Coverage Limitations Archives - The Reschini Group

To the Rescue: The Value of Personal Umbrella Coverage

By The Reschini Group

Have you ever been caught outside in a downpour? A real soaker? The kind where the rain is coming down so hard and fast, that a standard-sized umbrella simply isn’t enough to keep you completely dry?

That’s when you wish you had one of those big golf umbrellas, with a wingspan so wide that no amount of rain could get any part of you damp or soggy.

You can think of personal insurance coverage in much the same way.

Most individuals have what they consider to be sufficient coverage against automobile accidents, injuries suffered in the home, and so forth. And that might be accurate in some cases. But too many people never realize the level of liability they could face until it happens, and they discover that their coverage may not extend as far as they need.

They could have used a larger umbrella.

The aptly named Personal Umbrella policy provides the extended coverage the policyholder needs when the first line of insurance gets exhausted, but more exposure remains. Say a policyholder is at fault for a multi-vehicle accident where a fatality has resulted. It will not take long for any baseline coverage to meet its maximum limits – then what? There are more expenses, including medical bills, car repairs or replacements, demands for restitution from the victims, and more.

With adequate Personal Umbrella coverage, those responsibilities could be met without needing to worry. What’s more, Personal Umbrella insurance is generally affordable, when considering the benefit it represents should it be called into service. A relatively small price to pay for a larger umbrella – and peace of mind.

The professionals at The Reschini Group can offer guidance related to Personal Umbrella coverage. Contact us at 724-349-1300 to set up a time to talk.

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Overlap: Understanding Insurance Limits When Renting a Car on Business

By Mike Drew, The Reschini Group

Understanding Insurance Limits when Renting a Car for Business

Your flight had been delayed and you’re running late for an important appointment in a new city. All you want from the car rental stand is to get registered, grab the keys, and follow the GPS to your destination. But what are the rules? Let’s start with the basics – Liability coverage, which protects against bodily injury or property damage to a third-party arising out of the use of a rented vehicle, and Physical Damage, which protects against damage to the rented vehicle.

Liability Coverage – A firm’s liability risk exposure can be protected when renting a vehicle by purchasing Hired & Non-Owned Automobile (HNOA) Liability coverage, which protects the Insured for liability arising out of the use of vehicles within the course of business, which is not owned by the Insured. HNOA would shield the Insured Entity from liability when exposed to employees using their own vehicles on company business (Non-Owned Auto Liability) and employee renting or hiring vehicles (Hired Auto Liability). HNOA Liability coverage is an extremely important coverage to consider if you have employees using their personal vehicles and renting vehicle for business within the U.S.

Physical Damage – Hired Car Physical Damage provides protection against costs associated with damages to a rental car when used within the course of business in the U.S., and helps mitigate a loss suffered against the company should that vehicle be rented under the company’s name. Since most vehicles are typically rented under the employees’ name, it is prudent to have the “Autos Rented by Employees” endorsement added to the policy. If employees are using corporate credit cards or their personal auto coverage to opt-out of the physical damage coverage when renting a vehicle for business, please note that coverage may not be sufficient to cover a total loss, thus exposing your organization to possible out-of-pocket expenses.

Each year, liabilities assumed under rental agreements have expanded to the point where, if the car spends two weeks in a repair shop following an accident, the renter becomes liable for the rental company’s lost revenue. In addition, storage fees may be passed on to the renter and, under some agreements, the renter may be required to pay for “diminution of value,” or the reduction in resale value for a vehicle that has been in an accident. Responsibility for these damages may be avoided by purchasing waivers offered by the car rental company.

To activate coverage, where a credit card used to rent the vehicle pays for the loss if your insurance doesn’t, the cardholder must be the primary renter and must decline the Limited Damage Waiver/Collision Damage Waiver options. Credit card coverage varies, and may change at the credit card company’s discretion. Also, if the renter violates any terms of the rental agreement, credit card coverage is voided. Plus, credit cards may exclude rented SUVs and weather-related damage, like flood and hail.

Don’t let the hard sell push you into a decision that’s not right for your particular situation. The professionals at The Reschini Group can help you sort out the best option for you to select when renting a car. Contact us at 724-349-1300 to set up a time to talk.

The Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Accept the Exceptions: Every Contingency Should Be Covered

By Kitti Peters, The Reschini Group

Make Sure Every Possible Contingency is Covered

You may believe that your insurance coverage is so comprehensive, so all-encompassing, that no matter what set of circumstances may arise, you are properly protected.

This assumption, like most assumptions, probably is not accurate.

For example, in a recent ruling in federal court, a major national insurer will not be required to cover a $2.8 million judgment that an injured worker secured against a tree trimming company. The judge ruled that a policy exclusion for injuries stemming from the use of equipment mounted to a vehicle clearly bars coverage.

