When it comes to Business Insurance, every policy has policy conditions. Below are the Common Policy Conditions of the Commercial Package Policy (CPP). The common policy conditions address cancellation of the policy, changes in the policy, examination of the insured's books and records, inspections and surveys, premiums, and transfer of the insured's rights and duties under the policy.
The insured may cancel the policy at any time by mailing or delivering written notice of cancellation to the insurance company. If two or more insured's are listed in the declarations, only the one listed first (first named insured) can give notice of cancellation.
The Common Policy Conditions include a clause relative to making changes to the policy. It states that the policy constitutes the entire contract between the two parties. It can only be changed by written endorsement issued by the insurance company. Such changes may be made with the insurance company's consent, upon request of the first named insured.
Examination of Books and Records
The insurance company reserves the right to examine and audit the insured's books and records relative to the policy at any time during the policy period and for up to three years after the termination of the policy. This provision is included because many commercial property and liability coverages are issued with estimated premiums. The final premium is actually determined after the policy expires based on reported values from the insured by the audit called the Premium Audit.
Inspections and Surveys
This provision gives the insurance company the right to inspect the insured's premises and operations at any reasonable time during the policy period. These inspections are important in determining the proper insurability of the insured's property and operations. The insurance company may inform the insured of the results of the inspection and may recommend changes. However, they do not have the duty or obligation to do either.
The insured named first in the declarations (first named insured) is responsible for the payment of premium under the policy. Also, any return premium under the policy will be paid to the first named insured by the insurer.
Transfers of Rights and Duties Under the Policy
The insured cannot transfer any rights or duties under the policy to any other person or organization without written consent of the insurance company. For example, if the insured sells a business or property, or both, the policy cannot be transferred to the new owner without written consent of the insurance company.
If you have any questions about these Common Policy Conditions or need assistance finding them in your policy, please feel free to contact me. Also, if you have questions about anything else pertaining to Business Insurance, as always, I'm happy to help.
Commercial Insurance Agent
What do you do when you have the perfect insurance company to match your needs, but not the perfect Business Insurance agent? Or maybe you’re not sure about your insurance company and not happy with your agent? This comes up a lot in the Insurance world, so what is the solution? An Agent of Record (AOR) or a Broker of Record (BOR). It’s a form that you, and your future agent, fill out and submit to the insurance company. Below are some things to consider when considering an Agent of Record for your Business Insurance and the process to have it completed.
Insurance companies typically will not accept an Agent or Record mid-term. Meaning, they must be submitted to the company near your renewal/expiring date. In most cases, no earlier than 90 days and not after the renewal/expiring. Each insurance company is different and may require different information. Most will require the form is done on company letterhead, though.
Once filled out and submitted, the insurance company is going to notify your current agent that you’re essentially requesting a new agent. For an example of what an Agent of Record Form looks like, please see below. They will typically give the other agent (your current agent) an opportunity to contact you to make sure this is what you want to do. It’s called a rescinding period, which is usually 5 days. During this time period, you might get a call from your agent asking you what they did wrong and beg you not to leave them. This might sound funny, but at this point, are you prepared to divorce your agent because that is what you’re doing.
Once completed, your new agent will have full visibility of the policy. This is a great time to do a policy review and is a great way to get to know your new agent and get their recommendations. I suggest getting together over coffee or lunch and sitting down together. Maybe the current policy isn’t right for you, or maybe things have changed since the inception of the policy. Policy reviews after the AOR can uncover things like, lack of property coverage, wrong locations and even businesses that have been classified wrong.
The Agent of Record process doesn’t happen overnight, so you will need to have patience. Insurance companies may have rescinding periods of 5-7 business days. Then it can take several days for the agent to get full visibility of your policy. If you’re not happy with your current agent, and not happy with your insurance company, I still recommend going the Agent of Record route. This will allow your new agent to do a side by side comparison. Maybe there's nothing wrong with the insurance company and the policy fits your current needs. I’ve had cases where the insured thought they didn’t like the insurance company, but it turned out the agent had extremely poor communication skills. For example, an insurance company conducted an audit and found the insured wasn’t classified correctly. They re-classed, which caused a re-write. It turned into a billing nightmare and lots of confusion. All the while, the agent never communicated any of this to the insured.
If you have any questions about the Agent of Record process, or have Business Insurance questions, please let me know, I work with a lot of businesses in the Austin, Cedar Park and Round Rock area. I'd love to meet you for coffee or tea and hear about your business. As always, thank you for taking the time to visit the site.
Commercial Insurance Agent
Engineers have a lot to contend with when it comes to Business Insurance and claims. The reality is, no business or person is perfect, so accidents do happen, and given the litigious society we live in today, claims come with those unforeseen accidents. It's important to have the right policy in place for coverage, but it's also good to have a plan in place to reduce insurance claims. Once you have a contract in place, here are 3 Ways Engineers can Reduce Insurance Claims.
1. Quality Control: Another set of eyes on your work.
Some people do not like to have others check their work, however, it can go a long way when you do. After all, we are all humans, and none of us are immune to human error. Engineers are under a tremendous amount of pressure these days when it comes to projects. Have a senior person, or qualified person, within your organization check your work. If that is not possible, consider the services of a qualified consultant. Yes, this might be an additional cost to the project that could cut into profits or add more time, but it's better to be safe than sorry. Two sets of eyes are better one.
2. Communicate. Keep the lines of communication open and manage expectations.
The last study I read, communication was the number one reason for engineering claims in the industry. This isn't surprising since another study showed the number one thing clients want from design professionals and engineers is, you guessed it, better communication. Review and manage the scope or work, schedule of work and the cost of work with your client. Find out the clients preferred form of communication and secondary form of communication. If there are problems, respond proactively and promptly. Make sure to return phone calls within 24 hours (obviously earlier the better), even if it's just to say you are still working on it. Let them know they haven't been forgotten by simply telling them, I haven't forgotten about you. I know when people tell me this, I appreciate it. Nobody likes to feel like they've been forgotten.
3. Document. Document. Document.
We've all heard this one before, but it's always a good reminder. Always document when you've presented or discussed the scope, schedule, cost and/or any other important information. Things change, make sure to document them. It's easy to forget phone conversations these days when we're taking a call while driving or multitasking. Request an email for any changes. Always consider what is really being asked and do not give an off the cuff answer. If they are major changes to the project, request a meeting. After the meeting, send a follow up email titled "Action Items" with documentation of the change in scope of work and ask the client to confirm receipt of the email.
These are just a few things that might help reduce insurance claims. If you would like more information on ways to reduce claims, please let me know. Be aware that contractors will most likely go after the design professional if they are brought into any kind of law suit, so it's very important to try to reduce your exposure. We represent insurance carriers that offer training on this subject, and other value-added services, your firm will benefit from. Some of these services include webinars and contract review. If you are not getting this from your current carrier, you should ask your agent or broker why. We work with a lot of engineers when it comes to Business Insurance and would be happy to help with your needs. Be sure to read Insurance for Engineers for more information related to this subject.
Always remember, failing to plan is planning to fail. And hope is not a plan.
Commercial Insurance Agent