CAIB 1 Chapter 5 Slides PDF

 What Jumped Out At You? Students have two minutes to write down the topic or fact that resonates or sticks in your head the most, from the course so far. No concept is too small! Remember the Forgetting Curve! Insurance Graphic Organizer 6 Legal Precedents relating to Personal Li...

 What Jumped Out At You? Students have two minutes to write down the topic or fact that resonates or sticks in your head the most, from the course so far. No concept is too small! Remember the Forgetting Curve! Insurance Graphic Organizer 6 Legal Precedents relating to Personal Liability Exposures: What is the duty owed to 3) Children? The following slides contain the information needed to answer this question.  6 Legal Precedents Relating to Personal Liability Exposures Cont’d 3) Children Childrens’ activities = many bodily injury/property damage claims ○ Playing with matches: loss to rinks/schools/other buildings ○ Using firearms/motorized recreation vehicles results in permanent injury/death to others Legal Duty Owed ○ Common Law: children are responsible for injury/damage UNLESS it is proven they are incapable of understanding consequences of their actions  6 Legal Precedents Relating to Personal Liability Exposures Cont’d 3) Children Legal Duty Owed Parents don’t usually pay for torts of children EXCEPT if it is shown: a) Demonstrated failure of parent to properly supervise/control activities ○ Leaving children at home (no supervision)/unattended at public events a b) Injury/damage from dangerous thing/animal relinquished by parent(s) to control of child ○ Parents = financially responsible for injury/damage from below if given to children: Gun/knife All-terrain vehicle, dirt bike, snowmobile, watercraft  6 Legal Precedents Relating to Personal Liability Exposures Cont’d 3) Children Legal Duty Owed Parents usually do not have to pay for torts of children EXCEPT if it is shown: CONT’D c) Injury/damage from child acting on authority of parent(s): ○ Parents directing children to: Mow the lawn Remove snow Paint dwelling exterior/outbuilding d) Injury/damage from employment duties of parent’s business ○ Parents are responsible for injury/damage caused to others from child’s employment in parent’s business  6 Legal Precedents relating to Personal Liability Exposures: What is the duty owed to 3) Children? Answer  Chapter 5: Farm Insurance Section 1 - Farm Insurance Farm Coverages Types of Farms: ○ Products grown/produced Ex. Veggies, potatoes, fruits, honey, tobacco, grains, meats, eggs, dairy ○ Types of specialized machinery/equipment used Machinery/equipment to operate grain farm is much different than specialized dairy/poultry/hog/beekeeping ○ Types of buildings required The more specialized the farm, the more sophisticated the building Often a big difference in values of buildings between farms  What Farm Policies Insure 1) Dwelling building/personal property 2) Major outbuildings/contents 3) Machinery/equipment 4) General Liability  Farm Coverages Combines personal & commercial policy wordings Most farm insurance coverages are on package policy basis In order to qualify for reduced rates: insureds must buy all of the following coverages: 1) Dwelling building/personal property ○ Similar/identical to habitational properties in towns/cities 2) Major outbuildings/contents ○ Property forms = similar coverages building/stock for commercial business 3) Machinery/Equipment ○ Farm equipment similar to what’s on equipment in other commercial businesses 4) General Liability ○ Insures farm risks  1) Dwelling Building/Personal Property Habitational property forms ( urban and rural risks) Homeowners forms Tenants Packages Condominium Unit Owners Form Mobile Homeowners Form Upon request: insurers provide farmers with same optional coverages as insureds living in towns/cities Endorsements will be same for all insureds Ex. Sewer back-up endorsement/Fine arts floater added to farm policy Section 2 - Liability Coverage (by habitational package policies) is REMOVED REPLACED with liability wording giving business/personal liability protection that farmers need  2) Major Outbuildings/Contents Deductible applies to all losses (this policy) a) Buildings ○ Covered under standard policy wordings: barns, workshops, granaries, machinery storage buildings/structures like corrals/fences/yard lights/fuel stands ○ Exclusions Buildings/structures used all/part for manufacturing/commercial purposes Not insured: seed cleaning plants/workshops ○ (when used for commercial purposes) Most insurers insure barns raising poultry/hogs/dairy cattle when: ○ Income from selling birds/animals/their products = incidental to farming