custody if named insured dies Legal representative if named insured dies © 2009 The Society of CISR, Inc.

38. Who is an Insured - Others Newly acquired or newly formed organizations –Earlier of 90 days or end of policy period –No automatic coverage for partnerships, joint ventures or LLCs © 2009 The Society of CISR, Inc.

39. Definitions Auto –Land vehicle –Includes attached machinery or equipment –Land vehicle subject to compulsory or financial responsibility –Does not include mobile equipment Mobile Equipment –Defined as six types of land vehicles –Identifies several types of land vehicles that are autos and not mobile equipment © 2009 The Society of CISR, Inc.

40. Definitions Property Damage –Direct damage and loss of use Coverage Territory –United States –Territories and Possessions –Puerto Rico –Canada –And... © 2009 The Society of CISR, Inc.

41. Definitions Coverage Territory –Limited Worldwide if: Products made or sold in the coverage territory OR Arising out of activity of a person whose home is in the territory but is away for a short time on insured’s business OR Personal and advertising injury take place through the Internet or similar communications means AND Liability is determined in a suit brought in the coverage territory or in a settlement agreed to by the insurance company © 2009 The Society of CISR, Inc.

42. Coverage Sections of the CGL Coverage Form Coverage A – Bodily Injury and Property Damage –Covered Unless Excluded Coverage B – Personal and Advertising Injury –Named Perils Coverage C – Medical Payments to Others –No Fault Coverage © 2009 The Society of CISR, Inc.

43. Coverage Sections of the CGL Coverage Form Coverage A – Bodily Injury and Property Damage –Caused by an occurrence –Legal responsibility required –Duty to defend –No defense if the loss is not covered –Exclusions apply © 2009 The Society of CISR, Inc.

44. Coverage Sections of the CGL Coverage Form Coverage B – Personal and Advertising Injury –Caused by a committed offense –Legal responsibility required –Duty to defend –No defense if the loss is not covered –Named peril coverage © 2009 The Society of CISR, Inc.

45. Coverage Sections of the CGL Coverage Form Coverage B – Personal and Advertising Injury –Injury arising out of one or more of the following: False arrest, detention or imprisonment Malicious prosecution Wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor © 2009 The Society of CISR, Inc.

46. Coverage Sections of the CGL Coverage Form Coverage B – Personal and Advertising Injury –Injury arising out of one or more of the following: Oral or written publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services The use of another’s advertising idea in insured’s advertisement Infringing upon another’s copyright, trade dress or slogan in insured’s advertisement © 2009 The Society of CISR, Inc.

47. Coverage Sections of the CGL Coverage Form Coverage B – Personal and Advertising Injury –Exclusions designed to eliminate coverage for acts within insured’s control –Internet exclusions apply © 2009 The Society of CISR, Inc.

48. Coverage Sections of the CGL Coverage Form Coverage C – Medical Payments to Others –Caused by an accident –Legal responsibility NOT required –Purpose is goodwill and to reduce lawsuits © 2009 The Society of CISR, Inc.

49. Coverage Sections of the CGL Coverage Form Coverage C – Medical Payments to Others –Bodily injury caused by an accident: On premises insured owns or rents On ways next to premises Because of insured’s operations Must take place in coverage territory Must be reported within one year of accident Exclusions apply Separate per person sub-limit of insurance © 2009 The Society of CISR, Inc.

50. Coverage Sections of the CGL Coverage Form Supplementary Payments –Expenses (Defense) –Bail bonds $250 –Attachment bonds –Reasonable expenses of insured –Costs taxed –Prejudgment and post judgment interest © 2009 The Society of CISR, Inc.

51. Coverage Sections of the CGL Coverage Form Damage to Premises Rented to You –Peril of fire –Separate per premises sub-limit of insurance –Perils other than fire © 2009 The Society of CISR, Inc.

