Posts Tagged liability

Proof. It’s not always in the pudding.

If you never thought documentation
was that important, read on:

In a recent high profile legal case, a celebrity sued his insurance provider in an attempt to cover the losses he incurred when his son’s 2007 car accident injured a friend, and his limits on the policy were not sufficient to cover the friend’s settlement. The plaintiff had an auto policy with a limit of $250,000 per vehicle. Although, the plaintiff owned both cars involved in the accident, he fell short of the combined 500,000 limits, thus he had to cover the excess out of pocket.


The plaintiff’s lawsuit alleged malpractice, claiming that his insurance broker should have protected his substantial assets with an umbrella policy.

The outcome:

The lawsuit was dismissed. The celebrity had to accept a nuisance settlement offer just to avoid paying his insurance broker’s legal costs.

Why? The insurance broker had proof; documentation showing that not only had umbrella coverage been offered to the plaintiff’s now ex-wife, but it had been offered several times, the last of which was only four days prior to the accident.

The proof turned an otherwise costly case for the insurance provider into a seemingly frivolous lawsuit. Without proof, the plaintiff may very well have won.

As insurance agents and brokers, you’re working in an industry directly related to preventing or recovering financial loss — as this example demonstrates, proof and documentation are essential.

Gaps in coverage can be detrimental. A responsible broker will look for said gaps and provide a recommendation for filling them. And, in many instances, doing the right thing by recommending additional coverage could also result in increased revenue. However, recommending appropriate coverage doesn’t always mean the client will pay attention to the advice given. 

If you’re not already doing so, UIG recommends checking with your clients on an annual basis (at a minimum) to assess their current coverage and situation and look for any gaps.

In this age of smartphones, email and social media, it’s easier than ever to communicate with your clients as well as to document when you touched base and the topic you discussed. It will not only help you make sure your clients are properly protected, but it will help protect you, just like it protected the broker in this case.

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Garage Liability Q&A

Garage and auto related operations are unique with respect to the exposures they present. The lines between the general liability for the operations side of things and the automobile liability can blur in several areas.

Lately we’ve received several inquiries regarding Garage insurance. So we thought we’d share some of the most commonly asked questions and their answers.

Q: What is included in Garage insurance coverage?

A: The Garage policy was developed to provide comprehensive liability coverage to protect both the general liability and automobile liability exposures in one neatly packaged policy, as well as protect from gaps that would otherwise leave this type of operation exposed to potential claims.

Q: Do you have markets for Garage coverage and what are they?

A: Yes, UIG has established partnerships with a variety of providers for Garage coverage. To find the provider in your area, please email or give us a call at 800.385.9978.

Q: Does Garage Liability include Premises Liability?

A: As a basic package, Garage coverage contains premises liability coverage along with products liability coverage, automobile liability coverage and physical damage protection to vehicles. Premises liability, in particular, will provide coverage for injuries suffered at the shop. For example, if a customer slips and falls while walking through the repair bay to talk to the mechanic, the shop owner’s insurance company will pay for medical care up to the policy’s specified limit.

Q: Are there any special supplements that are needed to quote Garage Liability coverage?

A: Each carrier will have its own application. At UIG, we feel that it may be more beneficial to always complete a Specialty Garage application in addition to the basic Garage Liability application, as it will address a broader range of questions to get to the best quote. Special supplements can include:

  • 177569007wholesale automobile dealers
  • new and used car dealers
  • bed liner installation
  • golf cart dealers
  • valet
  • heavy truck repair
  • motorcycle dealers
  • motorcycle repair
  • heavy truck dealers
  • recreational vehicle
  • detailers
  • and many more

For a supplemental app, please email or contact UIG at 800.385.9978.

Q: What types of Garage risks can UIG provide coverage for?

A: UIG provides coverage for many garage risks including, but not limited to:

  • auto repair
  • motorcycle repair
  • recreational vehicle repair
  • wholesale auto dealers
  • alarm/stereo installation
  • windshield installation/repair
  • used car dealers
  • body shops
  • car washes
  • detailers
  • auto upholstery
  • valet
  • auto storage

Q: What is the minimum premium for Garage?

A: Minimum premiums generally range from $750 – $1,000.

Q: What are some of the Garage requirements?