operations  2) Major Outbuildings/Contents Cont’d a) Buildings Exclusions ○ Windmills/chargers/their towers/independently erect television/radio towers/their appurtenances Windstorm/hail coverages provided by policy Limiting clause: Excluded: Any/all damage to metal roofs/siding unless damage is a punctured roof/siding  2) Major Outbuildings/Contents Cont’d a) Buildings: Policy Features i) Coverage available: blanket OR scheduled basis ii) Co-insurance Clause Applicable ○ Most policies: 80% co-insurance requirement ○ When on an “All Risks” basis, 90% co-insurance requirement usually applies  2) Major Outbuildings/Contents Cont’d a) Buildings: Policy Features iii) Replacement Cost Coverage Available ○ Most insurers cover on REPLACEMENT COST basis when buildings are: 1) Less than 15 years old 2) Constructed mostly of new materials 3) On permanent foundations 4) In use for (original) intended purpose Broker can only bind coverage on actual cash value basis when buildings do not meet all 4 conditions (requirements vary) Replacement Cost Endorsement insures cost to rebuild/replace lost/damaged property without deducting for depreciation Cost reflects insurance amount purchased  2) Major Outbuildings/Contents Cont’d a) Buildings: Policy Features iv) Deferred Loss Settlement ○ Building with specialized use concern insurers that insured may not replace it after loss ○ Deferred Loss Settlement Clause To avoid payment of full insurance that was bought when out-buildings aren’t replaced after loss Insured gets initial payment (no more than 50%) of amount payable at time of loss and remaining (50%) is payable (+ interest) IF: Repair/replace building with one for the same purpose Repair/replacement is completed 9 months from date of loss/damage Building repaired/replaced within  2) Major Outbuildings/Contents Cont’d a) Buildings: Policy Features v) Fire Department Charges ○ Municipalities Act Most provinces require fire fighting services given to all ratepayers Insureds aren’t obligated to pay for fire fighting services when used If a serious fire and a neighbouring urban/rural fire department is called: Most policies automatically include payment for amounts to insured by other fire department MIN coverage amount (approx. $500-$2,500) Limits can be increased (for add’l premium) Deductible doesn’t apply  2) Major Outbuildings/Contents Cont’d a) Buildings: Policy Features vi) Debris Removal ○ If loss/damage to property is due to insured peril, (reasonable) expenses of debris removal is paid by insurer ○ Amount available if insurance remains after loss to property is paid  2) Major Outbuildings/Contents Cont’d b) Contents Building contents is insured on scheduled OR blanket basis Blanket coverage = most common ○ Items with high values (welders/grinders/lathes) might be scheduled separately on policy Coverage usually 80% co-insurance requirement ○ “All Risks” coverage basis: 90% co-insurance requirement is usual Items to be insured separately: ○ Threshed grain ○ Artificial insemination tanks/contents ○ Fertilizers/herbicides/pesticides  3) Machinery/Equipment Farm policy: ○ Insures mobile farm/field equipment (incl. All equipment attached/owned/used by insured - excluding repair parts) usual to farm operation in Canada and insured may be liable Some machinery has greater exposure and needs an add’l premium: ○ Farm tools/repair parts ○ Grain dryers ○ Irrigation equipment ○ Machinery used in custom farming operations  3) Machinery/Equipment Cont’d Definition of Custom Farming ○ Not given under all policies ○ One insurer’s definition: Using your farm machinery/equipment for others AWAY from your farm premises for compensation Occasional farm work done for others in return for their work for you IS NOT custom farming ○ Deductible for all losses  3) Machinery/Equipment Cont’d Exclusions Loss/damage from electrical currents (other than lightning) EXCEPT damage from fire/explosion Mechanical breakdown EXCEPT damage from fire/explosion Loss/damage from logging/forestry/brush cutting/clearing/sawmill operations Loss/damage to property engaged in custom farming/in transit in connection with custom farming UNLESS permission is on Coverage Summary page Loss/damage wear and tear/gradual deterioration/latent defect/damp atmosphere/freezing/extremes of temperature/insects/rodents/vermin/skun ks Repair/adjust/service/fuel/maintaining  3) Machinery/Equipment Cont’d Exclusions Loss/damage to data Loss/damage in/directly due to “data problem,” BUT if loss/damage is from “data problem” results in add’l loss/damage DIRECTLY from fire/explosion/smoke/leakage of fire protective equipment/water damage ○ (frozen pipe/tank burst) Internal damage