53. General Aggregate $1,000,000 Products Completed Operations Aggregate $1,000,000 Each Occurrence $500,000 BI & PD Products & Completed Operations Personal or Advertising Injury Limit Per Person or Organization $500,000 BI & PD Premises and Operations Medical Payments Per Person Limit $5,000 Damages to Premises Rented To You Per Premises Limit $50,000

54. Limits of Insurance General Aggregate Products-Completed Operations Aggregate Importance of Aggregates! © 2009 The Society of CISR, Inc.

55. Limits of Insurance Each Occurrence Limit Personal and Advertising Injury –Any one person/organization Medical Payment Limit –Any one person –Subject to Each Occurrence Limit Damage to Premises Rented to You –Per premises limit –Subject to Each Occurrence Limit © 2009 The Society of CISR, Inc.

60. Exclusions Expected or Intended Injury –May use reasonable force Contractual –Still has coverage for damages the insured would have had without the contract or agreement –Still has coverage for an “insured contract” © 2009 The Society of CISR, Inc.

61. WHAT IS AN INSURED CONTRACT? L Lease of Premises E Easement/License Agreement Subject to Exception A Agreement with Municipality Subject to Exception S Sidetrack Agreement with Railroad E Elevator Maintenance Agreement + Tort Liability Assumed by Insured © 2009 The Society of CISR, Inc.

62. Exclusions Liquor Liability –If insured is in the business –Host Liquor is covered Workers Compensation Employer’s Liability © 2009 The Society of CISR, Inc.

63. Exclusions Pollution –Still covers bodily injury caused by smoke, fumes, vapor or soot from equipment used to heat the building –Still covers bodily injury or property damage if you are a contractor and: The owner or lessee of the premises, site or location has been added to your policy as an additional insured with respect to that additional insured at that location; and Insured has never owned, occupied, rented or loaned the location to any insured other than that additional insured © 2009 The Society of CISR, Inc.

64. Exclusions Pollution –Still covers bodily injury or property damage arising out of heat, smoke or fumes from a “hostile fire” – Premises –Still covers bodily injury and property damage arising out of the escape of fuels, etc., needed for the operation of mobile equipment. –Still covers bodily injury or property damage arising out of heat, smoke or fumes from a “hostile fire” – Operations –Still covers bodily injury or property damage sustained within a building and caused by the release of gases, fumes, etc., from materials brought into that building in connection with operations being performed by insured or on insured’s behalf by a contractor or subcontractor © 2009 The Society of CISR, Inc.

65. Exclusions Aircraft, Auto or Watercraft –Still covers watercraft ashore on premise insured owns or rents. –Still covers a non-owned watercraft that is less than 26 feet long and is not used to carry people or property for a charge © 2009 The Society of CISR, Inc.

66. Exclusions Aircraft, Auto or Watercraft (continued) –Still provides liability arising out of parking an auto on or on the ways next to insured’s premises Important: The policy does not provide property damage coverage for the auto being parked or property in the care, custody or control of the insured! © 2009 The Society of CISR, Inc.

67. Exclusions Aircraft, Auto or Watercraft (continued) –Still covers liability assumed in an “insured contract” for the ownership, maintenance or use of aircraft or watercraft –Still covers bodily injury or property damage arising out of the use of “mobile equipment” © 2009 The Society of CISR, Inc.

68. Exclusions Mobile Equipment –Coverage applies for the “operation” of the mobile equipment –Excludes transportation of mobile equipment by an auto owned or operated or rented or loaned to any insured –Excludes mobile equipment practicing, preparing, etc., for a race, speed, demolition or stunting activity War © 2009 The Society of CISR, Inc.

69. Exclusions Damage to Property –Excludes property the insured owns, rents or occupies –Excludes premises the insured sells, gives away or abandons –Property loaned to the insured –Personal property in the care, custody or control of the insured –Part of real property on which work being done or which requires repair, etc. because of the insured’s incorrectly performed work © 2009 The Society of CISR, Inc.

70. Exclusions Damage to Your Product –Resultant property damage, caused by the insured’s product, is covered Damage to Your Work –Resultant damage is covered –Covers property damage to insured’s work if done on insured’s behalf by a subcontractor © 2009 The Society of CISR, Inc.

