Regarding liability coverage: bodily injury and property damage coverage does not apply to a known possible loss prior to the policy inception date. In order to qualify for coverage, an “accident” has to occur in the “coverage territory” and the “bodily injury” and “property damage” must occur during the policy period. Regarding Auto Liability, most common coverages for covered autos are Symbol 21 “any auto” for dealerships, and for all other acceptable operations are designated Symbol 30 – ‘Autos’ left with you for service, repair, storage, or safekeeping.

Garagekeepers coverage is needed to cover loss or damage to customers’ cars. The coverage may be provided on a legal liability basis or without regard to legal liability. It may be offered as direct coverage that is excess over insurance carried by customers or as direct coverage on a primary basis. You would want to specify to your broker which of the two you want quoted.

This coverage is important to any association that offers valet parking or attended parking of any kind. While general liability does provide some coverage, as soon as the vehicle leaves the premises, general liability ceases and if there is no coverage unless garagekeepers is added to your package.

What Type of Business Should Purchase Garage Liability?

The businesses that should purchase this coverage are:

• Gas Stations
• Used Car Dealers
• Auto Repair and Body Shops
• Car Washes
• Parking and Valet Lots
• Mobile Auto Repair or Detailers
• Tire Dealers
• Used Motorcycle, Large Truck, and RV Sales and Service
• Driveaway Contractors

And more.

The form provides protection suited to any operation that, for a fee, accepts the care, custody or control of vehicles belonging to third parties. Even if you don’t drive your customer’s vehicle, if it is in your care even for an hour while replacing a windshield or repairing a ding, you would not be properly covered without garagekeepers coverage. It is necessary because both the General Liability policy and the Auto liability policy excludes coverage for automobiles and exposures involving the care, custody and control of another’s property.

Having explained the basics of Garage Liability and Garagekeepers coverage, rates are based on several factors:

• Type of operation
• Number of employees and/or employee payroll
• Territory area
• Acceptable motor vehicle reports on all drivers
• Safety, condition, and security of premises
• Limits requested

Feel free to contact me with further questions. We have many markets available with fast quote turn-around, however, depending on your business type, some carriers may be a better fit for you than others and all carriers have their own specific application. I’m happy to send you an application or two if you email me at mluckner@orrandassociates.com, or feel free to call 877-257-1652.

With regard to general liability policies, taking precautions before an accident can help keep your liability and your insurance rates down. All businesses can take certain steps to lower the chance of a liability insurance claim:

• Set a high standard for product and/or completed operations quality control.
• Make sure all company records are complete and up to date.
• Be sure employees are properly trained and hold regular safety meetings.
• Get safety tips for your type of business from your insurance company.

What factors determine the insurance premiums I pay?

How insurance companies determine premiums is a complicated process that involves many factors – risk, actuarial and losses/claims data for the type of operation, type of insurance, etc. While insurance companies try to be competitive with other companies, each makes decisions based on their own data and experience insuring businesses of similar risk, statistical information on the field of business, and business objectives.

Insurance companies maintain staffs of trained experts, called underwriters, whose primary job is to evaluate the amount of risk the company will assume by issuing an insurance policy for a particular business. If one particular company has experienced a higher rate of loss on a particular field of work, its premiums will likely be higher than another company whose loss ratio is lower.

• Perceived risk. Business owners should first consider the amount of risk associated with their business. For example, a home builder is at a greater risk of being sued for a defect on their completed operation, than a company who does interior painting and wallpapering, and would therefore pay a higher rate for liability insurance. Misrepresenting your business operations to an insurance company is considered insurance fraud so it is important to be up front when describing your business to your insurance broker.
• The state and zip code in which you operate. Businesses that operate in states like California, which has a history of a higher quantity of lawsuits filed, and awarding high damage amounts to plaintiffs typically need to carry liability insurance with higher coverage limits.

How do I know if the premiums I pay are not too high?

Keep in mind that premiums are not the only factors to consider when buying insurance. Similar coverage from several companies will, in all likelihood, vary because of the factors mentioned above and exclusions that may be applied to a policy. You’ve paid too much if your policy excludes coverages that you might need. For example, if you’re an exterior painter, and you use a sprayer every day, it is advised that you buy a policy that does not exclude overspray coverage (a common exclusion on many construction policies). When comparing insurance policies and premiums, it is almost impossible to make a true “apples to apples” comparison because of the many variables that go into making a particular policy. For instance general liability rates for an interior painter with no employees in Los Angeles can vary from $1000 including taxes and fees to $1600 including taxes and fees depending on the breadth of coverage, size and financial stability of the insurance company, and the exclusions that may be added to some of the policies. For these reasons, shopping for insurance based on price alone can be very risky. While one company’s premiums may be lower, the policy may not contain all the features and coverages you want or need. Once again, the assistance and advice offered by a licensed insurance broker can be quite valuable.

Should I pick different companies and agencies for each kind of insurance?

