S. Jay Siegall
SUN Realty USA
Coverage for liability exposure resulting from the activities of a business; includes: direct liability acts of the business resulting in damage or destruction of another party's property or bodily injury to that party; contingent liability although the business may not have direct liability, it may incur a secondary or contingent liability, for example through the employment of an independent contractor; medical payments to others insurance acts of the business resulting in injury to another party, with the insurance company paying the medical expenses to that party (up to the policy limits) without regard to legal liability of the insured business. The policy has three principal sections:
- DECLARATIONS SECTION lists the insured, policy limits, premium, time period of coverage, kind of policy, and endorsements, if any.
- INSURING AGREEMENTS states that if any of the insured perils result in damage or destruction of another party's property or injury to that party, the company will pay (up to the limits of the policy) sums which the business becomes legally obligated to pay. Time Period of the Loss policy can be written either on a claims occurrence basis or a claims made basis; BODILY INJURY damage or destruction of a body to include sickness, disease, and/or resulting death (most liability insurance policies provide coverage for this definition); PERSONAL INJURY defamation of character, libel and slander, false arrest, malicious prosecution, and invasion of privacy (many liability policies can be endorsed to provide these coverages); Property Damages damage or destruction of real and personal property and the loss of use of this property; DEFENSE COSTS costs of defending the insured business to include investigation, defense, and the settlement of claims that are paid in addition to the limits of coverage under the policy; and Policy Limits the maximum that the insurance company is obligated to pay on behalf of the insured business.
- EXCLUSIONS to avoid duplications of coverage in other policies and/or to eliminate certain kinds of coverage, including: property under the care, custody and control of the insured business; liability arising out of contractual obligations between the insured business and another party; liability associated with recall of the insured business's products; liability associated with the insured business's pollution and contamination exposure; and liability that may arise out of conflict with state liquor regulations.
- Conditions stipulate that (a) the insured, after an accident, must behave so as not to increase the severity of bodily injury and/or property damage that has just occurred; the insurance company has the right to inspect the insured business's premises as well as its operations; and if there is more than one policy covering a claim, each policy will pay an equal share of the loss.