71. Exclusions Damage to Impaired Property Recall of Products, Work or Impaired Property Personal and Advertising Injury Electronic Data Distribution of Material in Violation of Statutes Exclusion Notes © 2009 The Society of CISR, Inc.

72. Summary of Learning Objectives 1.Identify the exposure areas that may be covered by the Commercial General Liability Policy Coverage Form 2.Determine “Who is an Insured” in a Commercial General Liability Policy for specific situations 3.Identify the three major coverage sections of the Commercial General Liability Coverage Form and describe the general liability exposure areas included within each section © 2009 The Society of CISR, Inc.

73. Summary of Learning Objectives 4.Identify the limits of insurance of the Commercial General Liability Coverage Form and apply the limits to specific loss situations 5.Apply the various exclusions of the Commercial General Liability Coverage Form © 2009 The Society of CISR, Inc.

74. Business Auto Coverage © 2009 The Society of CISR, Inc.

75. Learning Objectives 1.Identify the exposures covered by the Business Auto Policy 2.Determine who is and who is not an insured in the Business Auto Policy for specific situations 3.Explain specific definitions and policy conditions 4.Identify a covered auto when presented the appropriate symbol information 5.Determine whether a newly acquired auto is covered © 2009 The Society of CISR, Inc.

76. Learning Objectives 6.Identify what types of vehicles are granted coverage through the Liability Extension 7.Apply the liability exclusions found in the Business Auto Policy 8.Apply the physical damage exclusions found in the Business Auto Policy © 2009 The Society of CISR, Inc.

77. Exposures Covered by the Business Auto Coverage Form Liability for Ownership, Maintenance or Use –Owned –Non-Owned –Hired Physical Damage –Owned –Hired or Borrowed © 2009 The Society of CISR, Inc.

78. Business Auto Policy Structure © 2009 The Society of CISR, Inc.

79. Business Auto Coverages Policy Coverages –Liability –Physical Damage Endorsement Coverages –Medical Payments –Personal Injury –Uninsured/Underinsured Motorists Additional Forms © 2009 The Society of CISR, Inc.

81. Who is an Insured? Named Insured any Covered Auto Others Using Covered Auto With Permission EXCEPT: –Owner of hired or borrowed auto –Employee using own vehicle –Anyone in the auto business –Loading & unloading with exceptions –Partner/member using own vehicle Vicarious Liability © 2009 The Society of CISR, Inc.

82. Definitions Accident Auto –Travel on public road –Attached machinery or equipment –Land vehicle subject to compulsory or financial responsibility –Does not include mobile equipment –Same definition as the CGL Bodily Injury Property Damage © 2009 The Society of CISR, Inc.

83. Definitions Insured Contract –LEASE + Rental Agreement but not for physical damage Loss Mobile Equipment –Same definition as the CGL Pollution –Will discuss in Exclusions Trailer © 2009 The Society of CISR, Inc.

84. General Conditions Other Insurance TYPEPRIMARYEXCESS Covered Auto – OwnedX Trailer if Covered Auto & Connected to an Owned Covered Auto X Covered Auto - Not OwnedX Trailer if Covered Auto & Connected to any Motor Vehicle Not Owned X Liability Assumed Under ContractX © 2009 The Society of CISR, Inc.

85. General Conditions Policy Period and Coverage Territory –Policy period shown on declarations Territory –United States of America –Territories & possessions –Puerto Rico –Canada –And... – © 2009 The Society of CISR, Inc.

86. General Conditions Worldwide if: –Covered auto –Private passenger type –Leased, hired, rented or borrowed without a driver for 30 days or less; And –Insured’s liability is determined in a suit in the policy territory or accepted by the insurance company © 2009 The Society of CISR, Inc.