A worker at the tree-trimming company suffered injuries after a 63-foot-fall from a boom lift attached to a truck. A commercial automobile liability policy that was issued to the company by the national insurer contained an exclusion for damages “arising out of the operation, maintenance, or use of any equipment” mounted to a vehicle. The tree-trimming company said the incident qualified for coverage nonetheless, arguing that certain terms in the provision were ambiguous, but the judge disagreed, writing that “[T]he court finds that the undisputed facts fall squarely within the exclusion.”

The federal judge remained unswayed by the tree-trimming company’s contentions, concluding that the exclusion applies under the plain meaning of the disputed terms because the worker’s injuries resulted from damage to the boom lift mounted to the company’s truck.

Millions of dollars in damages could have been avoided for the much more reasonable investment into the proper insurance coverage. (The damages themselves probably wouldn’t have been avoided, but they might have been covered with the proper insurance). No contingency can ever be truly excluded from consideration. Even if you think your coverage is adequate, it’s well worth the time and effort to find out for sure – and to see if more needs to be done.

The professionals at The Reschini Group can help you get a comprehensive picture of your insurance profile. Contact us at 724-349-1300 to set up a time to discuss this important topic.

There will always be exceptions. Accept them, and make sure you’re protected in case they occur.

The Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Plugging the Gap: The Need for Drive-Other-Car Coverage

By The Reschini Group

If you take five seconds to think about it, the number of vehicles on the road at any given moment is absolutely staggering. Then think of the various types of drivers, the owners of those vehicles, the accidents that remain an ever-present possibility, and it becomes clear that car insurance is, by necessity, a very complex industry.

Here’s just one unique slice of that complex world. If an employee of a company were provided with a company vehicle – and if that employee does not own a car of his or her own, and subsequently has no personal automobile insurance – then the employer has a real and potential liability exposure, should that vehicle be involved in an accident.

Drive-Other-Car coverage closes that particular gap for employees who do not have their own personal automobile insurance policy, when they are driving a “non-owned” vehicle for personal use. The insured (the company that owns the vehicle) is not at risk; it is actually the employee without automobile insurance who is at risk, and this endorsement provides them with protection. The full technical definition is as follows: Drive Other Car endorsement is a commercial auto endorsement designed to provide non-owned auto coverage under a commercial auto policy similar to that which would be provided under a personal auto policy. A Drive Other Car coverage (broadened coverage for named individuals) endorsement is commonly used when an executive officer, for example, does not carry personal auto insurance because he or she is furnished a company auto. Coverage under the endorsement would come into play in the event the individual designated in the endorsement (including his or her resident spouse) is driving a non-owned auto for personal use. Coverage under the endorsement does not apply if the auto in question is owned by that individual or by any member of his or her household; or the auto is used by either of these individuals while working in a business of selling, servicing, repairing, or parking autos.

The best scenario, of course, is for any employee who may be driving a company-owned vehicle to carry his or her own personal automobile policy. For those who don’t, however, Drive-Other-Car coverage can include coverage of liability, medical payments, uninsured motorist and physical damage.

Be sure about your coverage. The professionals at The Reschini Group are well versed in these questions and how you can be adequately covered in any situation – including the myriad combinations of factors surrounding car insurance. Contact us to learn more.

The idea, after all, is to get behind the wheel without getting behind the 8-ball. And to do that, you need to plug all the gaps.

The Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Liable by Association: Understanding Professional Liability Insurance

By Mike Drew, The Reschini Group

The importance of professional liability protection to reduce financial exposure.

A faulty assumption about insurance coverage related to job duties comes into play when one assumes he or she may be liable only when someone else suffers bodily injury, property damage, or personal injury. The fact is, however, that’s what standard general liability coverage addresses.

If you are a professional – which covers everything from architect to home inspector, from attorney to physician, and from real estate broker to accountant, just to name a few – a special classification of liability insurance is required to handle other types of claims that may come against you, related to giving advice or providing a service that could cause a financial loss to a customer. Membership in professional associations, some of which entitle an individual to list credentials as part of his or her name and identification, also point to the need for this type of coverage.

Errors and omissions, another way to refer to professional liability, is defined as follows: “Errors & omissions in the U.S., is a form of liability insurance that helps protect professional advice- and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder.”

For example, even a web programmer would be wise to have professional liability insurance. How so? Say the programmer delivers a website to a client, but if that platform did not perform properly – getting e-commerce transactions wrong, or not letting visitors to the site navigate to their intended destinations, resulting in lost revenue and a damaged reputation – the client could file a claim against the programmer, based on negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice.

A general liability policy would not be sufficient, since no one got physically hurt and no property had been damaged, so if the professional programmer only had this level of coverage, he or she would face a financial exposure that easily could have been avoided with the right policy.

Be sure about your coverage. The professionals at The Reschini Group are well versed in these questions and how you can be adequately covered in any situation – including the ways in which you apply your professional expertise. Contact us to learn more.

You’ve worked hard to achieve your professional recognition. It’s worth protecting, with the proper level of coverage.

The Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

In the Driver’s Seat: Hired and Non-Owned Auto Coverage

By Mike Drew, The Reschini Group

“Hey, would you mind running these supplies over to the client across town?” asked the supervisor to the employee.

And with that simple question, a series of insurance-driven dominoes began to fall that, before it was all done, taught some valuable lessons in liability coverage and unexpected exposure.

The employee used his own personal car to make the delivery, but struck another car in an intersection on the way, resulting in multiple injuries to a third party. In the months to follow, ambulance bills, medical expenses, surgical costs, lost wages, and a variety of other financial considerations began to accumulate – but what determines who pays for them?

Well, that depends on whether the employer who made the initial request carried Hired and Non-Owned auto coverage. This subset of commercial auto insurance addresses just what it says – it protects an employer should another party come after it for recovery damages involving cases where an employee drives a vehicle not owned by the employer.

Many business people don’t understand the need for this specialized coverage, assuming that the employee’s personal auto insurance would cover damages. While it’s true that a driver’s personal auto coverage may be the first to be tapped, it may not be sufficient to cover the costs of injuries, ongoing medical treatment, pain and suffering, or a fatality.

If the person involved in an accident is driving the vehicle because of an employer, even if the employer does not own the vehicle, the employer will be pursued for damages beyond the employee’s personal auto coverage. Hired and Non-Owned coverage provides the protection needed in such situations.

Be sure about your coverage. The professionals at The Reschini Group are well versed in commercial auto insurance and how you can be adequately protected, based on your business’ specific situation. Contact us to learn more. Because, simply stated, the complex world of commercial auto insurance can’t be simply stated.

The Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Getting Short-Sheeted: Reviewing MSAs for Coverage Gaps

By The Reschini Group

Don't get short-sheeted on your insurance coverage. — Don’t get short-sheeted on your insurance coverage.

Hurrying through the department store, you grab a set of bedsheets on sale, only to get home and realize they’re queen-size sheets and you have a king-size bed. You paid for sheets, all right, but they don’t provide sufficient coverage for your needs.

In like manner, businesses are asked to sign Master Service Agreements when contracting with other businesses. These MSAs delineate the terms under which the two parties will conduct their business, including insurance coverages. The stipulations may be properly in order, or there may be discrepancies and differences that should be addressed.

For this reason, all MSAs should be carefully reviewed by insurance professionals, to prevent either a lack of coverage, or to identify a situation where insurance in excess of actual need may be unnecessarily imposed.

As an example, a subcontractor signs an MSA requiring insurance to be able to work with a general contractor. The MSA includes insurance addendums and attachments. The subcontractor in this instance would be well advised to seek an independent opinion about the terms included in those documents. Which insurance-related items are really needed? Which ones are not applicable to the work to be provided?

Sometimes, the insurance coverage a subcontractor already has in place may be sufficient, saving the added cost of expanded insurance requirements in the proposed MSA.

Hashing out these details makes sense from every angle. Without carrying the proper level of insurance, a subcontractor will not be hired. But without making sure the insurance-related requirements are fair and appropriate, the subcontractor may be caught short or overpay.

Bottom line – bring the MSA and any insurance addendums and attachments to a professional insurance consultant. That way, all parties involved in the business relationship can move forward with confidence. The team at The Reschini Group provides this service, and encourages all of its clients to take full advantage of it.

Because the last thing anyone needs is to get short-sheeted on his or her insurance.

The Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Watch Those Assumptions

Understanding Excess vs. Umbrella Coverage

Umbrella

By Kitti Peters, The Reschini Group

Assumptions can be tricky. You really need to slow down, look at the situation, and make sure you fully understand all the signals before taking action. Otherwise, you could be facing a problem down the road.

Even things that would appear on the surface to be so obvious, so apparent, so unmistakable, can turn out to be the very things that trip you up later.

A great example of the dangers of assuming? Appreciating the difference between “excess” and “umbrella” insurance coverage. They may sound synonymous – and it’s easy to make that mistake, as many people do at first blush – but important differences, in fact, exist.

The danger arises in getting caught with a policy that’s restrictive, meaning you may not have the protection you assumed.

In its most general definition, an “umbrella” policy can extend to coverage that includes general liability, automobile, and employees – but it is not automatically all-encompassing. Again, generally speaking, an “excess” policy provides additional coverage to specified areas of exposure.

Each option has its own specific features and benefits, its own limitations and guidelines. But worse than possibly simply misunderstanding what each coverage option provides, acting on this faulty assumption could prove costly should an event require such a policy to become engaged. In other words, you may not be as well covered as you thought, because the rules of engagement are not necessarily as simple as they might sound.

Assuming the difference between “umbrella” and “excess” coverage may, at first glance, sound logical, but never assume. Be sure. Let the experts at The Reschini Group help you make the best choice for your particular situation, so that you have the broadest possible coverage necessary.

The Reschini Group provides these updates for information only. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.