Delaware Business Insurance Update From CNC Insurance Associates Inc. "Certificates of Insurance Are Not Policies" 5-7-17

Every business owner at one time or another find themselves having to request a certificate of insurance from their agent. This could be to show coverage for adding a new vehicle, equipment, property, or complying with contract terms, etc...
However what most do not know is that a certificate of insurance is not part of the policy. The certificate is just a summary document of what coverage could apply in the actual policies. The certificate itself has bold language on the top of the form stating that the document is issued " as a matter of information only" and "does not amend, extend, or alter" the coverage in the policies.
So why are certificates requested and issued so frequently when they are not part of the actual insurance policies? The main reason is that most people do not understand  nor have the time to review insurance policies to determine if there risks and interests are covered. The certificate of insurance was the creation of the industry. It was to prevent the passing around of insurance policies to avoid people having to read and decipher them for the numerous transactions that require insurance coverage.  Certificates can  cause problems for business owners. Many are issued with the recipient thinking that their interest are covered as they expect .After  a claim however, the actual policy may have terms, conditions, or exclusions that affect the outcome of the claim and how it is paid.
For now the certificate of insurance is the document the industry allows to be used to show insurance coverage. Be aware that it is not a part of the policy and does not actually prove coverage. As always read your policies and talk with your insurance professional to understand the coverage you have and do not have,  for your business. Until next time be careful out there and know your risks.


G. Kevin Nemith President CNC Insurance Associates & The Business Insurance Center
Serving, DE, MD, NJ, PA, & VA
www.cncinsurance.com
www.bizinsurancetv.org

Popular posts from this blog

Delaware Legislature Preparing To Revisit Dram Shop Liability

Here we go again. Representative Peterson is preparing to introduce limited dram shop liability for consideration. The legislation caps the liability at $250,000 but, as is usually the case, this creates a starting point where limits are eventually increased once it's decided by the powers that be that the current limit is too low. This also puts restaurants, bars, etc, at an increased risk due to the vague wording of the legislation, specifically "reckless" sale of alcohol by the business. Also, you can be sure that if this legislation is passed, that rates will go up commensurately for not only Liquor Liability coverage, but if actual damages begin to be paid out under this law, that insurance rates on the whole will see an increase.
Read more

Get employees back to work quickly to keep work comp costs down

Image
In the past I have spoken to clients regarding a particular workers compensation claim affecting them and have asked if they have brought the employee back to work yet. Too many times the answer is no, they have nothing for that employee to do since said employee is not 100% and unable to perform their specific job prior to their workers compensation injury/claim. The problem with this is that too often employers miss the point that even though an employee can't perform in the position they were in prior to their injury, it behooves the employer to create some type of alternative task/job the employee can do until such time they are able to resume their normal duties. Bringing that employee back to work means that work comp benefits /payments in that particular claim are being curtailed, thereby saving the employer potentially more being paid out, while adding to their experience mod and driving their overall work comp expenses up.
Read more

Important to notify insurance company of potential liability claims

Image
When trying to manage their insurance policies, many business owners make the decision not to turn in potential claims and decide to take care of them on their own. By paying for small claims, such as property damage, etc, they strive to keep claim frequency down and in turn keep renewal premiums down. One area of insurance they should not try to manage though is potential liability situations/claims. Most policy conditions require prompt notification of any potential liability claims to the insurance company and if a claim isn't turned in promptly, the policy language does note that the company can deny a claim due to late notification. It's important to do this early on since information/memories are still fresh and it gives the insurance company time to completely investigate the potential claim. The potential for a liability claim is most likely the small business owner's greatest area of risk, whether they operate a restaurant, cleaning service or any other busi
Read more