A van driver is tasked with picking up an order of apples from an orchard. This process requires the orchard manager to load the apples into a trailer that he has rented for this purpose. During loading, the rented trailer is damaged by the orchard manager who crushes it into the truck. The orchard manager`s liability insurance may refuse coverage because the trailer was damaged while in the care, custody or control of the orchard manager. Contractual Liability InsuranceRisk Management Liability Insurance Aside from my reading of the policy, there is coverage in the event that the insured is held legally liable, other than contractually up to a maximum of $250,000 for the rental of equipment other than motor vehicles. I do not know if the aircraft would be called a motor vehicle from what was provided to me. Most experts agree that business owners tend to significantly underestimate their vulnerability to theft by their own employees. According to the Association of Certified Fraud Examiners (ACFE), the average company loses 6% of its total annual revenue due to employee fraud. ACFE says small businesses, especially those with fewer than 500 employees, are the most vulnerable to these losses. Virtually all businesses with employees are at risk of suffering losses caused by employee dishonesty. As with other causes of loss, effective loss control measures can go a long way toward reducing this risk of loss.
There was an exclusion for property damage “that does not belong to you, but is under your physical and legal control.” And there are policies that include several different coverages in one “package.” The majority of small business owners find it more convenient and economical to purchase a comprehensive policy that offers protection against many types of losses in a single policy. Insurers can create their own insurance policies. Many rely in part on an ISO package policy format. This policy is commonly referred to as the Business Owners Policy (BOP) in the insurance industry. The balance of payments is regularly revised. The analysis is based on the provisions of the 2004 Balance of Payments Revision. Potential business interruption – This coverage, which may also be referred to as “dependent real estate business income” or “contingent business income,” applies if your business depends on another activity and the other business is unable to carry out its normal activities because it has been damaged by a cause of damage, which is covered by your policy. If you suffer damage as a result of such damage on the premises of a business on which you are dependent (“dependent property”), the insurer will assume the actual loss of business income you have suffered.
For example, you have designed a new type of folding beach chair and you have many orders to ship it in time for the summer sales season. Their chairs are made at the Contract Furniture Factory (SBB). Due to fire damage, SBB is unable to manufacture your chairs. If neither you nor SBB have a backup manufacturer capable of fulfilling the contract, you will lose revenue on orders that you cannot ship. Your insurer will pay for the net loss of income you incur as a result. However, if the damage caused to SBB is due to an earthquake and you do not have earthquake insurance, this cover does not apply because the damage to dependent property is not due to a covered cause of damage. For example, if you are a mechanic and you are repairing a $400,000 2012 Ferrari 458, it may be best to discuss with your broker to get an increase in coverage for goods under physical or legal control. The insurer agreed to compensation of up to $100,000 as part of the additional benefit. However, this limit was much lower than the amount claimed.
In an attempt to bypass the lower boundary, the Penfolds argued that the ties were not under their physical and legal control, even though the ties were stored on their property. The Penfolds said they never moved or controlled the ties. The sleepers were stored free of charge on the farm and allegedly on the basis of a “simple license”. Did the Penfolds have “control” over the railroad ties? The policy covered the legal liability to pay damages for property damage caused by a farm-related event. If your business rents or rents its premises, your lease should describe your insurance obligations. If you are the only tenant, you may be responsible for the insurance of the building. You may be responsible for continuing to pay rent even if the building is destroyed. If a fire destroys the building, is the landlord or tenant responsible for removing the debris? You may want to review your rental agreement with your insurance agent to make sure your property insurance covers your obligations. Repairman hired to repair a boom attached to an excavator (Gray Brothers Engineering Ltd v. The New Zealand Insurance Co Ltd). The excavator was damaged during repair work.
There was an exclusion for property damage that was in the custody or control of the insured. The insured was not allowed to move the shovel, structurally modify it or make decisions about his future. It was found that the repairman controlled only part of the boom. He had no control over the other parts of the excavator. The exclusion was omitted. We typically cover many of the most common types of real estate coverage here. You can get complete information about your policy by reading the policy yourself and discussing your coverage needs with your insurance agent or company. Burglary means the removal of property from inside the premises described by a person who enters the premises illegally, as evidenced by traces of forced entry or exit. Robbery means illegally taking property from a person who has the property in their custody and custody.
Fungi, rots and bacteria – Your BOP insurer generally limits the situations in which they pay for losses or damages caused by fungi, wet or dry rot or bacteria. Generally, the insurer will only pay up to $15,000 if the underlying cause of the damage is a specific cause of damage that is not a fire or lightning that occurs during the insurance period, and only if you have used all reasonable means to preserve and protect the property from further damage at the time and after that event. The BOP includes all the buildings that the company owns and a large part of the property necessary for the operation of the business. In interpreting the policy exclusion clause, account must be taken of the position often expressed by the High Court that the meaning of the terms of a commercial contract (of which an insurance contract is an example) must be determined by what a reasonable contractor would have understood by those terms. The sleepers were clearly under the “physical and lawful control” of the accused in the ordinary and reasonable sense of that sentence, and the exclusion therefore applied. However, in this case, it is very likely that at the time of renting the trailer, the orchard manager would have taken out insurance for the trailer provided by the owner. While care, custody, or control exclusions remove property coverage, other insurance options offer protection, such as road freight insurance or garage insurance. Earthquake and volcano coverage – You can add this confirmation to your BOP to protect your company`s assets from losses due to these hazards. For this coverage, a different method of calculating deductibles may apply as a percentage of coverage and not as a lump sum. This case is an important reminder that when drafting or interpreting insurance policies, the usual commercial meaning of words and phrases such as “physical and legal control” must be taken into account. Food contamination – If you work in a food business, there is always a risk that the food you sell could cause food poisoning or transmit a communicable disease from an employee of your company.
This risk can, of course, be reduced and controlled by a good risk management plan, but it can never be completely eliminated. Your business may be one of many that experience seasonal fluctuations in the value of inventory, raw materials, and other items. A total loss in mid-summer, if you sell ice cream, or during the winter holiday season, if you have a retail business, can be several times greater than the rest of the year. To protect you against a loss during peak season, the BOP provides an automatic 25% increase in the limit of your private business property insurance policy. Seasonal indexation only applies if you insured your personal property at least 100% of your average monthly value, either in the 12 months preceding the loss or during the period you were in business at the time of the loss, whichever is lower. If your main business premises are destroyed, as well as a large part of the property you were operating, this loss, while devastating, may represent only part of the total. You should consider purchasing business income and utility insurance (also known as business interruption insurance). The basic BOP excludes certain types of real estate from its coverage. For many of these items, such as money and securities or outdoor signs, insurance is available in addition to the balance of payments for an additional premium. However, for items such as motor vehicles or boats, you will need to purchase a separate policy.
Excluded properties typically include: the insured must either include the items in the property section that show the tenant for their respective rights and interests, or purchase coverage from the owning company.