to: combines/balers/forage harvesters/other harvesting equipment BY clogging/compacting/plugging/piling up of straw/hay/other intended to be ingested into machine Loss/damage from un/coupling operations  3) Machinery/Equipment Cont’d Policy Features i) Coverage on Blanket OR Scheduled Basis ii) Co-Insurance Clause Applicable ○ 80% co-insurance requirement (most policies) iii) Loss of Use (extension) ○ When damage to machinery, insured may need to rent substitute machine to complete work underway ○ Some policies automatically give (up to) $5,000 to reimburse insured for expenses when renting a similar machine (during repair) ○ Increased limits available (add’l premium)  3) Machinery/Equipment Cont’d Policy Features iv) Newly Acquired Machinery (extension) ○ If add’l OR replacement machinery is acquired (during policy period), coverage usually extends FOR 30 DAYS Limits vary No gaps: advise farmers to contact broker when machinery is purchased/rented during policy period v) Replacement Cost Coverage ○ Some insurers give replacement cost if machinery less than 5 years old vi) Ltd. Waiver of Depreciation for Scheduled/Blanket Equipment ○ Some insurers waive depreciation on equipment (up to 60 months) if insured is original purchaser/owner AND maintains insurance (100% of replacement cost of  Create a “What” question Students take two minutes to create a “What” question based on the concepts covered so far, in the chat window. No question is too simple! Remember the Forgetting Curve!  4) General Liability No standard policy form, other names used: ○ Liability Coverage ○ Farmers General Liability ○ Farmers Comprehensive Liability General Liability has various Insuring Agreements ○ I. Bodily Injury/Property Damage Liability ○ II. Medical Payments ○ III. Voluntary Compensation for Damage to Property ○ IV. Persons Insured ○ V. Territory  4) General Liability Cont’s I. Defining Persons Insured Employees DEFN Persons Insured EXTENDS: ○ Includes Named Insured employees (acting in scope of duties) DEFN Persons Insured can be bought by: ○ Partnerships/joint ventures/organizations/corporations + partners/spouses/officers Employee Categories: ○ a) Residence Employees Duties of person = exclusively connected with maintenance/use of residence premises Not involved in insured’s business/farming pursuits  4) General Liability Cont’s I. Defining Persons Insured Employees (Categories) b) Farm Employees: many insurers cover certain employees: ○ i) Employees paid for work/hired part-time/seasonal/-full time to perform duties principally for farming activities outside insured’s dwelling Greatest exposure to risk ○ ii) Employees engaged in farm work on behalf of insured (neighbourly exchange of assistance) that insured isn’t obligated to pay for Farmers help each other Extension removes coverage gaps if bodily injury/property damage Important when person giving assistance has no/inadequate  4) General Liability Cont’s I. Defining Persons Insured Employees (Categories) b) Farm Employees: many insurers cover employees: ○ iii) Volunteers: occasional help from friends/children/relatives not living on the farm (ex. grain farmers elisting help during seeding/harvest time) When not compensated for work and not engaged in neighbourly exchange of assistance, falls in definition of Persons Insured  4) General Liability Cont’s II. Territory Covers losses in Canada and USA (territories/possessions) Worldwide coverage of injury/damage IF: ○ i) Goods/products made/sold by insured in coverage territory ○ ii) Activities of insured (home is in territory described) is away for short time (business operation reasons) ○ iii) Personal/advertising injury offences through internet/electronic communication means Claims must be brought to coverage territory: ○ 1) Policy follows English common law principles: Judged by courts competent in English common law principles  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability Very broad Insuring Agreement Covers: Pay on insured’s behalf - all sums Insured is legally obligated to pay as compensatory damages: ○ a) Bodily injury ○ b) Property damage due to accident Similar to habitational/commercial liability policies ○ Insures: insured’s legal liability for bodily injury/property damage to 3rd party ○ Payment limited: compensatory damages needed to indemnify person suffering loss ○ Not covered: punitive/nominal/other damages  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability Analyzing Exposures to Loss Policy must cover liability from personal acts/farming operations Liability Rider COVERS: a) Personal Liability Bodily injury/personal damage from personal acts anywhere in the world