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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DEBRIS REMOVAL CLAUSE
This pays for the insured's expenses to remove debris of covered property caused by a Covered Cause of loss.  This does not include "pollutants" and must occur during the policy period and reported within 180 days of the occurrence.
DIFFERENCE IN CONDITIONS (DIC) COVERAGE
DIC insurance provides coverage designed to close specific gaps in standard insurance policies and is usually available only for larger industrial or commercial risks. It allows coverage to be customized to extend to such exposures as water damage, flood, collapse, earthquake, landslide, etc., according to the insured's needs. DIC coverage may be provided by means of a separate insurance policy or it may be added by endorsement to the basic policy.
 DIRECTORS AND OFFICERS (D&O) LIABILITY COVERAGE FOR NONPROFITS
In today's litigious society, the savvy nonprofit entity recognizes the need for D&O liability coverage. These are the facts:
  • Nonprofit organizations are not immune from costly litigation.
  • Nonprofit organizations are being sued more often and from more sources, despite laws in most states that limit the liability of nonprofit directors and officers.
  • Employment related suits for such things as harassment and wrongful termination are at an all-time high, especially since enactment of the Civil Rights Act of 1991 and the Americans With Disabilities Act of 1992.
  • Directors and officers are subject to the duties of diligence, obedience, and loyalty and can be sued for negligence in the performance of those duties.
  • A claim could threaten the personal assets of directors, officers, and trustees.
  • The financial burden of defending a D&O suit can drain a nonprofit organization's badly needed resources.
Who Sues Nonprofit Organizations?
Almost any day to day decision or action by anyone in the organization can trigger a lawsuit. Of all the lawsuits brought against nonprofit organizations, more than 50% involve employees. Even with the most diligent efforts to prevent employment disputes, the following claims can and are often alleged against nonprofit organizations:
  • Discrimination due to race, sex, age, national origin, religion, disability, or sexual orientation
  • Wrongful termination
  • Sexual harassment
  • Promotions and compensation
  • Interference with employment contract
  • Hiring decisions
  • Conflicts of interest
  • Libel, slander, and defamation of character
  • Failure to supervise employees
  • Invasion of privacy
  • Copyright infringement, misrepresentation of ideas, and unauthorized use of logos
Coverage is available that defends against all of those allegations and more, including claims brought by:
  • Donors who feel that their contributions have not been used to further the expressed aim of the organization.
  • Board members who disagree with a majority decision on the use of funds.
  • Beneficiaries who feel they are entitled to more than they received.
  • State Attorney Generals who institute legal proceedings against the board for issues such as mismanagement of funds and antitrust violations.
 DRIVE OTHER CAR COVERAGE
Coverage applicable to employees or executives of a company or any other person who is supplied a company vehicle, but who does not own a personal vehicle, thereby not having personal automobile coverage. An endorsement may be added to the automobile policy of the company that furnishes the automobile, giving protection while the named individual or a member of his family is driving a car borrowed from a third party (other than the vehicle named in the policy). Individuals who are owners of the company qualify for the "individual named insured" endorsement, which includes family coverage. The drive other car coverage is usually added at little additional premium charge.
EARNINGS (BUSINESS INTERRUPTION) COVERAGE
This form of insurance provides loss of income coverage (i.e., "disability income") for your business by replacing your operating income during the period when damage to the premises or other property prevents income from being earned.
It is by means of your operating income that your business meets its expenses of payroll, light, heat, advertising, telephone service, etc., and from which your profit is derived. If you suffer a business interruption and have to close for several months or operate at reduced pace because of fire or other perils covered by your Earnings insurance, this income will cease or be reduced.
For the purpose of this insurance coverage, "earnings" are defined as the actual loss sustained by the insured as a direct result of business interruption necessitated by damage or destruction of real or personal property. The damage or loss must be caused by the insured perils.
Furthermore, "business income" is defined as the sum of total net profit, payroll expense, taxes, interest, rents, and all other operating expenses earned by the business.
