By Ryan Wellman, Commercial Insurance Agent
Ask any business owner about their insurance policy, and they will say that aside from the limits and premiums, it is standard. This assumption has the potential to cause serious problems when it comes time to make a claim. Most business owners fail to understand that the policy they see year after year contains “conditions” and requirements for coverage to trigger like they think it will. You, the business owner, must closely follow the rules the carrier provides or they can deny coverage for a claim.
The conditional insurance policy is a contract, with obligations from the insurance carrier and from the policy holder (the business). The business owner has requirements that must be adhered to if they wish to file a claim.
For example, a policy requires: “You (“insured”) must see to it that we are notified as soon as practicable of any occurrence, claim, etc…” This is problematic as the term “you” encompasses quite a few parties. Flip a couple pages back in that policy you’re looking at and “you” is defined as the named insured listed on the declarations page. This sounds simple enough until you define who is an insured. This starts to open Pandora’s Box and that’s the heart of this issue. “You” isn’t just you- it’s any of your employees, your volunteers, the temporary workers, the partners, their spouses, your spouse. So, the conditions of the contract apply to anyone in your business, at any time.
Putting this into perspective, let’s say a customer slips and falls in your lobby and the only one to witness it is one of your employees. The customer gets up and says they’re fine, so the employee never tells anyone. For two years nothing comes of it, until one day you receive a claim for injuries. Your insurance company has grounds to deny the claim as the employee who witnessed the accident is encompassed in the term “you”.
This might seem like a mere technicality, but these are the types of things that will determine whether a claim is paid or not and whether a business survives a loss. It doesn’t require a high-level degree to fix, often it just take a process to identify, a willingness to look. Most surprising of all, fixes like this are often complimentary, requiring the agent to simply ask the insurance carrier to tweak the contract language. Keep this is mind next time you sit down to go over your insurance policy and demand better from your insurance contract.