The question of the month in the Dec Page pertains to the status of executive officers, partners, and sole proprietors in relation to workers compensation (WC) coverage. WC is usually thought of as a compensation system for employees who are injured in the course of employment. But, when the person injured is an executive officer, or a partner, or the sole proprietor of the business, is such a person considered an employee and covered by the WC system?

Since the workers comp system is a system subject to the laws and regulations of the individual states, whether executive officers, partners, and sole proprietors will be considered as employees is a subject that has to be examined on a state-by-state basis; some states allow these classes of workers to be exempt from the workers comp laws, while others make them subject to the laws. For a state-by-state summary of whether executive officers, partners, and sole proprietors are subject to the state WC laws, link onto the designated article in the FC&S Bulletins.

Also in the Dec Page is a checklist taken from an article entitled “Property Insurance Claims: Negotiating Unfamiliar Terrain” by Mr. William Rake, SPPA; this article appeared in Adjusting Today and is copyrighted by Adjusters International. The checklist posts over twenty points that insureds should know and follow after a loss has occurred.

The legal cases noted this month deal with various subjects: auto coverage; the total pollution exclusion; criminal acts and the duty to defend; policy limits versus state statutory minimum amounts; and the work product privilege. The auto coverage case involves the nonpermissive use of an auto by a fifteen-year-old and whether this is considered unlawful possession and thereby excluded from coverage. The total pollution exclusion is found to be not so total by a court in New York . Another New York court discusses a criminal act committed by an insured and whether such an act allows the insurer to deny its duty to defend. The issue in the policy limits case was whether the amount of insurance coverage available in a commercial auto policy was the state statutory minimum amount or the policy limit; the trial court in New Jersey entered summary judgment that the insurer was liable up to the full policy limits, and then, the appeals court weighed in. Finally, the work product privilege was analyzed by a court in Ohio based on a reservation of rights letter. Does a reservation of rights letter trigger a reasonable expectation of future litigation between the insured and the insurer, thus allowing the insurer to decline to produce documents requested by the insured in a related tort case filed against the insured?

Questions and Answers:

A diamond ring cracked but there is no way of knowing how it happened. Is this covered under an open perils personal inland marine policy or would the loss be excluded due to inherent vice exclusion? See Personal Inland Marine Loss. Garage employee damages a customer's auto while test driving the vehicle. Can the customer's auto carrier subrogate against the garage for the loss? See Subrogation Allowed Against Repair Garage?. These questions and answers can be found on Q&A page 1489.

If the insured rents a vehicle and turns it over to another person for use, and the vehicle is now missing, does the personal auto policy of the insured pay for that lost vehicle? See Reental Vehicle Coverage Issue. Are claims arising out of the use of snowplows covered under the CGL form? See [Snowplowing Claims and the CGL Form.xml^Snowplowing Claims and the CGL Form, Personal Lines Volume, Q&A section^Snowplowing Claims and the CGL Form]. These questions and answers can be found on Q&A page 1490.

After the insured has installed carpet at a hotel, the owner of the hotel wants it removed and replaced because the carpet patterns destroy aesthetic looks. Does the CGL form respond to such a claim? See [Property Damage Claim and Tangible Property Requirement.xml^Property Damage Claim and Tangible Property Requirement, Personal Lines Volume, Q&A section^Property Damage Claim and Tangible Property Requirement]. An insured is rated as an auto dismantler but also tears down buildings. This latter activity is not listed on the CGL policy. If a loss occurs while the insured is tearing down a building, would the CGL policy apply to the claim? See Scope of Coverage under CGL Form. Are off-road trucks that are not licensed covered for accidents under the CGL form? See [Vehicular Coverage under CGL Form.xml^Vehicular Coverage under CGL Form, Personal Lines Volume, Q&A section^Vehicular Coverage under CGL Form]. These questions and answers are on Q&A page 1491.

The insured rents a vehicle in Florida and drives it to New Jersey . The rental contract prohibited travel outside of Florida . Would the BAP apply to an auto accident that occurs in New Jersey ? See [Business Auto Policy and Out of State Loss.xml^Business Auto Policy and Out of State Loss, Personal Lines Volume, Q&A section^Business Auto Policy and Out of State Loss]. This item is on Q&A page 1492.

Directors and Officers Liability Insurance

Directors and officers of corporations may become liable for wrongdoing to stockholders or others, thus providing a need for insurance coverage to protect personal assets. An update of this article, which provides an overview of D&O coverage and issues surrounding this type of insurance, has been added to FC&S this month. See Directors and Officers Liability Insurance. The article is on the Specialty Lines Do- pages.

Index Update:

The Fire & Marine Index has been updated this month. This updating reflects the changes and additions that have been made in this volume over the past year. This will allow subscribers to more easily find the location of the various subject matters that are discussed and analyzed in the volume.