Know what your insurance policy covers

By John Cates

For most people, trying to read an insurance policy is like trying to read Greek.

Insurance coverage on the many different aspects of a business is often obtained through a phone call to an insurance agent. During this conversation, the business details the type of coverage it would like and soon after an insurance policy is issued. When the business receives the policy, generally it is not read; if it is read, it probably is not understood.

I recently represented the owner of a small business who used vehicles in the operation of his business. One of the vehicles was also used by the owner as his personal automobile. He and his wife had no other vehicle. The business paid for liability coverage and uninsured, underinsured and medical payments coverage. Payment for this coverage had gone on for years.

Then the owner of the business was seriously injured in a crash. The owner of the other car did not have enough insurance to cover his injuries. When the business owner made a claim against his own insurance company under the underinsurance and medical payments portion of his policy, his claim was denied. Because only his company was named as an insured under the policy, the owner was denied underinsurance and medical payment coverage, despite the fact that the company had been paying premiums for this coverage for years. The policy was written so that only the company was covered, not a person.

Coverage issues arise more often than one would think. Insurance policies oftentimes have so many exclusions and modifiers that after reading them you are left to wonder what they in fact do cover. It is important to make sure that insurance policies are read by experienced people to ensure that what the business thinks it is buying is what they are getting.

Most business insurance policies will cover injuries that occur on the business premises, if negligence can be established on the part of the business. It is important to review your insurance policy to determine whether there are any exclusions for this type of coverage. Liability on the part of the business can be established through the common law of negligence or through the violation of a "safe place" statute. It is important to understand what the "safe place" statutes provide so that business owners can determine whether their policy covers such violations.

If a business has a number of claims made against it as a result of injuries that occur on the premises, this will ultimately increase the rate of premiums, regardless of whether the business is ultimately found responsible. It is important for businesses to make periodic inspections of their business premise with an eye for safety. For the amount of time it takes, it may be well worth it.

Be sure to find out whether the insurance you are paying for covers you for the things that you expect it to cover.

John Cates is an attorney at Gingras, Cates and Luebke

Know what your insurance policy covers

By John Cates

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