Accidental bodily injury/damage to people/property helping at agricultural fair/4-H cattle show/shopping/fishing/playing golf are covered  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability Analyzing Exposures to Loss b) Premises Liability Covers bodily injury/property damage from ownership/use/occupancy ALL premises on policy INSURED PREMISES: i) All residence premises: DEFN Residence Premises ○ 1-2 family dwelling where Named Insured/spouse maintains residence Restricts number of families able to occupy dwelling Insurer limits number of persons covered If others reside in separate dwelling on premises, coverage may be added (add’l premium)  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability Analyzing Exposures to Loss b) Premises Liability INSURED PREMISES: Cont’d ii) All premises Named Insured/spouse owns/rents/operates as a farm ○ Extends: Includes ALL land used for farming purposes iii) All other premises/private approaches of insured (connected to a/b above) iv) Individual/family cemetery plots/burial vaults ○ Included in “insured premises” definition  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability Analyzing Exposures to Loss b) Premises Liability INSURED PREMISES: v) Premises where insured is temporarily residing (if not owned by any insured) ○ Extends: includes premises owned by others used by insureds/occupied by them (habitational purposes) ○ Ex. Covers accidental bodily injury/property damage to others by insureds while staying at friend’s cottage/resort hotel vi) Vacant land owned/rented to insured (incl. Land where independent contractor is building 1-2 family dwelling which insured will occupy) vii) Add’l farm premises (incl. Residences)  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability Analyzing Exposures to Loss c) Farm Operations Liability Coverage needed for losses away from premises Ex. Coverage extends to bodily injury/property damage to others FROM (unless expressly excluded): ○ i) Hay cutting/baling along municipal roadway ○ ii) Driving farm machinery on public roads  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability Analyzing Exposures to Loss d) Tenants’ Legal Liability Insureds use/rent/occupy premises not owned by them Coverage of property damage to premises used for residential purposes (contents) away from farm on All Risks basis i) Coverage provided by policy doesn’t apply to: ○ Residence premises used/rented/occupied by insured on premises ○ Farm outbuildings ii) Some policies automatically give Tenants’ Legal liability coverage to farm residents used/rented/occupied by insured(s) When farm buildings/contents on farm site =  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability Analyzing Exposures to Loss e) Watercraft Liability i) Owned Watercraft ○ Automatic coverage” specific watercraft owned by insured ○ Sizes/types of owned watercraft varies ii) Non-Owned Watercraft ○ No limits to size/type of non-owned watercraft insured is allowed to use ○ No coverage for watercraft damage (itself) Liability coverages for owned watercraft may be added for add’l premium  Definitions DEFN Motor Vehicle Land motor vehicle/trailer/semi-trailer for public roads ○ (incl. machinery/apparatus attached) Motor vehicles must be licensed/insured under separate auto policy DEFN Recreational motor vehicle: Golf cart/motorized snow vehicle/ATV Not subject to motor vehicle registration/other land motor vehicle for recreation (off public roads) Often little coverage in other policies for “off-premises” use of owned recreational motor vehicles  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability Analyzing Exposures to Loss f) Motorized Vehicle Liability Farm liability policies: Not for liability from use of a motor vehicle Exceptions Farmers often convert older motor vehicles for other purposes (carrying water/feed/property) between two locations on same premises ○ Older grain trucks licensed during harvest only/kept in “dead storage” the rest of the year ○ Little sense that above are licensed/insured under separate auto policy Covers Bodily injury/property damage if motor  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability: Analyzing Exposures to Loss f) Motorized Vehicle Liability Motor Vehicles Insured by Policy Except while towed/carried by/on a motor vehicle NOT motor vehicles (they ARE insured) i) Utility/boat/camp/home trailer ○ Covers liability from use/ownership/occupancy of trailer when in coverage territory ii) Recreational motor vehicle ○ Owners of recreational motor vehicles must be advised of limitation: Off-premises liability coverage usually bought from same insurer  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability: Analyzing Exposures to Loss f) Motorized Vehicle Liability NOT motor vehicles (the ARE insured) ii) Recreational motor vehicle ○ Owned Recreational Motor Vehicles - Off Premises Coverages Limited Restricted coverage on owned recreational motor vehicles On/off premises Ex. Except golf carts for golfing purposes, excludes payment for bodily injury/property damage from use of owned recreational motor vehicle when away from premises  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability: Analyzing Exposures to Loss f) Motorized Vehicle Liability NOT motor vehicles (the ARE insured) ii) Recreational motor vehicle ○ Owned Recreational Motor Vehicles - Off Premises Coverages Limited Excludes/regardless of whether rec motor vehicle is used for work Ex. Farmers use dirt bikes/ATV/snowmobiles as transportation to check fence lines/crops/feeding cattle on land away from residence Potential exposures: Bodily injury to others Property damage (collision with vehicles/property of others)  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability: Analyzing Exposures to Loss f) Motorized Vehicle Liability NOT motor vehicles (the ARE insured) iii) Crawler/farm type tractors/farm implements ○ Exposure from using motorized farm machinery used on/away from premises iv) If not subject to motor vehicle registration, any equipment for off-public roads ○ Covered: Bodily injury/property damage from operation of yard equipment Riding lawn mowers/garden type tractors ○ Covered: Non-motorized agricultural equipment Seed drills/cultivators/discers/balers  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability Analyzing Exposures to Loss g) Business/Business Property Liability ○ Exclusion DOESN’T APPLY: Bodily injury/property damage by insured: i) Engaged in non-business pursuits activities Ex. farmers promoting other businesses while in curling bonspiel/golf tourney/other non-business activity IS COVERED IF is bodily injury/property damage ○ ii) Premises for purpose that receives payment Uses of premises PERMITTED: Not seen to change premises/not otherwise business property into business property  4) General Liability Cont’s III. Bodily Injury and Property Damage Liability: Analyzing Exposures to Loss g) Business/Business Property Liability Exclusion DOESN’T APPLY to bodily injury/property damage by insured: ○ ii) Premises for purposes that receives payment Renting/holding for rent, part of residence premises for dwelling unless accommodation of 3 (or more) roomers/boarders Rending/holding (rent), car spaces in stalls/garages/stables on premises Renting/holding for rent a part of residence as office/school/studio occupancy Professional Services NOT insured ○ EXCLUDED: Bodily injury/property damage  Insuring Exclusions This insurance (under Coverage A) DOESN’T apply to: a) Bodily injury/property damage from ownership/maintenance/operation use/loading/unloading of air cushion vehicle/aircraft ○ Exposures = greater than average potential for loss (must insure separately) b) Bodily injury/property damage from ownership/existence/use/operation by/on behalf of insured (any premises) FOR PURPOSE OF: ○ Airport/aircraft landing strip/all operations necessary/incidental  Insuring Exclusions Cont’d This insurance (under Coverage A) DOESN’T apply to: c) Bodily injury to employee (other than residence employee) during employment by Insured Farming Employees don’t get Workers’ Compensation Acts (add’l coverage) ○ Workers’ Compensation Acts pays at NO FAULT for employees injured in course of employment duties ○ Farm employees aren’t required to be insured under this act Must sue employers for job related injuries Need for Employers’ Liability Coverage ○ Coverage for actions initiated by residence employees ○ Farmers usually buy Employer’s Liability  Insuring Exclusions Cont’d This insurance (under Coverage A) DOESN’T apply to: c) Bodily injury to employee (other than residence employee) in course of employment by Insured Need for Employers’ Liability Coverage ○ Coverage when insured is shown as legally liable for employee’s injuries: Improper tools/equipment provided to use Directions on how to perform a task are incorrect Task assigned couldn’t be reasonably performed by one person ○ Sometimes Employers’ Liability Coverage is automatically included Limits = same as other coverages in this section  Insuring Exclusions Cont’d This insurance (under Coverage A) DOESN’T apply to: c) Bodily injury to employee (other than residence employee) in course of employment by Insured ○ Voluntary Compensation (Employers’ Liability) Rider No fault of insured: employees may be injured/killed in accident No recourse against