Oak Tree Insurance
503.635.3303 | 800.394.9899
5335 Meadows Rd. Suite 101 - Lake Oswego, OR 97035
Fax:(503)635-7491  info@oaktreeins.com
 







  
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EXPLANATION OF INDEMNIFICATION
When insurance policies are written on an "indemnification" basis, the insurance company will reimburse the insured for claim costs already paid. Technically, the insured must not only suffer a loss, but must also pay the loss before being reimbursed (indemnified) by the company.
INFLATION GUARD COVERAGE
This coverage extension automatically increases the building amounts of insurance by 2% per quarter. This is done at no additional cost and is an attempt to keep pace with inflation.
 INLAND MARINE COVERAGE
Inland marine insurance indemnifies loss to moving or moveable property and is an outgrowth of ocean marine insurance. Historically, ocean marine insurance held the transporter responsible for property loss before, during, and after the completion of the voyage. In the 1800's, the non-ocean portion of the journey grew as cargoes were transferred to barge, etc., and the term "inland marine" was coined. Inland marine policies became known as "floaters" since the property to which coverage was originally extended was essentially "floating."
INTERNATIONAL INSURANCE
     COVERAGES/EXPOSURES
Foreign Coverage is needed by companies that conduct business overseas. This includes importers and exporters. To qualify, you must be a U.S. commercial business selling, traveling or consulting overseas.
Examples of Overseas exposures:
1. Export/Import
a. Sales overseas
b. Exhibitions or trade shows
c. Overseas Licensing
d. Overseas Salesmen
e. One source of products
f. Transit or shipments
2. Sell Services Overseas
a. Contracting services
b. Consulting services
3. Manufacturing Abroad
a. Overseas facilities
A single policy is all that is needed for all coverage’s. When purchasing a policy, at least 2 of the coverage’s available must be included. A list and brief explanation of these coverage’s follows:
Premises & Product Liability
This is broad coverage, protecting spouses, employees and vendors. It also covers newly acquired organizations for 90 days. This provides for defense, settlement and investigation into suits involving bodily injury, property damage, personal injury and advertising injury. Suit must be brought outside the United States and Canada.
Automobile Liability
Covers for owned, hired and borrowed cars when overseas. Admitted Auto liability insurance carriers overseas have very limited coverage’s. This coverage is broader and provides greater limits which are stated in familiar language. This provides primary and excess auto liability limits.
Workers Compensation and Employers Liability
Unless coverage is mandated by a Federal statute such as the Defense Base Act, International Workers Compensation insurance is a voluntary but necessary purchase. This is intended to cover staff traveling and permanently working overseas. Although these employees may be covered by the domestic workers compensation coverage’s, they may not be covered in whole while working in a foreign country. The foreign worker's compensation endorsement is not available in New Jersey. Under the International Policy, coverage’s:
1. Are primary
2. Are 24-hours per day when traveling abroad
3. Do not exclude terrorism, civil war or war
4. Provide 24-hour endemic disease coverage
5. Provide worldwide Employer Liability protection
6. Provide repatriation expense
Property including Transit
This covers samples or equipment in the possession of a salesperson and inventory either in transit to or within the foreign country. Ocean marine will not cover these items while either in transit or when on exhibition at trade shows. Business personal property and real property coverages are also available.
Confiscation and Civil War
Anyone who has goods abroad runs the risk of having them confiscated by foreign governments in certain situations or damaged/destroyed in a civil war. This coverage covers the insured goods that are being stored, exhibited or transported with foreign countries. The insured will be covered against direct physical loss of his goods.
Kidnap and Ransom
Media reports of the kidnapping of businessmen traveling or working abroad underscore the importance of having adequate insurance to meet possible ransom demands. This coverage provides for expenses incurred in negotiating the release of hostage or in making payments demanded in other types of extortion cases.
Crime
The risk of employee theft, loss of money and securities on foreign premises or in transit abroad and depositors forgery exists. Crime coverage protects you against these exposures. It also allows you to offer your inventory records and physical counts to support the amount of loss claimed when there has been a loss through employee theft.
Business Interruption
The package can protect against loss through loss of foreign royalties coverage. This coverage protects against the second contingency through loss of income coverage. This also protects you against the extra expenses you incur in continuing your business after suffering physical loss or damage to his own property. You can also be protected for contingent business income from physical loss or damage to your supplier's property.
Listed below are examples of claims that have occurred during overseas travel:
Premises Liability: A U.S. businessman, while staying in a hotel in China, negligently caused a fire while smoking in bed. The fire resulted in the death of ten individuals and extensive hotel damage. The U.S. businessman was brought to trial in China on both criminal and civil charges. After a lengthy and costly trial, he was sentenced to 18 months in prison and was ordered to pay $52,000 in damages.