87. Covered Autos Symbols Designate Coverage © 2009 The Society of CISR, Inc. CoveragesCovered Autos LimitPremium Liability$500,000$ Personal Injury Protection (Or Equivalent No-Fault Coverage) Separately Stated In Each Personal Injury Protection Endorsement Minus $ Ded.$ Added Personal Injury Protection (Or Equivalent Added No-Fault Coverage) Separately Stated In Each Added Personal Injury Protection Endorsement Minus $ Ded. $ Auto Medical Payments$$ Uninsured Motorists$ Underinsured Motorists (When Not Included in Uninsured Motorists Coverage) $ Physical Damage Comprehensive Coverage Actual Cash Value Or Cost Of Repair, Whichever Is Less, Minus $250 Deductible For Each Covered Auto, But No Deductible Applies To Loss Caused By Fire Or Lightning. See Item Four For Hired Or Borrowed “Autos”. $ Physical Damage Specified Causes of Loss Coverage Actual Cash Value Or Cost Of Repair, Whichever Is Less, Minus $25 Deductible For Each Covered Auto For Loss Caused By Mischief OR Vandalism. See Item Four For Hired Or Borrowed “Autos”. $ Physical Damage Collision Coverage Actual Cash Value Or Cost of Repair, Whichever Is Less, Minus $500 Deductible.$ Physical Damages Towing and Labor $ For Each Disablement Of A Private Passenger “Auto”$ PREMIUM FOR ENDORSEMENTS$ *ESTIMATED TOTAL PREMIUM$ *THIS POLICY MAY BE SUBJECT TO FINAL AUDIT

88. Covered Autos Symbols May Differ From Coverage to Coverage © 2009 The Society of CISR, Inc. CoveragesCovered Autos LimitPremium Liability2, 8, 9$500,000$ 1,459.00 Personal Injury Protection (Or Equivalent No-Fault Coverage) Separately Stated In Each Personal Injury Protection Endorsement Minus $ Ded. Added Personal Injury Protection (Or Equivalent Added No-Fault Coverage) Separately Stated In Each Added Personal Injury Protection Endorsement Minus $ Ded. Auto Medical Payments2$ 5,000$ 125.00 Uninsured Motorists Underinsured Motorists (When Not Included in Uninsured Motorists Coverage) Physical Damage Comprehensive Coverage 7Actual Cash Value Or Cost Of Repair, Whichever Is Less, Minus $250 Deductible For Each Covered Auto, But No Deductible Applies To Loss Caused By Fire Or Lightning. See Item Four For Hired Or Borrowed “Autos”. $ 320.00 Physical Damage Specified Causes of Loss Coverage Actual Cash Value Or Cost Of Repair, Whichever Is Less, Minus $25 Deductible For Each Covered Auto For Loss Caused By Mischief OR Vandalism. See Item Four For Hired Or Borrowed “Autos”. Physical Damage Collision Coverage 7Actual Cash Value Or Cost of Repair, Whichever Is Less, Minus $500 Deductible.$ 598.00 Physical Damages Towing and Labor $ For Each Disablement Of A Private Passenger “Auto” PREMIUM FOR ENDORSEMENTS *ESTIMATED TOTAL PREMIUM *THIS POLICY MAY BE SUBJECT TO FINAL AUDIT

89. Symbol 1 Can be used for liability only Triggers liability coverage for any auto Provides the broadest coverage available © 2009 The Society of CISR, Inc.

90. Symbols 2, 3, and 4 Used for owned autos –Symbol 2 Owned Autos –Symbol 3 Owned Private Passenger Autos Only –Symbol 4 Owned Other than Private Passenger Autos Autos owned at inception and newly acquired Can be used for all coverages (Towing for private passenger autos only) © 2009 The Society of CISR, Inc.

91. Symbol 5 Owned autos required to have no-fault benefits Covers autos owned at inception and newly acquired if required to have no-fault © 2009 The Society of CISR, Inc.

92. Symbol 6 Owned autos required to have uninsured motorists coverage and not able to reject coverage Covers autos owned at inception and newly acquired if required to have uninsured motorists coverage © 2009 The Society of CISR, Inc.

93. Symbol 7 Specifically described autos only Can be used for all coverages Includes liability for non-owned trailer attached to a scheduled auto Potential problem with newly acquired! © 2009 The Society of CISR, Inc.