insured (Employer’s Liability Rider) Farmers buy Voluntary Compensation (Employer’s Liability) Rider to ensure employees/beneficiaries receive benefits Rider = NO FAULT benefits Helps to eliminate employees suing employers for job-related injuries  Insuring Exclusions Cont’d This insurance (under Coverage A) DOESN’T apply to: c) Bodily injury to employee (other than residence employee) in course of employment by Insured ○ Weekly indemnity amount given (by rider) usually limited Ex. MAX weekly indemnity limits ($150) common Discourage deliberate accidents: insurer limits payment to ⅔ of employee’s weekly wage (at time of accident) ○ Coverage when Employers’ Liability = also insured by policy ○ Coverages by Voluntary Compensation (Employer’s Liability) Rider: Section 1 - Loss of Life (100 under S. 2) - Funeral Expenses  Insuring Exclusions Cont’d This insurance (under Coverage A - Bodily Injury/Property Damage Liability) DOESN’T apply to: d) Property Damage To: i) Property owned by insured ○ Coverage loss to property owned by insured Insured under direct damage policy ii) Property occupied/used by insured/rented to/in care, custody, control of insured OR insured is (any purpose) exercising physical control ○ Except under Tenants Legal Liability coverage ○ No coverage: damage to others’ property that insured is exercising ANY bit of physical control ○ Separate coverage:  Insuring Exclusions Cont’d This insurance (under Coverage A) DOESN’T apply to: e) Property damage to products manufactured/sold/handled/distributed by insured OR work performed by/for insured from products/work/any part ○ Common to liability policies ○ Purpose: Eliminates covering defective products/work sold/provided to 3rd party ○ Any payment for damage to insured’s product/work = warranty  Insuring Exclusions Cont’d This insurance (under Coverage A) DOESN’T apply to: f) Property damage from substance released/discharged from aircraft Purpose: eliminates coverage from crop dusting/spraying via aircraft by insured ○ Potential of Chemical Drifting onto neighbour's crops is too risky Not insured under regular premium ○ Insurance not readily available (speciality insurer) When work done by parties engaged in business, coverage for damage (to neighbour’s crops) usually insured (business’s liability policy)  Create a “Why” question Students take two minutes to create a “Why” question based on the concepts covered so far, in the chat window. No question is too simple! Remember the Forgetting Curve!  Your Assignment Environmental Exclusion The slides for “Environmental Exclusion,” have been moved to the CAIB 1 Chapter 5 Insurance Graphic Organizer (IGO) which can be accessed through your student portal. You can submit your IGO activity to your facilitator or ask questions in class. For an explanation of the slide information and an answer to the activity, please check out the “IGO Answers” videos in your student portal. Please ask questions if you need to!  Defence - Settlement - Supplementary Payments Costs paid by insurer when claim is made under Coverage A - Bodily Injury/Property Damage Liability Costs are in addition to insurance amount on Coverage Summary page INSURER SHALL... a) Defend (cost of Insurer) ANY civil action against Insured (bodily injury/property damage) insurer has right to investigate/negotiate/settle claim whichever is deemed expedient by insurer Insurer = right to defend civil action against insured ○ Right to investigate/negotiate/settle claim/suit if decided to be appropriate ○ All costs with activities are borne by insurer Insureds: cost to prepare/conduct defence  Defence - Settlement - Supplementary Payments Cont’d INSURER SHALL... b) Pay premiums of bonds to release attachments for amount not exceeding limit (Summary Coverage page), all premiums on appeal bonds required in defended suit BUT without obligation to apply/furnish bonds: To ensure judgement (against defendant) is paid, court may seize assets ○ Order made at/after commencement of main action ○ Defendants wanting access to assets must post a bond with court ○ If defendant loses/appeals decision, appeal bond might be needed (by court) to ensure payment of all court costs for appeal Insurer will pay for bonds BUT no responsibility to apply for/provide bonds  Defence - Settlement - Supplementary Payments Cont’d INSURER SHALL... c) Pay costs against insured in civil action (defended by insurer), any interest accruing after judgement on part of judgement within limits of insurer’s liability (on Summary of Coverages page) Court charges for time to hear/rule - charged to one OR both parties After award determined, delay in pay results in loss of interest