The answer to this question is related to several of the questions above. Depending on your field of work, your choices may be more limited, working with a broker like myself, who represents a variety of companies and lines of insurance, will likely offer more options and allow you to keep all lines of commercial insurance with one agency.

Do I Need Professional Liability if I Just Freelance Occassionally?

Well, this is a loaded question. Of course the answer is that if you do ANY web design work whether you’re a free lancer (independent contractor), a very small company, or a company with many employees….YES you need Professional Liability. The need for the coverages isn’t dependent on the amount of design work you do, it’s based on the fact that you do it for pay, period. It only takes one claim to financially ruin a company or an individual. Remember, if you do design work as an independent contractor (individual proprietor), your personal finances and assets are at risk in the event of a claim.

Do I Need General Liability or a Small Business Liability Package Too?

If you work from home, and you NEVER meet personally with clients (either at their place of business or your home office), you may be fine going without general liability. Most general liability policies for consultants or web design professionals exclude products and completed operations that would be covered on the Professional Liability policy so it is pared down to the potential claims relating to bodily injury and property damage while performing a job. This can be a bodily injury accident caused by a trip over a laptop cord while giving a presentation at your client’s premises, as well as a trip on the front porch as they enter your premises, so if there are person to person client interactions it is advised that General Liability insurance be carried. It is inexpensive in comparison to the Professional Liability because of course carriers know that the risk of a claim in the bodily injury/property damage category is very low. Your risk lies almost entirely on the professional liability coverage side.  As a side note, the small business liability packages combine property coverage (such as your office equipment) with General Liability along with potential other coverages such as Hired/non-owned auto coverage if you have employees that use their vehicles to travel to client’s premises on business etc. Ask for a package if you have employees and/or a substantial amount of business equipment to cover.

Do I Need Workers Compensation?

For Web Designers, as well as related businesses, this raises a whole new issue of whether your employee is a true direct employee or whether they are an independent contractor. Even if you pay your web designers as independent contractors (as 1099′d employees), your designers could still be considered employees under state law depending on whether they meet certain criteria, and California State law requires you carry Workers Compensation Insurance if you have employees.  Workers Comp coverage for web designers is fairly low, and as with all workers comp, is tied directly to your annual payroll costs. Workers compensation and employers liability insurance in California are combined together so you wouldn’t need to apply for separate policies as employers do in other states.

Of course, as an insurance broker, I do not provide legal advice, only a lawyer can provide you the actual legal advice that you may be seeking, however, the following check list applies to any Independent Contractor vs Employee situation and can be found at the Calif Dept of Industrial Relations website http://www.dir.ca.gov/dlse/FAQ_IndependentContractor.html

• Whether the person performing services is engaged in an occupation or business distinct from that of the principal; (do they work for other employers, or just you?)
• Whether or not the work is a part of the regular business of the principal or alleged employer;
• Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
• The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
• Whether the service rendered requires a special skill;
• The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
• The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
• The length of time for which the services are to be performed; (ongoing versus occasional work)
• The degree of permanence of the working relationship;
• The method of payment, whether by time or by the job; and
• Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.

I hope that the above questions asked by others, may also be helpful in answering your questions as well. Should you have further questions, or wish to request a quote on any of the above coverages, contact me directly at 877-257-1652 or mluckner@orrandassociates.com and I’ll work with you to get the coverages you need.

• Estheticians
• Architects
• Engineers
• Property Managers
• Educational Consultants
• Financial Planners
• Internet/Web Designers
• Newspapers & Magazines
• TV & Radio Stations
• Advertising Agencies
• Public Relations Consultants
• Media Buying Agencies
• Graphics Designers
• Publishers & Printers
• Direct Marketing Organizations
• Marketing Consultants

Media and Technology Professional Liability

For the purpose of this post, I’ll concentrate on Media and Technology-related Professional Liability (PL) policies. Media and technology are rapidly changing industries and their insurance policies must continue to improve to meet these needs and protect insureds from third party claims.

What Does Professional Liability Cover

A common exposure media organizations face is a libel/slander claim arising from their content. This is primarily contained in the broadcasts, website content, or articles they run and in advertisements they accept. The typical claim might involve a libel/slander action by a third party, holding the media organization responsible for the libel or slander.

What if a client is not happy with the result of a service provided to them and brings a claim to obtain a different result or avoid paying a fee. These types of claims are often just as difficult and expensive to defend as a clear-cut error. PL Insurance typically pays for the cost of defending this type of claim as if it were a clear-cut error on the part of the insured consultant.

How does a court determine the value of a marred reputation or a stolen idea? Awards can far exceed actual economical damage and often include exemplary damages that can destroy an organization.

Also unique to media liability are unusually high legal expenses: offended plaintiffs tend not to negotiate, prolonging litigation, and defendants often cite their First Amendment right of free speech, refusing to settle.

What Carriers Offer Professional Liability?

Professional liability (PL) insurance for media organizations, often called media liability and sometimes called errors and omissions or E&O insurance is available from a small group of specialty lines insurers. Our agency is appointed directly with several carriers and we have access to many others through wholesale brokerages. We have yet to find a type of company that we were unable to provide a competitive quote for.