94. Symbol 8 Hired autos Can be used for liability and physical damage Does not include auto leased, hired, rented or borrowed from employees, partners or members, or members of their households © 2009 The Society of CISR, Inc.

95. Symbol 9 Non-owned autos Liability only Autos the named insured does not own, lease, hire, rent or borrow & used in connection with your business. Includes autos owned by named insured’s employees, partners, members or any members of their households. © 2009 The Society of CISR, Inc.

96. Symbol 19 Mobile equipment subject to compulsory or financial responsibility laws © 2009 The Society of CISR, Inc.

97. Covered Auto Designation Symbol CA 99 54 Use to customized coverage Examples of use –Mopeds, Motorcycles, or Motor Homes –Isolate a Specific Type of Vehicle for Coverage: “All Owned Vehicles With a Model Year of 2005 or Newer” © 2009 The Society of CISR, Inc.

99. Newly Acquired Symbol 1, 2, 3, 4, 5, 6, or 19 Newly acquired autos of the same described type automatically have that coverage for the remainder of the policy period © 2009 The Society of CISR, Inc.

100. Newly Acquired Symbol 7 Coverage for Newly Acquired Only If: –The company insures all owned autos for that specific coverage; Or –It is a replacement unit and the auto it replaced had that coverage –And it is reported to the insurance company within 30 days © 2009 The Society of CISR, Inc.

101. Certain Trailers, Mobile Equipment, and Temporary Substitute Autos Liability for Trailers: –Load capacity under 2000 lbs. –Designed for travel on public roads –No automatic physical damage © 2009 The Society of CISR, Inc.

102. Certain Trailers, Mobile Equipment, and Temporary Substitute Autos Liability for Mobile Equipment: –Carried or towed by covered auto –Not covered if moving under its own power (covered under CGL) © 2009 The Society of CISR, Inc.

103. Certain Trailers, Mobile Equipment, and Temporary Substitute Autos Liability for Temporary Substitute Autos –Any non-owned auto used with permission of owner –As a temporary substitute of a covered auto you own –Because your covered auto is out of commission due to: breakdown, repair, service, loss or destruction © 2009 The Society of CISR, Inc.

104. Liability Coverages Insuring Agreement –Legal obligations –Bodily injury and property damage –Including covered pollution expenses –Company’s choice to defend or settle –No duty to defend if there is no coverage © 2009 The Society of CISR, Inc.

105. Liability Coverages Supplementary Payments –Defense costs –$2,000 bail bonds required as result of an accident –Attachment bonds –Reasonable expenses incurred at request of carrier ($250 day) –Tax costs from defended suit –Post judgment interest (not pre judgment) © 2009 The Society of CISR, Inc.

106. Liability Coverages Out-of-State Coverage –If covered auto is driven in a state that requires higher liability limits or additional benefits, the policy will automatically provide these coverages – © 2009 The Society of CISR, Inc.

107. Liability Exclusions Expected or Intended Injury Contractual other than an Insured Contract Workers Compensation, Disability Benefits, Unemployment Compensation Law or Similar Law Employee Indemnification or Employer’s Liability © 2009 The Society of CISR, Inc.

108. Liability Exclusions Care, Custody or Control –Property damage to property owned by the insured –Property damage to property transported by the insured –Property damage to property in the care, custody or control of the insured © 2009 The Society of CISR, Inc.

109. Liability Exclusions Handling of Property –Before it is being loaded onto a covered auto –After it has been finally delivered –There IS coverage in between © 2009 The Society of CISR, Inc.

110. Liability Exclusions Movement of Property by Mechanical Device –Unless the mechanical device is a hand truck; or –The mechanical device is attached to the covered auto © 2009 The Society of CISR, Inc.

111. Liability Exclusions Operations of Mobile Equipment –Does cover, however, the movement over the road or the locomotion. Completed Operations –Covered CGL © 2009 The Society of CISR, Inc.