income to plaintiff ○ Insurer will to pay interest costs - if exceeds limits, interest amount paid is calculated on policy limit Example ○ Award (to plaintiff) $2,000,000 ○ Limit of Insurance (policy) $1,000,000 ○ Interest payment: calculated on $1,000,000  Defence - Settlement - Supplementary Payments Cont’d INSURER SHALL... c) Pay costs: Against insured in civil action (defended by insurer), any interest accruing after judgement on part of judgement within limits of insurer’s liability (on Summary of Coverages page) a) Pay expenses (by insured) for imperative medical/surgical at time of accident If immediate medical aid is provided, long term disability/death is reduced Damages against insured may be less than if medical aid hadn’t been sought  Defence - Settlement - Supplementary Payments Cont’d INSURER SHALL... c) Pay costs: Against insured in civil action (defended by insurer), any interest accruing after judgement on part of judgement within limits of insurer’s liability (on Summary of Coverages page) b) Pay (reasonable) expenses incurred at Insurer’s request to assist investigation /defence of claim/suit including loss of earning (not exceeding $250/day) ○ Condition: Insured must fully co-operate ○ Reasonable costs: paid by insurer (actual loss of earnings up to $250/day) ○ ONLY expenses incurred at insurer’s request = paid Private consultations with lawyers/accountants/other/firms NOT PAID  IV. Coverage C - Medical Payments Insurer will/agrees to… Pay ALL (reasonable) medical expenses from accidentally injured party on insured’s premises/elsewhere Coverage = voluntary by insurer (regardless of fault) ○ Medical Payments coverage = not liability insurance Coverage provided is limited/varies ($500-$10,000/person) Payment is limited to expenses within 1 year of accident date Coverage DOES NOT PAY FOR (medical expenses) ○ Those insured by policy (except residence employees) ○ Those doing work connected to business on insured’s premises  V. Coverage D - Voluntary Compensation for Damage to Property Insurer will/ agrees to… Make voluntary payment to owner of damaged property ○ Accidentally via insured/it is unlikely insured will be legally liable ○ Intentionally via insured under 12 years old Limit by insurers to stated amount (varies) Exclusions: Two key exclusions (loss/damage) ○ a) Property owned/rented to insured/tenant of any insured/resident of Named Insured’s household Applies: damage to property of others OWNED by insureds/tenants OR RENTED to them. Ex. Insured borrowed & lost neighbour’s fishing eqpt Coverage A - Bodily Injury/Property Damage Liability = NO COVERAGE to  V. Coverage D - Voluntary Compensation for Damage to Property Cont’d Exclusions: Two key exclusions (loss/damage) b) FROM ownership/maintenance/operation/use/un/l oading of self-propelled land vehicle/trailer/semi-trailer/farm machinery/equipment/aircraft/air cushion vehicle/watercraft ○ Eliminates covering: loss/damage to certain property classes ○ Difficult to separate previous from new damage ○ Eliminates potential arguments Determining Premium Based on total acreage of principal farm premises AND all add’l premises maintained by Named Insured/spouse ○ Add’l charges by insurers if other conditions are present  Underwriting Farm Insurance Coverages 1) Written Application Req’d Complete application Diagram of distance between all buildings (insured or not) Photographs of all buildings (incl. dwelling) 2) Binding Authority Brokers not usually allowed to bind coverage on: ○ Vacant/unoccupied property ○ Specialized buildings ○ Outbuildings being constructed ○ Risks declined/cancelled/restricted by another insurer ○ Risks with prior losses Acreages may be written on farm insurance policy when: ○ Insured conducts farming operation/needs coverage for out  Underwriting Farm Insurance Coverages Cont’d Underwriting Farm Insurance Coverages 3) MIN Premium Varies Approximate range: $250-$750 4) Deductible Dwelling/personal property insured: usual deductible (min $500) Agricultural buildings/contents/farm machinery insured “All Risks:” usual deductible ($500) Rate credits available if choose higher deductibles  Underwriting Farm Insurance Coverages Cont’d 5) Additional Coverages Optional coverages for insured’s personal property (usually same as what homeowners can select) Add’l coverages from most insurers ○ Agricultural Produce, Fertilizer, Chemical Floater ○ Farm Livestock Rider ○ Farm Business Interruption Insurance  Term and Definition Students have two minutes to create a “flashcard” and write it in the chat window. Write the term and the definition. It can also be a concept. No concept is too simple! Remember the Forgetting Curve!