What Determines My Rate?

Coverage and pricing varies greatly depending upon the type of professional operation, the specific services provided and its size, experience of the principals in the firm, and location. Carriers may specifically tailor their programs for certain types of media organizations in order to protect their insureds from unique claims arising from their specialized services. For example, a website designer may have advertising injury exposure relating to content used in building websites, while a public relations consultant may have a financial exposure in addition to a libel/slander exposure. When you request a quote, be prepared to fill out an application, and provide a resume from all principals in the firm as well as any advertising materials (brochures, websites etc).

Coverage is typically provided on a claims-made basis. Availability of occurrence depends upon both the type of organization and market conditions, but it is rare. Limits and deductibles vary with the size and type of insured. Standard aggregate limits for most small to medium sized organizations start at $1million. Policy forms vary significantly.

New technology and emerging media exposures – especially those arising from newsgathering – have caused carriers to consistently update their coverages in the traditional media liability policy.

You won’t find a form to fill in on this website for Professional Liability due to the variation in coverages depending on your line of work. Call me at 877-257-1652 or request an application via email to mluckner@orrandassociates.com.

Once your policy is endorsed to include an AI, depending on the form, and at times, a court’s interpretation, this coverage will pay for damages that the insured becomes legally obligated to pay due to bodily injury, property damage or personal and advertising injury arising from the insureds operations. There is coverage on and off premises, for the limits provided for in your policy. Endorsements are available to adapt coverage to your needs, AIs for landlords, specific projects, or locations as long as there is a clear relationship between the insured and the entity requesting to be named as additional insured. Carriers may or may not include the language required by your additional insured, so prior to signing a commitment to purchase an insurance policy, it is imperative that if you have specific wording/language requirements, you be sure the policy offers the wording and coverage that suits your needs.

When it is requested that you add a landlord, client or contractor as an “additional insured” , after underwriting approval, your policy is endorsed (changed temporarily) to include the named entity as an insured on YOUR policy in the event of an accident for the duration of the project you are completing for them, or on their premises.  These endorsements do not apply to work performed by uninsured independent contractors or subcontractors, nor does it apply to an insured subcontractor who has not named you as an additional insured on THEIR policy. Some insurers have reinforced their intent to exclude coverage for the AI’s own negligence with language stating just that. For more information see www.irmi.com/online/main-folder-landing-pages/commercial-liability-publications and go to Free Expert Commentary on Additional Insured Issues to get prospective from legal professionals.

Difference between CG 2010 11/85 and Equivalent forms and others:

For years, the additional insured—owners, lessees or contractors—scheduled person or organization endorsement (CG 20 10) has been widely viewed as the preferred additional insured endorsement due to the breadth of coverage it provided. Over time, however, that coverage has been significantly narrowed.  “Additional Insured Endorsements,” in Commercial Liability Insurance. Still, absent the ability to obtain prior editions of the endorsement, CG 20 10 provides the broadest additional insured coverage available to owners, contractors, and lessees under a standard ISO endorsement.

The 2004 edition of CG 20 10 (effective July 1, 2004 in most jurisdictions) provides coverage for claims against the additional insured for liability arising out of the named insured’s “ongoing operations” for the additional insured, provided the covered injury or damage was “caused, in whole or in part, by [the named insured’s] acts or omissions or the acts or omissions of those acting on [the named insured’s] behalf” (emphasis added). The effect of the term “ongoing operations” and the phrase “caused in whole or in part by” is the exclusion of coverage for claims arising out of the named insured’s completed operations and claims arising out of the sole negligence of the additional insured.

Completed Operations. In 1993, ISO replaced the CG 20 10 requirement that liability must arise in connection with “your work” to the current requirement that liability must arise in connection with “your ongoing operations.” This change removed coverage that existed in the original CG 20 10 (11/85 edition) for claims against an additional insured arising out of the named insured contractor’s completed operations for the additional insured. Although this change officially occurred more than a fifteen years ago, the reality of it is more recent. For years, many insurers routinely provided the 11/85 version of the endorsement when requested to do so. The hard market of the early twenty-first century combined with escalating construction defect claims caused this practice to largely cease.

Circling back to the beginning of this post, it is very important before entering into contracts with clients, and before purchasing your General Liability policy (also a contract), to know what is required of you, and by you, with regard to your additional insured endorsements. Budgetary constraints may force a contractor to purchase policies with more restrictive coverage and AI endorsements, but whenever possible it is advised that Contractors purchase the most comprehensive coverage afforded by them. In the end, deciding which policy to purchase on price alone may not provide for a potential client that requires special wording on the AI endorsement. It is also important throughout the year that you understand that your work must fall within your carrier’s guidelines, and that your carrier must approve of the AI endorsement request. Be sure to communicate all potential exposures to  your broker in order to help them find coverage that serves you as a business owner, in addition to satisfying your AI needs.