Other Coverages Definitions

Auto, Broad Form Driver Other Car (D.O.C.)
If someone who drives a company vehicle has no car of his own, he or she is unlikely to have a personal auto insurance policy.  Therefore, he or she may not be covered while driving someone else’s car in an activity unrelated to work.  Coverage can be added to the Business Auto policy for driving someone else’s car.

Auto, Damage to Rental Cars
You have protection in case an employee injures someone or damages someone’s property while operating a rental car.  Damage to the car itself is not covered, but coverage is available by endorsement.  The endorsement available to provide coverage for physical damage to the rental car normally excludes coverage for “loss of use” and “depleted value” even though in some cases the rental agreement will require that coverage for these losses be provided.

Computer Fraud (Theft and Funds Transfer)
Compensates for losses caused by computer theft or funds transfer fraud of money and / or securities.

Credit Insurance
Coverage is available to protect your company against bad debts resulting from your customer’s inability to pay for your products.  Insurers are selective and minimum premiums start at $5,000 to $10,000.  This coverage can reduce your risk of selling in the international marketplace.

Employee Dishonesty
Embezzlement or theft of property, money or securities by an employee is not automatically covered.  This exposure can be insured under a crime policy.  In addition, if you have a 401(k) plan, ERISA requires that you carry this coverage in a amount equal to 10% of the assets of your plan subject to a maximum of $500,000.

Equipment Maintenance
Allows for the bundling together of all equipment maintenance contracts into one program and limits the responsibility and administrational burden in equipment maintenance.  Has a fixed guaranteed annual budget with various options available to provide more comprehensive coverage, eliminate gaps and uncertainties. 

ERISA Bond
Covers the acts of theft from employee benefit plans.  These acts are deliberate and fraudulent and do not involve acts related to negligence.  Companies are required by law to purchase an ERISA Bond with limits equal to 10% of the plan assets, but the limit never has to exceed $500,000.  This is frequently included under a Crime / Employee Dishonesty Bond / Policy.

Extortion, Kidnap and Ransom Insurance
Wealthy and prominent individuals, as well as corporations, can be a target for extortion, kidnap and ransom.  Insurance can be purchased to cover ransom money paid following:

a)    a threat to injure an insured person, and
b)    a threat to damage the Insured’s property

Also covered would be all reasonable professional negotiator expenses including bodyguards, transportation and communication expenses.

The cost for this type of coverage is relatively modest.

Internet Liability Coverage
Increased use of the Internet has exposed even traditional businesses to new and different loss exposures.  Coverage is now available from a variety of insurers and can be tailored to cover for both 1^st and 3^rd party exposures.  Protection can be obtained for losses resulting from introduction of computer virus, loss of intellectual property, extortion, business interruption and extra expense, computer systems liability (including denial of service, damage to a 3^rd party’s system, theft of information and reputation rehabilitation).  Limits are available up to $50,000,000.  Programs are individually underwritten and priced based on a detailed systems risk analysis.

Patent Litigation Coverage
Insurance coverage is available for:

a)    defense of patent infringement allegation, or
b)    expenses related to enforcement of patents

Political Risk / Expropriation Coverage
Companies with worldwide operations are generally concerned with the potential for contract repudiation and / or expropriation of assets by a foreign power.  Insurance can be purchased to cover these exposures and reduce the uncertainty of operating worldwide.

Warranties and Representations
Specifically designed to insure representations and warranties and corresponding indemnity obligations in a corporation transaction.  Either the buyer or the seller, or both can be an insured under a representation and warranty insurance program.  The seller can “achieve piece of mind” after the transaction by purchasing this insurance and the buyer can buy Warranty and Representations insurance for itself in the event of a loss resulting from the seller’s breach of a warranty or representation in the asset purchase agreement.  The coverage is claims made and responds to claims made during the policy period for a breach of a warranty or representation.  The policy period can be any time period required by the purchaser of the insurance, but it typically is tied to the “indemnity period” specified in the asset purchase agreement.

Workers’ Compensation, Foreign Voluntary
Foreign Voluntary Workers’ Compensation / Employers’ Liability insurance can be tailored to provide benefits for U.S. workers abroad, local employees, and / or third country nationals.  It allows employees on temporary or extended overseas assignments to collect Workers’ Compensation benefits available in their country of origin.  It also includes coverage for repatriation (return of insured worker to their home country) and endemic disease.

The Employers’ Liability part of this coverage applies on a primary or excess basis, depending on local laws.  This coverage is underwritten based on:

1)    Number of trips under and over 30 days, and
2)    Payroll for U.S. workers abroad, Local employees and other Foreign Nationals.

Workers’ Compensation “Monopolistic” States
If you have employees in Washington, West Virginia, Wyoming, North Dakota or Ohio, you must obtain Workers’ Compensation coverage from the state.  We cannot add it to your program, but we can provide assistance if you notify us.

Maine and Massachusetts are other states that may require special handling.

Workers’ Compensation “Stop Gap” Liability for Monopolistic States
Workers Compensation policies for Monopolistic States do not provide Coverage B – Employers Liability.  “Stop Gap” endorsements can be added under the Commercial General Liability policy or the Workers’ Compensation policy.