coverage checklist

Commercial and personal insurance programs differ greatly among policies. Following is a checklist of key issues to consider in one area - commercial liability insurance. Please contact us for checklists on other coverage areas including property insurance, automobile insurance, umbrella policies, directors and officers' liability, employment practices liability and fiduciary liability policies.

• Is there a waiver of subrogation in any lease for real property? The typical liability policy only provides $50,000 in coverage and only insures for fires. Water damage, vehicle damage and many other perils can damage a building and subject the lessee to liability. These perils are typically not automatically covered.

• Is there an absolute pollution exclusion on the liability policy? At a minimum, require that the liability policy cover fumes from smoke from a fire or from cracked heat exchangers. Consider a separate pollution legal liability policy if there are other exposures.

• Have you considered insuring employment practices such as wrongful discharge, sexual harassment, failure to promote, failure to hire, etc.? These types of claims are not covered under standard liability policies and a special employment practices legal liability policy is available.

• Have you considered officers and directors liability to cover lawsuits against directors and officers personally?

• Is there an employment practices exclusion on the liability policy which bars coverage for consequential damages? This could be a problem in the event of workplace violence claims.

• Is there a liquor liability exclusion that bars coverage where any charge is made?

• Does your liability policy include an endorsement adding employee benefits legal liability coverage to insure against mistakes in the administration of employee benefit plans and COBRA requirements?

• Is there a 26 foot limitation for non-owned watercraft? Salespeople and officers often entertain on personal watercraft or can charter them for business-related events imposing liability upon the business owner. Such liability is not usually covered if a watercraft is 26 feet or longer.

• Is there a contractual liability exclusion on liability policies? Indemnity agreements that are entered into by almost all insureds agree to hold other entities harmless from many types of claims.

• Has your contractual liability coverage been expanded to include personal injury, not only just bodily injury and property damage? Contractual liability on most policies is limited to bodily injury or property damage.

• Have you required that subcontractors enter into agreements requiring that they hold you harmless from any claims arising out of their workers on your premises? This will require that they assume the defense and any liability arising out of such injuries. Cambridge Underwriters can provide you with a suggested form.

• Is the broad form notice of occurrence endorsement or similar language included on your liability policy?

• Are punitive/exemplary damages excluded?

• Is non-employment related discrimination covered?

• Is third party harassment covered?

• What are your limits of liability? Do you have an umbrella?

• Is hired and non-owned automobile liability covered to protect your company for claims of employees driving on company time?

• Do you have professional liability coverage for claims of professional errors or omissions?

• Do you need coverage for intellectual property liability for claims of violation of copyright, trademark or patent?

• Who are the named insureds on your liability policy? Have you listed all corporations, partnerships (including past partnerships), LLC's, and individuals?