What information will the loss adjuster look for on the declarations page?
- who is insured,
- address of property,
- specific amounts of coverage for different lines of insurance
- form number of the actual policy wording used
Why must the loss adjuster check the policy for lienholders?
- Claim payments must include lien holders as payee.
- The lien holder may have an independent right of recovery under the policy.
What will happen if the insured fails to comply with a policy warranty?
The insurer is discharged from liability under the policy as of the date of the breach
What is the purpose of a Breach of Condition clause?
- keeps the policy coverage intact for losses that are not related in any way to the breach of warranty.
- i.e. a failed fire alarm system does not have anything to do with roof damage from a hailstorm – the roof is covered even though the fire alarm is a breach of warranty.
What does the Property Protection Systems clause state?
- Insured shall notify forthwith the Insurer of any interruption to or flaw or defect, coming to the knowledge of the Insured, in any:
- sprinkler or other fire extinguishing system;
- fire detection system;
- intrusion detection system; and
- shall also notify forthwith the Insurer of the cancellation or non-renewal of any contract which provides monitoring or maintenance services to any of these systems, or
- of the notification of the suspension of police service in response to any of these systems.
When does the loss adjuster refer a risk to underwriters?
When a risk has been misclassified or does not meet the insured’s underwriting criteria
Following an emergency situation, whose responsibility is it to protect insured property against further damage?
The insured (with the assistance of the adjuster).
Why might insureds wish to perform salvage activities?
The insured may have experience dealing with loss and have developed a strategy to properly mitigate the loss.
On partially damaged, reconditioned stock, what amount would the claim be settled for?
The cost of reconditioning the property or the difference between the normal price and the reduced price if the property is sold as “damaged” goods
List the water-related perils typically excluded under commercial broad form policy wordings.
- flood, including waves, tides, tsunamis etc. but, this exclusion does not apply to ensuing loss or damage which results directly from fire, explosion, smoke, leakage from fire protective equipment, leakage from water main, or property in transit;
- seepage, leakage, or influx of water etc. unless concurrently and directly caused by a peril not otherwise excluded.
Why should the adjuster investigate whether fire-prevention equipment malfunctioned or failed?
- There may be a possibility of subrogation against an installer or contractor that failed to maintain and test the equipment.
- Also the insured has a responsibility to properly maintain equipment in working order – failure to do this may constitute a breach of warranty.
Why may perils excluded under all risks coverage create a motive for arson?
Arson may be used to cover up damage done by another peril that is excluded.
Why does a builders risk policy cover the owners, the general contractor, and any subcontractors?
Designed to avoid disagreements in the course of a claim when a party involved in the construction project has its own insurance policy
What do contractor’s equipment floater wordings insure?
- Large equipment used in heavy construction projects.
- Also may cover smaller equipment and hand tools.
Who usually attends to a boiler and machinery loss?
Specialists from boiler and machinery insurers.
Why is it important to manage an insured’s expectations on a subrogation action?
Available information may change, financial position of responsible party may change, there may be no recovery on a file.
When will the adjuster send a preliminary report to the insurer?
Within 24-72 hours
What information will the detailed adjuster’s report often include?
Detailed narrative of the loss incident and explanation of the damage issues, repair estimates, salvors’ offers, copies of contracts, statements and a reserve update.
The declarations page of a commercial policy includes...
- ...All of the above;
- a) specific information about who is insured;
- b) the address of the property insured;
- c) specific amounts of coverage for different lines of insurance
The loss adjuster must inform potential salvors of...
- ... a and b above;
- a) the wholesale and retail values of the goods;
- b) any restrictions that might be imposed on the sale of goods
CEF stands for...
...Contractor’s Equipment Floaters
The basis of settlement under a boiler and machinery policy would be...
...the lesser of the cost to repair the damaged property or the cost to replace it with property of like kind, capacity, size, quality, and function
The builders risk policy usually covers the...
...Owners, the general contractor, and any sub-contractors
EQ: The declaration page of a commercial policy generally outlines...
...who is insured, the risk insured, and amounts of coverage
EQ: A stock reporting form provides coverage on...
...an actual cash value basis according to the stock values reported
EQ: A warranty under a policy is often used to...
...limit policy coverage
EQ: The builders risk policy usually provides coverage for...
...the owners, the general contractor, and any subcontractors