If the U.S. businessman has had an International General Liability policy, any bail bonds, civil court costs and resulting civil penalties may have been paid under this coverage. Domestic CGL policies would not have responded because of territorial limitations on the policy.
Products Liability: A U.S. manufacturer of acne cream products had worldwide sales. A woman in South America suffered eye irritation, the cause of which was traced to the U.S. manufacturer's product.
The claim was settled before it went to trial. However, had it resulted in a suit, the policy would have paid the defense costs and any resulting judgements against the manufacturer.
Difference in Limits and Conditions: An insured, while on business in Korea, rented an automobile and accidentally struck and seriously injured a pedestrian.
The local liability policy on the rented vehicle provided $50,000 in limits. The non-owned/hired automobile liability portion of the policy paid damages which exceeded $50,000. Under the supplementary coverages, the company also paid for the insured's bail bond. There was no coverage provided under the local policy.
Endemic Disease: An individual with Foreign Voluntary Workers' Compensation coverage contracted malaria while installing satellite dishes in Africa. Originally, the insured was incorrectly diagnosed and treated for hepatitis. Eventually, a correct diagnosis of malaria was reached and the disease was cured.
Both hepatitis and malaria are considered endemic diseases; that is, they are common to particular regions of the world. The state of New Jersey offers coverage for occupational disease, but may not cover endemic disease. The company paid this claim, as the Exporter's Package is designed to cover endemic disease. The company also paid for medical expenses until the insured was cured. Domestic Workers' Compensation probably would not have responded to such a claim.
Protection of Experience Modifier: An insured temporarily in Mexico on business accidentally shut his finger in a taxi cab door, resulting in the finger being severed.
The insured's medical expenses were paid for by the company through the Foreign Voluntary Workers' Compensation coverage. In so doing, The insured avoided filing the claim through the state Workers' Compensation Board, not knowing if the claim would be approved or when the decision would be made final. In addition, the insured prevented the claim from negatively affecting their domestic workers' compensation experience and, hence, protected their domestic experience modification.
24-Hour Coverage: An individual, while temporarily working in Haiti, was killed in a late night auto accident.
The widow of the deceased filed a Worker's Compensation claim against the State of Florida, which was denied since the accident occurred after business hours, and the employee was deemed not to be within the scope of his employment. If this individual had had Foreign Voluntary Workers' Compensation coverage, full death benefits would have been paid to widow by the company.
If you determine that you have such exposures, then you should obtain International Insurance.
The following are examples of what can happen to U.S. companies when liability suits are brought overseas and their domestic coverage’s do not respond:
1. The Company's assets can be impounded in the form of:
a. Accounts Receivable
b. Demonstration Floaters
c. Salesmen's Samples
d. Work in Process
2. A manufacturer can be denied access to the market and therefore, all his future earnings.
3. Distributors may be forced to pay judgments:
a. In turn a suit may be brought against the U.S. manufacturer in the U.S. by the distributor.
b. Distributors can use their contacts to alienate the U.S. Corporation with the local market {within the European common market}.
4. The U.S. Government may be asked to enforce the principle of law known as Comity thereby forcing the U.S. Corporation to respond to a foreign judgment.
JOINT LOSS AGREEMENT
This endorsement is intended to facilitate payment of insurance proceeds when there are two different carriers for the property and the boiler and machinery coverage and there is a disagreement as to the amount of loss to be paid by each carrier.
JEWELER'S BLOCK COVERAGE
(1) Covered Property
This insurance covers the insured's stock, property left with the insured for repair or other purposes, and the insured's interest in and legal liability for property on memorandum or consignment from others in the jewelry trade.
(2) Covered Perils
The policy is written on a "special" form. Some of the more prevalent perils covered are fire, open stock burglary, inside and outside holdup, safe burglary, theft, pilferage, kidnapping, shoplifting, window smashing, damage or loss of salesman's samples in transit, loss in transit by registered mail, water damage, sprinkler leakage, and smoke damage.
(3) Exclusions
The principal exclusions are loss caused by war or nuclear reaction; loss or shortage disclosed on taking inventory; loss from unattended vehicle other than common carrier vehicle; loss during shipment other than by registered mail or under receipt by armored car service, passenger bus line, or customer parcel delivery service; loss at insured's premises caused by earthquake or flood; loss caused by dishonesty of anyone to whom property is entrusted; damage sustained while property is being worked on; and damage sustained while property is being worn, except watches worn solely for the purpose of adjustment.
 
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