Masonry Magazine March 1966 Page. 9
Special Report:
NEW LIABILITY POLICY FORMS
By Walter T. Derk, Fred S. James & Co.
Members are urged to read this article carefully so that they will be aware of the changes that are taking place in the insurance field. Should you have additional questions, please contact the MCAA Executive Office and we will endeavor to assist you.
At this writing the National Bureau of Casualty Underwriters and Mutual Insurance Rating Bureau are jointly introducing the first major overhaul in primary liability insurance policies since 1955.
The questions have already begun, of course: "Do the new forms provide more coverage than I have now? Are they more restrictive? In what way? Are they easier to understand? How soon do we get the new version?"
The answers will vary; most of the changes are subtle and much depends upon how good an insurance program you have now. The printed policies remain starting points from which your insurance representative can tailor things to suit your requirements through use of endorsements. As such, the new version is undoubtedly an improvement.
Summary of Changes
The most obvious change is one of format, which permits considerable flexibility in arrangement of printed material and schedules. Some companies will be using a policy jacket containing definitions and general conditions common to separate attachments called coverage parts. It is still important to be sure you have Comprehensive General Liability and Comprehensive Automobile Liability coverage, something NOT achieved by attaching separate coverage parts for the Manufacturers and Contractors Liability, Owners and Contractors Protective Liability, Completed Operations and Products Liability and other sections formerly comprising the old policy. In other words, this is one case where buying the five separate parts of the old policy does not give equivalent coverage. Insist upon the broadest form available.
Close examination of the editorial revisions reveals an earnest attempt at clarification, successful in my opinion, without abandonment of the traditional and still complex string of insuring agreements, conditions and exclusions. As reading matter there isn't much plot. More than stubborness accounts for clinging to traditional language, however, it is important to insurer and insured alike to know how the courts will interpret a phrase based upon past decisions. The old phrases have that advantage.
Substitutions of "caused by an occurrence" for "caused by accident" for both Bodily Injury and Property Damage Liability in the printed policy form is the most apparent improvement in coverage heretofore available only by special endorsement. It will pay to become familiar with the new definition of occurence.
Unfortunately, Contractual Liability coverage for hold-harmless agreements is still not included in the basic policy. You must specifically insure each such contract as it comes up or arrange to buy coverage on a Blanket basis for extra premium.
Allowance is made for reasonable expenses incurred by the insured at the insurance company's request, for the first time including actual loss of wages or salary (but not loss of other income) not to exceed $25 per day because of his attendance at hearings or trials.
The policy territory is logically broadened to include not only (1) the U.S., its territories or possessions, or Canada, but also (2) international waters or air space (excluding bodily injury or property damage in the course of travel or transportation to or from any other country, state or Nation) and (3- anywhere in the world as respects products sold for use or consumption within the territory described in (1) if the original suit for bodily injury or property damage is brought within the U. S., its territories, possessions or Canada.
There is a most welcome clarification of what is covered or excluded under new difinitions of "auto-