February 8, 2011
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follow up on insurance - personal liability - who is insured
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Hi Ken,
In response to the question about E&O insurance covering “personal” liability: one thing to keep in mind is that it is pretty typical for the definition of “who is an insured” to not only cover the company name (in the case of a corporation) but also the officers, directors, their spouses and employees, so as long as their liability is related to the alarm company’s operations.
Here is a section from a policy specifically designed for the alarm industry:
SECTION II – WHO IS AN INSURED
1. If you are designated in the Declarations as:
a. An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner.
b. A partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business.
c. A limited liability company, you are an insured. Your members are also insureds, but only with respect to the conduct of your business. Your managers are insureds, but only with respect to their duties as your managers.
d. An organization other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders.
e. A trust, you are an insured. Your trustees are also insureds, but only with respect to their duties as trustees.
It also goes on to offer some *limited* coverage for volunteers as well as organizations you acquire, but that can be the subject of another discussion.
Thanks,
Larry St John, CIC
Eclipse Marketing & Insurance Services
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Providing home security insurance certificate
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Hi Ken,
In response to Louis about Insurance Certificates - we like to deal directly with the Insurance Carrier. The reason for this is to make sure we have proper Insurance Company contact information in the event that we cancel the customer for non-payment or they do not renew a contract. One way to get delinquent Customers to pay their bill is to refuse to send an Alarm Certificate until they are current with their monitoring. If an Alarm Certificate is sent to the Homeowner they can stop monitoring and continue to have a discount with their Insurance Carrier and you are on the hook with no recourse. If they do not pay and they have been canceled it is your obligation to notify their insurance carrier that they system is no longer connected to Central Station…..CYA,
Gene