The amount of coverage your Earnings insurance provides is established on the basis of either amount of insurance or actual loss sustained for each 30-day period of necessary business interruption caused by damage or loss from covered perils. There are several ways to set up Business Interruption depending upon your particular business: Monthly limitations, coinsurance, maximum time period to be paid, etc.
In addition to Earnings insurance, it is also advisable to carry Extra Expense insurance (see separate coverage explanation).
ELECTRONIC DATA PROCESSING (EDP) COVERAGE
A Standard property insurance policy leaves something to be desired in addressing special EDP-related exposures. Electronic data processing equipment and its software is particularly susceptible to damage from electrical or magnetic disturbance and changes in temperature or humidity -- perils which are excluded in a standard "special" perils property policy. Except for prepackaged software programs, which are typically covered on an actual cash value basis, coverage for programs and data in a standard property policy is essentially limited to replacement with blank tapes or diskettes plus transcribing expense. Finally business interruption coverage in connection with damaged EDP Media {not equipment} is limited to 60 days from the date of loss or the time when the other damaged property is repaired, whichever is longer. Therefore, if the building repairs are complete, but normal operations cannot resume because replacement computer programs, data or media are not readily available, an uninsured business interruption loss may result.
The best way to resolve these coverage inadequacies for EDP exposures is to buy a special EDP policy. Typically, EDP policies provide "special" peril coverage similar to that provided by "special" property forms, PLUS coverage for all electrical and magnetic damage, mechanical breakdown and often temperature and humidity changes as well. Some insurers include these perils in the basic form, while others make them available by endorsement for an additional premium. Usually these broader coverage’s are subject to a higher deductible as well. Valuation can be on either a replacement cost or actual cash value basis, and coverage may be available on a blanket as well as a scheduled basis. Media coverage includes the cost to reconstruct software developed in-house {subject to the limit of liability selected for the coverage}, if necessary.
Perhaps most importantly, an EDP policy will respond appropriately to extra expense or income loss from the loss of EDP equipment, programs and data, provided that these coverage options in the policy have been elected and adequate limits of liability have been established.
EMPLOYEE BENEFITS PLAN LIABILITY COVERAGE
Protects the insured employer against claims by employees or former employees resulting from negligent acts or omissions in the administration of the insured's employee benefits programs.
The term "employee benefits programs" is defined to include group life insurance and group accident and/or health insurance; profit sharing plans; employee stock subscription plans; and workers' compensation, unemployment insurance, social security benefits, disability benefits, etc.
Coverage is intended to extend to the "administration" of these plans, including counseling employees, interpreting employee benefits programs, handling records, enrolling/terminating/canceling employees in specified plans on a timely basis, etc.
EMPLOYEE DISHONESTY COVERAGE
Employee dishonesty coverage protects an employer from financial loss due to the fraudulent activities of one or more employees. The coverage includes protection for loss of money, securities, and other property of the insured.
Some scheduled policies are still available, but the majority are written on a blanket basis. This provides coverage for all employees, subject to the policy definitions.
The limit of liability is "per loss" and is applied on an "occurrence" basis. All acts involving the same employee or group of employees is considered one occurrence.
ERRORS & OMISSIONS
Coverage for liability resulting from errors or omissions in the performance of professional duties. Applicable as a general rule to professional business activities such as banking, accounting, law, insurance and real estate.
EXTRA EXPENSE COVERAGE
If your building was rendered untreatable by fire or any other insured peril, it would probably be necessary to secure other quarters to continue your business operations. However, the use of such buildings would undoubtedly involve many extra expenses, such as rent, installation of telephones, etc. Extra Expense insurance covers such expenditures over and above your normal monthly expenses.
 EMPLOYMENT PRACTICES LIABILITY COVERAGE
Protects the corporation, directors & officers and employees for claims resulting from wrongful termination, discrimination, sexual harassment, wrongful discipline and failure to employ or promote.