A: General requirements can include:

  • Drivers must be at least 18 years old with no known physical impairment seriously affecting the ability to drive safely.
  • Drivers must have a valid United States driver’s license from the state you are operating out of.
  • The driver’s surcharge for any individual for the prior three years must be submitted if over 1.60.
  • Owners/Partners/Officers and their spouses and employees are the only drivers allowed to use a vehicle for personal use and must have at least five years driving experience, confirmed by their MVR.
  • Liability limits for any driver under the age of 21 will be reduced to statutory limits.
  • Motor Vehicle Reports (MVR) within 30 days of binding or with the addition of new employees; UM/UIM Rejection. UIG can assist with ordering MVRs as most insurance companies are no longer able to provide this documentation.
  • After binding, completion of a Loss Control Inspection.

Q: How is a Garagekeeper’s limit or a car dealer’s open lot limit determined?

A: While both of these groups have slightly different coverage needs, the insured may want to insure 100 percent of their inventory value to avoid possible co-insurance penalties in the event of a loss.

To determine a coverage limit, in simplest terms, find the “lot limit” (value of all vehicles on the lot combined) as well as the “per vehicle limit,” including the average and maximum value of any one vehicle.

Q: Do Garage policies need to be audited? If yes, how often?

A: All garage policies are subject to audit — either physical or voluntary — when garage exposures change during a policy period. For example, a change in the number of employees or higher value autos may cause an increase in the garagekeeper’s limit. However, all policies with a premium of $5,000 or higher will be automatically audited on an annual basis. For premiums less than $5,000, audits are normally ordered every three years, but the timing is generally up to the policyholder’s discretion.

Any time you get a large number of cars in one place, the need for insurance is high. Unfortunately, the higher risk can carry higher premiums. Fortunately, UIG’s comprehensive garage program can give your customers great coverage at a reasonable cost.

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There Ain’t No Cure for the Summertime Blues

Although we look forward to the summer weather, when it comes to liability, the warmer months are not always fun in the sun. The season can bring with it some particular challenges that your clients will want to be mindful of.

Workers’ compensation

We’re all aware that Worker’s comp provides coverage for a business if an employee is injured while and because that employee is working. However, the same rules do not apply for a summer event. An injury that occurs while an employee is voluntarily participating in an employer-sponsored athletic event or team generally is not compensable. Should litigation arise from an injury incurred during a social event, the outcome in that context will depend upon factors such as the extent to which the employer sponsors, controls or participates in the activity or whether the employer requires participation.

We’re not recommending that a business not hold special summer activities as they can contribute to improvement in employee health and morale. We are saying, it’s important to help your clients understand the extent to which their Worker’s compensation coverage protects them and the instances that it does not.


Summer parties, particularly where alcohol is served, can be the cause of claims of sexual and other forms of harassment. Employers should think through how summer parties will be conducted and might consider a harassment refresher before the event. Not to mention reviewing their liquor liability coverage and possibly securing employment practices liability insurance (EPLI). This coverage can help protect a business and the business owner from litigation resulting from improper workplace behavior, including, but not limited to, sexual harassment, discrimination or wrongful termination.

Unpaid interns

Interns can bring significant value to a company. The balance, though, is that companies must exercise caution and be careful to ensure that there is a clear difference between an intern and a regular, compensated employee. Otherwise, business owners could be looking at several unexpected expenses.

The circumstances under which a business can utilize “unpaid interns” or “volunteers” are very limited. As with independent contractors, simply classifying individuals as “unpaid” or “volunteer” doesn’t mean that’s what they actually are.

Even if a college student agrees to the terms of an unpaid internship, it does not mean that they can’t later come back and seek unpaid wages after the internship is complete. And, if the environment in which they were working doesn’t meet certain criteria, they could win their argument because of Fair Labor Standards Act (FLSA) violations.

Generally, an internship position may be unpaid if six criteria are satisfied:

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;
  • The internship is for the benefit of the intern;
  • The intern does not displace a regular employee, but works under the close observation of existing staff;
  • The employer that provides the training derives no immediate advantage from the activities of the intern and, on occasion, the employer’s operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the completion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

These criteria, developed by the U.S. Department of Labor, are good guideposts for employers to follow, although individual states may have their own unique requirements.

Although our minds may tend to go on summer vacation, proper insurance coverage never should. Doing a little seasonal “legwork” to help ensure insurance policies are keeping pace with client activities can make all the difference.

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