May 2014

The difference between personal automobiles and business automobiles is the name under which it is titled. If you use your personal automobile in business, the business should have hired and non-owned automobile coverage to cover the business’ liability of your driving.

If the business owns the car, you should either have a personal automobile policy or a “drive other cars” endorsement on the business policy to cover your liability for driving a company car. The car owner and driver are often both sued.

So, what’s the difference between Commercial Automobile and Business Automobile?

Commercial automobile coverage includes several policy forms. Garage, business auto, and motor carrier are each forms of commercial auto.

Business automobiles are cars, pick-ups, small trucks, large trucks, dump trucks, even ambulances can be on the fleet list. Business automobile is for standard usage owned vehicles for businesses.

Garage forms are used for public repair shops, dealerships, attended parking lots, any other situation where the general public might drive the business vehicle or you have care, custody or control over other people’s vehicles. The risk is different from business auto because either the cars or drivers do not belong to the same organization. Garage liability also covers towing other vehicles.

The garage form, simply stated, anticipates the owner of the vehicle and the operator will be different people on a regular basis, as part of the business.

Motor carrier forms anticipate different ownership of either the power unit or the trailer it hauls. The nature of long haul trucking is independent contractors “owner operators” hook to other business’ trailers and move them from one spot to another.

Motor carrier coverage is designed to cover the nuances of the independent operator system. Long-haul trucking has different exposures than the average salesman’s vehicle, and needs different coverage.

Of course, these commercial forms can confuse. Please call us today to assure you are covered properly. We appreciate your business.

Business equipment covers a variety of assets. Word processing, production machinery, air conditioners, boilers, even bulldozers and excavators describe business equipment. So let’s answer this question by going through the different property policies.

1. Contents policy. This coverage, generally found in the property section of your package policy (general liability and property combined), protects you from losses due to covered perils (fire, lightning, smoke, hail, windstorms, civil commotion, and others). Generally, office equipment, laboratory equipment, production equipment or any other device or machinery that stays on location is best covered under contents. The policy is designed for exactly this purpose.

1. Inland Marine. This policy form covers the property value of equipment that moves. For example, construction equipment like backhoes or bulldozers travel to and remain on jobsites. Contents policies limit the value of some types of property off premises; inland marine allows transportation and off-premises usage.

1. Boiler and Machinery. This property coverage has elements of liability as well. Basically, boiler and machinery policies provide an inspection service for equipment to assure it is in good working order. Then, if a boiler breaks down or explodes, the policy covers damage caused to others and mechanical breakage of the boiler.

1. Cargo. This policy covers your property while in transit. For example, if your shipping machinery across the country or an ocean. Contents policies have exclusions and low limits on in-transit goods. The policy does not anticipate this type of risk. Cargo policies do, and they are designed around freight carrier responsibilities in the event of a loss.

Property coverage seems like it’s simple, but many subtle clauses create niche coverage issues. Call us today!

Boiler and Machinery policies provide two major services. Insurance in the form of property coverage for damage to buildings, boilers, machinery and additional liability coverage in the event of an explosion. Second, a valuable inspection service for the covered property, which enables mechanical breakdown coverage to be provided.

This coverage is not available under other insurance policies. In many insurance companies, boiler and machinery has been re-titled equipment breakdown to reflect the more modern application.

Mechanical breakdown insurance provides loss of refrigeration coverage for food spoilage, loss of revenue due to emergency generator malfunction, and extra expenses to keep the operation temperature controlled during machinery outages. Good loss control in these matters begins with avoidance – well running machines.

The inspection service meets requirements of local and state authorities. More importantly, the inspector gives solid loss control advice to avoid the breakdown of machines and boilers at inconvenient times. The inspectors review the system as a redundant check on the owner’s own maintenance program. Losing power, heat, cooling, or ventilation creates production problems for any business.

Boiler and Machinery coverage applies to almost any business. The image of huge steam boilers may come to mind, but refrigeration, modern HVAC systems, or emergency power generators should instead. Think turbines, engines, fans, all the gears and shafts which make them work, and any other mission critical machinery. Think about heat pumps, air conditioners, even elevator equipment.

Ask your professional agent to help compile a list of equipment that may be exposed to mechanical breakdown to the detriment of your operations. It is likely that your company has an exposure that is not being properly addressed. With this coverage, the loss to the equipment is secondary to the consequential loss of income or the extra expense brought on by the mechanical breakdown. Your professional agent can help you design the correct coverage.

Since new legislation is passed affecting employment practices liability yearly, we can only broadly describe areas of concern:

1. Discrimination Claims come in three forms: overt discrimination, disparate treatment, and disparate impact. Overt discrimination is purposeful and observable behavior, like firing all employees of one sex, age limit, or race. Disparate treatment concerns disciplinary actions for the same behavior. Perhaps women are written up if they’re late to work but men are not. The treatment is unequal and prevents moving upwards in the organization. Disparate impacts involves creating rules or conditions that affect one group more than others. For example, the men’s locker room is located within the confines of the plant while the women’s is a quarter mile away; then allowing only five minutes for bathroom breaks, or not allowing people in to change until fifteen minutes before the shift. The more subtle forms of disparate impacts include height and weight limits. For example only hiring people above six-feet tall or below five feet five inches. Certainly the pool of candidates would show sexual preference. Unless there is an excellent reason why height is a factor, this is discrimination. What’s the cost? About $500,000 per settlement.
2. Wrongful Terminations. For cause terminations and strategic layoffs aside, firing employees has become a difficult process for employers. Even in at will states, employers cannot be arbitrary or capricious in firing individuals. Courts have upheld the doctrine that an implied contract of employment exists and must have cause for termination. Document and write-up employee behavior.
3. Sexual Harassment. Unwelcome sexual advances, explicit or implicit, is unlawful discrimination. Disparate treatment and impact cover this form of discrimination too. Interesting in these cases, discomfort, not dismissal is all that is required for sexual harassment to occur. And, neither party involved directly needs to bring the action, just a bystander who objects to the behavior can make a claim. Keep sex out of the workplace.
4. Retaliation Claims. Legitimate actions by an employee are punished with dismissal, wage freeze, or some other retaliatory act.

Other disagreements over such things as overtime wages, improper distribution of email content (if you wouldn’t want to see it on the evening news, don’t send it), or even mass layoffs can start discrimination suits.

Employment Practices Liability is fast becoming a leading cause of claims. Get the right coverage. Contact us today!