August 2013 Intro Page

Dec Page

The article of the month deals with the self-insured retention (SIR). This is a concept that is widely used and often misunderstood by insureds, insurers, and some courts. While its use has been linked historically to programs using commercial umbrella policies, the SIR is currently used throughout the primary level of liability protection with qualified self-insurance programs, fronting, and other financial risk management techniques.

The court cases noted in the Dec Page are from Ohio, Delaware, North Carolina, and Georgia. The Ohio case pertains to defective workmanship and whether that can be seen as an occurrence covered by the general liability policy or a normal business risk that is not covered by the CGL form. The Supreme Court of Delaware dealt with a case where jewelry mysteriously disappeared and the insurer would not cover the loss, basing its denial on the assertion that there was no physical evidence to show what happened to the jewelry. In the North Carolina case, the Court of Appeals discussed whether a release signed by the claimants allowed the driver that caused an auto accident to be held not legally responsible and so, released the insurer from covering the damage claims since the insured was no longer “legally obligated to pay”. The case from Georgia was about an action brought by the insured against his insurer seeking additional benefits under the homeowners policy after the property was destroyed by fire. The insured owned the property with his domestic partner as joint tenants and the insurer claimed this meant the insured's recovery was limited to 50 percent of the policy limits.

Questions and Answers

Would cracking or collapse as a result of pile driving a foundation be covered under a commercial property form? See Collapse or Cracking Caused by Pile Driving as a Covered Claim. Does the nonowned and hired auto endorsement include within its definition BI and PD that occurred on the insured's premises caused by a hired subcontractor's auto? See Nonowned and Hired Auto Endorsement Coverage. Are tenants' alterations to apartments for the purpose of cultivating marijuana covered under a BOP? See Unauthorized Alterations and Coverage under a BOP.

What constitutes vehicle upset, and how does it differ from overturn? See “Upset” and “Overturn” Are Not Redundant Terms.

Restaurants

An update has been made to the discussion of the ISO Restaurants Coverage Form, MS RS 01, of the market segments program. The wrap around endorsements of the program are used to enhance coverages provided by other standard forms. See Restaurants.

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