112. Liability Exclusions Pollution –Will Cover Pollution that comes from the part of the auto part designed to hold it and it is necessary for the operation of the vehicle; OR The pollutant is not cargo AND it is released from an accident from a covered auto AND it occurs away from a premise owned or rented to an insured. © 2009 The Society of CISR, Inc.

113. Liability Exclusions War –Exclusion only applies to liability assumed in a contract or agreement Racing © 2009 The Society of CISR, Inc.

114. Physical Damage Coverage is granted (or not granted) by the Symbol indicated on the declarations Pays for loss to covered auto Caused by: –Comprehensive –Specified Perils –Collision © 2009 The Society of CISR, Inc.

115. Physical Damage Comprehensive –Any cause except collision with another object or upset –Includes glass breakage –Includes loss by hitting animal or bird –Includes loss by falling object or missile © 2009 The Society of CISR, Inc.

116. Physical Damage Specified Perils –Fire, lightning or explosion –Theft –Windstorm, hail or earthquake –Flood –Mischief or vandalism –Sinking, burning, collision or derailment of any conveyance transporting the covered auto © 2009 The Society of CISR, Inc.

117. Physical Damage Collision –With another object –Overturn of covered auto Towing –Only for private passenger type auto © 2009 The Society of CISR, Inc.

118. Physical Damage Coverage Extensions –Transportation Expense Private passenger auto type Resulting from total theft 48-hour waiting period $20 per day/$600 maximum © 2009 The Society of CISR, Inc.

119. Physical Damage Coverage Extensions –Loss of Use Hired/Rented Insured legally responsible Written agreement No driver furnished Covered physical damage loss $20 day/$600 maximum © 2009 The Society of CISR, Inc.

120. Physical Damage Exclusions Nuclear hazard, war, insurrection, rebellion, revolution, etc. Racing –Organized –Practicing or racing or while auto being prepared Wear and tear, freezing, mechanical breakdown, road damage to tires, unless caused by another covered loss. –For example, theft © 2009 The Society of CISR, Inc.

121. Physical Damage Exclusions Equipment excluded –Tapes, records, CDs, visual or data devices –Speed measuring or jamming equipment –Electronic equipment unless designed for the reproduction of sound –Accessories used with electronic equipment –Exceptions to exclusions Diminution in value © 2009 The Society of CISR, Inc.

122. Physical Damage Loss Settlement Smallest of: –ACV –Cost to repair/replace with like kind & quality Depreciation will be applied Excludes betterment Deductible © 2009 The Society of CISR, Inc.

123. Summary of Learning Objectives 1.Identify the exposures covered by the Business Auto Policy 2.Determine who is and who is not an insured in the Business Auto Policy for specific situations 3.Explain specific definitions and policy conditions 4.Identify a covered auto when presented the appropriate symbol information 5.Determine whether a newly acquired auto is covered © 2009 The Society of CISR, Inc.

124. Summary of Learning Objectives 6.Identify what types of vehicles are granted coverage through the Liability Extension 7.Apply the liability exclusions found in the Business Auto Policy 8.Apply the physical damage exclusions found in the Business Auto Policy © 2009 The Society of CISR, Inc.

125. Workers Compensation © 2009 The Society of CISR, Inc.

126. Learning Objectives 1.Describe the legal concepts of the Workers Compensation system 2.Explain the use of the Information Page to activate coverage related to Items 3.A., 3.B., and 3.C. 3.Name and describe four different benefits paid by Workers Compensation 4.Describe the four most common types of Employers Liability claims 5.Describe the uses of Major Workers Compensation and Employer Liability Endorsements © 2009 The Society of CISR, Inc.

127. Concepts of Statutes Elimination of negligence theory in favor of no-fault method of recovery Subject to statutory benefits Benefits are partial and final Employers assume the cost of occupational injuries an diseases arising out of and in the course of employment Exclusive or sole remedy © 2009 The Society of CISR, Inc.

