FAQ
Commercial Lines
A company asked to name our company as an additional insured. What does that mean?
By naming another entity as an additional insured in effect splits your limit of liability with that insured. Also, your insurance may have to provide defense in a place where they may not have had negligence.
Who needs Workers Compensation insurance?
Each state has different requirements, but workers compensation insurance is needed for all churches. It is not subject to a deductible and includes medical payments for all employees as well as disability until the employee can return to work.
What does an insurance value or coinsurance clause mean in a commercial property policy?
The insured is insuring a percentage of the replacement cost. However, there is sometimes a penalty involved. If the policy contains a coinsurance clause the insurance carrier will not pay the full amount of any loss if the value of the covered property at the time of the loss is greater than the limit of insurance times the coinsurance percentage. For example, the value of the property is $250,000 and the coinsurance percentage is 80%. This means that you agree to carry $250,000 x 80% or $200,000 limit of coverage.
If the limit of insurance on your policy is only $100,000, you could be penalized by 50% of the amount of the actual loss. ($100,000 coverage carried divided by $200,000 coverage that you should have carried = 50%) If your loss is $40,000, your claim payment will be only $20,000, less your deductible, due to the 50% penalty.