Masonry Magazine April 1967 Page. 8
Insuranance For Contractors
(Continued from page 7)
Property damage caused by an occurrence. This insurance, which is purely excess over any applicable primary coverage the owner may have, protects the employer if the employee has no insurance on his car, or where his limits prove to be inadequate. Note that it affords no protection at all to the owner of the automobile.
For premium determination purposes, all employees of the insured are grouped into two classes; (1) those whose duties involve regular use of personally owned automobiles for business purposes and who receive some sort of reimbursement for such use, and (2) all other employees. Class one premiums amount to several dollars per employee; the class two rate is several cents per employee.
Purchase of Non-Ownership Coverage does not mean that certificates of insurance are unnecessary, but rather that such evidence of coverage from the employee-owner is not required before the employer is protected. So far as practical, continuing efforts should be made to confirm that all class one employees are adequately insured and stay insured.
In the event of an accident involving one of these cars, the employee will be held first responsible for any injury or damage, and his family policy insuring agreement is broad enough to provide primary protection for the employer as well. But, with $10/20,000 or $20/40,000 limits, it would not be difficult to run into a demand or judgment in excess of those amounts, which means direct involvement of the employer in such loss. Personal automobile limits should be high enough to (1) protect the employee himself, (2) keep the employer's insurance costs down, and (3) avoid unpleasant subrogation action against the employee, technically permitted by policy conditions.
Example
A contractor at a job site, finding his supply of materials getting low, sent his foreman out to pick up more. The employee took his own car and on the way struck a pedestrian, both he and his employer being named in the subsequent suit. It then became apparent that the employee had no Liability Insurance.
Employers' Non-Ownership Liability Coverage defended the employer and settled the loss. A happy ending, but the claim cost went into the contractor's overall premium-loss record with his insurance carrier and inevitably resulted in somewhat higher premiums over the next few years.
LIMITS OF LIABILITY
The Comprehensive Automobile Liability Policy provides for one Bodily Injury limit per person, another per occurrence. Property Damage Liability is subject to one limit per occurrence. Where General Liability exposures are combined in a single policy, two independent Insuring Agreements and sets of limits may be stated, or they may be combined into one at the carrier's option.
POLICY EXCLUSIONS AND LIMITATIONS
# A-"Caused by an Occurrence"
Again, we list the occurrence definition as a limitation of coverage, although it is considerably broader than the old, "caused by accident" restriction.
In the case of Automobile hazz.ds, the subject is usually academic, since most liability claims arising from ownership, maintenance or use of an automobile are clearly traceable to a definite time, place and cause. An occasional exception does occur, however, and the new insuring agreement is a decided improvement.
# B-Definition of Automobile
Although the Comprehensive Automobile Liability Policy form is broad enough to cover all of the named insured's automobile exposures, whether owned, hired or non-owned, there is some limitation in defining exactly what kind of mobile equipment is an automobile. This is of particular importance to contractors.
For example, aside from passenger cars, trucks, truck-type tractors, trailers, semi-trailers and similar land motor vehicles designed for travel on public roads, the new automobile policy excludes "mobile equipment," defined as:
Land motor vehicles, whether or not self-propelled:
(a) not subject to motor vehicle registration, or
(b) maintained for use exclusively on the insured's premises, including ways immediately adjoining.
or
(c) designed for use principally off public roads, or
(d) designed or maintained for the sole purpose of affording mobility to equipment of the following types forming an integral part of or permanently attached to such vehicle:
pumps
power cranes
erators
concrete mixers
shovels
road construction equipment
loaders
road repair equipment
diggers
air compressors
drills
spraying equipment
graders
building cleaning equipment
scrapers
geophysical exploration equipment
rollers
well servicing equipment
welding equipment
Use of such mobile equipment is covered without gap under the insured's Comprehensive General Liability Policy. Deciding exactly where to draw the line is often difficult; to eliminate possible disagreement between Automobile and General Liability carriers at the time of loss, both coverages should be written together wherever possible and at identical limits of liability. In that case, any question of which policy applies is purely academic and of no concern to the insured.
# C-Loading and Unloading
The standard Automobile policy form includes bodily injury and/or property damage resulting from loading or unloading of automobiles as defined. We list it as a limitation here because at some stage of loading and unloading operations, Automobile coverage ceases to apply and General Liability coverage takes over.
WHEN?
(Continued on page 36)
MASONRY
April, 1967