128. Statutory Considerations All states have compulsory Workers Compensation requirements except New Jersey and Texas Funding sources –Insurance companies –Competitive state funds –Monopolistic state funds ND, OH, WA, WY [NOWW] –Self insurance © 2009 The Society of CISR, Inc.

130. Workers Compensation and Employers Liability Policy Information Page –Item 1. Named insured –Item 2. Policy period –Item 3. Coverage triggers 3.A. Workers Compensation 3.B. Employers Liability 3.C. Other States Insurance © 2009 The Society of CISR, Inc.

131. Workers Compensation and Employers Liability Policy Item 3.A. Workers Compensation –Include ALL states where the insured has KNOWN operations or EXPECTS to have operations –Activates Workers Compensation laws for those states listed –Cannot list monopolistic states © 2009 The Society of CISR, Inc.

132. Workers Compensation Benefits Medical: Usually unlimited Disability: Lost wages, waiting period and compensation for scheduled injuries Rehabilitation: Physical & vocational training Death Benefit: Payable to dependent © 2009 The Society of CISR, Inc.

133. Employers Liability Item 3.B. Employers Liability –Applies to all states listed on Information Page in 3.A. –Limits can be increased from minimum limits Bodily Injury by Accident$100,000 Each Accident Bodily Injury by Disease $500,000 Each Limit Bodily Injury by Disease $100,000 Each Employee © 2009 The Society of CISR, Inc.

134. Types of Claims –Third Party Claim (Action Over) –Care and Loss of Services –Consequential Bodily Injury –Dual Capacity Claims Employers Liability © 2009 The Society of CISR, Inc.

135. Twelve Exclusions Defense Costs in Addition to Limits of Liability No Coverage, No Defense Employers Liability © 2009 The Society of CISR, Inc.

136. Suggested Wording Item 3.C. Other States Insurance All states, U.S. Territories, and Possessions except North Dakota, Ohio, Washington and Wyoming, Puerto Rico, the U.S. Virgin Islands, and states designated in Item 3.A. of this Information Page. © 2009 The Society of CISR, Inc.

137. Applies Only to States Listed Must Begin Work AFTER Effective Date “At Once” Notification 30 Days to Notify After Renewal Item 3.C. Other States Insurance © 2009 The Society of CISR, Inc.

138. Longshore and Harbor Workers Act –Maritime employments in and around navigable waters of the United States –Land-based jobs such as longshore, harbor workers, shipbuilders, ship repairers, etc. Federal Endorsements © 2009 The Society of CISR, Inc.

139. Maritime Coverage Endorsement –Masters or crews of vessels –American crewmembers on American ships –Based on negligence Federal Endorsements © 2009 The Society of CISR, Inc.

140. Outer Continental Shelf Land Act Coverage Endorsement –Extends Longshore and Harbor Workers Coverage to oil & gas rigs on outer continental shelf –Limit is 10 miles for Texas; 3 miles for all other states Federal Endorsements © 2009 The Society of CISR, Inc.

141. Foreign Coverage Endorsement –Employees hired in U.S. –Traveling or temporarily outside U.S. (90 days) –Includes endemic disease –Includes excess repatriation Other Endorsements © 2009 The Society of CISR, Inc.

142. Employers Liability Coverage Endorsement –Provides Employers Liability in Monopolistic States –Coverage can also be added to the CGL with a Stop Gap Endorsement Other Endorsements © 2009 The Society of CISR, Inc.

143. Sole Proprietors, Partners, Officers and Others Coverage Endorsement –When allowed by statute Other Endorsements © 2009 The Society of CISR, Inc.

144. Summary of Learning Objectives 1.Describe the legal concepts of the Workers Compensation system 2.Explain the use of the Information Page to activate coverage related to Items 3.A., 3.B., and 3.C. 3.Name and describe four different benefits paid by Workers Compensation 4.Describe the four most common types of Employers Liability claims 5.Describe the uses of Major Workers Compensation and Employer Liability Endorsements © 2009 The Society of CISR, Inc.

145. Thank you! Please Complete Your Evaluation Form www.TheNationalAlliance.com © 2009 The Society of CISR, Inc.