Whether you are right or wrong in the eyes of the jury, the typical defense costs alone average $100,000 - $200,000 per case!
 EXTRA EXPENSE COVERAGE FOR COMPUTERS
If your computer/EDP equipment was damaged or destroyed by fire or any other insured peril, it would probably be necessary to incur certain extra expenses to continue your business operations. While your equipment is being repaired or replaced, you might have to rent temporary equipment, hire additional personnel, pay overtime wages, and rent additional space.
Likewise, you might have to "recapture" and "re-enter" lost information after your equipment is repaired or replaced. This would be in addition to your normal, ongoing day-to-day operations.
Extra Expense insurance for computers covers these and similar expenses resulting from a covered loss.
FIDUCIARY LIABILITY COVERAGE
Fiduciary liability, also known as pension trust liability, provides coverage for loss that the insured becomes legally liable to pay because of a claim made against the insured for any alleged wrongful act by such insured or by any other person for whom the insured is legally responsible. It also covers the defense costs in connection with a covered claim. The policy is written on a claims made form.
A wrongful act includes any violation of the responsibilities, obligations, or duties imposed on fiduciaries by the Employee Retirement Income Security Act (ERISA), as well as acts, errors, or omissions in the performance of the duties of the plan administrator.
The ERISA definition of a fiduciary is very broad. It is any person so named in the plan or any person who exercises any discretionary authority or control with respect to the management or administration of the plan or its assets.
The rules and regulations of ERISA include strict guidelines for fiduciaries. Failure to comply can result in lawsuits from employees, former employees, and beneficiaries, as well as the Secretary of Labor, Treasury Department, and Pension Benefit Guarantee Corp. The sponsor corporation as well as the individual fiduciaries are at risk.
ERISA also has a broad definition of what is considered an employee benefit plan. It includes any plan, fund, or program established or maintained for the purpose of providing employee benefits to its participants or beneficiaries. Under a fiduciary liability policy, the insured includes the following:
  • The sponsor organization
  • The plan(s)
  • Any natural person in his/her capacity as fiduciary or administrator of the plan(s)
Most fiduciaries are unaware of their personal financial risk or that of the sponsor organization. Fiduciary liability coverage provides one way of reducing the risk and providing protection for the sponsor organization and individual fiduciaries.
FIRE LEGAL LIABILITY COVERAGE
Coverage needed if you occupy leased or rented property for which you could be held legally liable for damage to the property due to fire or explosion.
FORGERY OR ALTERATION COVERAGE
This type of insurance covers loss sustained through forgery or alteration of outgoing negotiable instruments made or drawn by you, or drawn on your account(s), or made or drawn by one acting as your agent. This includes loss caused by any of the following:
  • Checks or drafts made or drawn in your name, payable to a fictitious entity.
  • Checks or drafts, including payroll checks, executed through forged endorsements.
  • Alteration of the amount of a check or draft.
GARAGEKEEPERS LEGAL LIABILITY
Provides coverage to owners of storage garages, parking lots, etc. for liability as
bailees with respect to damage to automobiles left in their custody. Coverage is contingent upon establishing liability on the part of the insured.
GENERAL PARTNERS' LIABILITY COVERAGE
This type of insurance is also known as General Partners' Liability and Limited Partnership Reimbursement coverage.
A general partner's management and fiduciary responsibilities to a limited partnership closely parallel the director's or officer's to a corporation. Exposure occurs when general partners become the financial managers of a limited partnership. The directors and officers of corporate general partners share this type of exposure.
Some causes of claims are as follows:
  • Untrue written or oral statements made by the general partners.
  • Breach of fiduciary duty.
  • Incomplete disclosure of facts.
  • Omission or misleading statements in the offering memorandum.
  • Selling of unregistered limited partnership interests.
  • Conflict of interest.
  • Failure to devote adequate time to the partnership.
  • Appointment of drilling contracts without proper prior investigation as to their experience.
Failure to minimize risk factors that prove detrimental.
 
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