There are over 6,000 insurance companies and 280,000 insurance salespersons in the U.S. They all want your business! Which ones are right for you?
When you buy an insurance policy what you are really getting is a lengthy document full of promises to cover you as well as exclusions and conditions to those promises. We find that at the time of a claim, many insurers are quick to question coverage including inquiring into such areas as:
- What name was listed on the policy as an insured and if it wrong, should coverage be denied?
- Was an endorsement attached that required the insured to maintain in good working order fire sprinklers, alarms or security lighting? Was this complied with or is there a basis to deny coverage?
- What standard policy exclusions might be applied to this loss and were there any additional endorsements added that contain special exclusions that apply?
- Is there a coinsurance penalty provision that has not been waived in the property insurance which allows us as the insurer to impose a penalty upon the insured in the settlement of the loss?
- Is any part of the rebuilding of the house or building presenting an increased cost of reconstruction due to ordinances or laws and if so, can the loss payment be limited?
- Is there a loss payee on the policy which is claiming a right to coverage? Can coverage be denied to that loss payee because of the acts of the main insured?
- Did the insured say anything in the application for insurance upon which we can rely to deny coverage even if the agent completed the application?
We regularly serve as expert witnesses in insurance litigation and find that in many ways, the insurance agency that sold you the policy is more important than the insurance company because the insurer will only extend coverage in a manner that is consistent with what the agent had negotiated when the policy was purchased.
We find that it is important to have an expert who can look carefully at the policies and attempt to make them as bullet proof as possible and to point out areas where gaps exist. Here are some examples of what we have done to protect our policyholder clients:
- Two agencies are competing to write the insurance for a large manufacturing company in Detroit. One submits a proposal with 5 pages and the other submits a summary of insurance which is 25 pages. The shorter proposal is $10,000 less in premium. The client is leaning towards going with the cheaper proposal in attempt to control costs. Are the coverages being offered the same as the more comprehensive proposal? What is missing? We analyzed these proposals and made recommendations to the client based upon our knowledge of the insurance policies being offered and the potential gaps.
- A cooperative housing association with 100+ resident members has heard about a recent $10,000,000 lawsuit against an apartment complex arising out of a carbon monoxide poisoning at a unit due to a faulty furnace. The board of directors is wondering whether it would have liability coverage if this kind of lawsuit were brought against it. We analyzed the current policies, determined that coverage was excluded and negotiated with the agent and insurer to add the coverage back for no additional premium.
- A family owned property management company wanted to insure the owner’s personal vehicles on its auto “fleet” policy as a benefit to them. The vehicles are titled in the owners’ personal names. We looked are the policies and advised the client what needed to be done to extend personal coverages to the owners in this situation.
- An insurer is denied coverage for a fire claim, saying that there was inaccurate information on the application for insurance. The owner of the property came to us stating that his insurance agent filled out the application and he never even saw it. We advised the client of the options in pursuing the insurer and the agent to be made whole.
- A building owner leased its 50,000 square foot building to an industrial tenant on a triple-net lease. The tenant insured the building as part of this lease. The law firm representing the owner landlord came to us for an opinion on whether the client was properly covered.We reviewed the lease and the policy and found major gaps in coverage that exposed the owner and made recommendations on how to close the gaps.
- A business was hiring a contractor to do some extensive renovations on its premises. The business owner wondered what insurance he should require of the contractor and what indemnification provision he should get from the contractor to be properly protected. We helped draft an addendum to the contract as related to insurance and indemnification provisions which were favorable to the business.
- A technology company had concerns about its exposure to claims by its customers for loss of data due to unforeseen events. We drafted a set of terms and conditions to limit liability including a dollar cap.
Do you read your insurance policies? Your insurers do. They also have teams of lawyers and law firms that assist them in drafting language to their advantage.
Under the law of most states, you are required to read your insurance policies and raise any questions within a reasonable period of time. Even if you do read your policies, it is unlikely that you understand all of the intricacies and fine print or the options available to address such gaps.
Our firm represents many businesses and individuals in reviewing insurance policies including comparing competing quotes and proposals, making recommendations on the selection of agencies, and assisting in claims management.
We also serve as expert witnesses in many insurance-related cases throughout the U.S.
Call us at 248-321-8941 or email us today for additional information on how we can help you!