General Liability...What are the guidelines?

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PostPosted: Tue Feb 26, 2008 11:22 pm   Post subject: General Liability...What are the guidelines?  

I don't know if I'm posting in the right place, but If I'm not, please let me know so I could change it.



A little backgroundÂ…. A dear friend who owns a construction company for many years is having a rather hard time with his former insurance carrier as they are demanding additional payments for his general liability. Of course he is somehow confused as he thought that after his last audit a refund was due because of errors in classification codes and payroll discrepancies reflected an overcharged in his premium.



Since my friend is one of those business owners that rather be in the operational side of the business that dealing with the administration part of it, he completely trusted his insurance agent (who he knows and has been doing business for fifteen years) to take care of the errors and possibly re-audit his business. He received a verbal commitment that this issue will be taken care of, but apparently was not, as he received a call for the carrier that this issues and concerns were never addressed.



Eventually my friend decided to explore other agents as he found out that his policy did not even included products completed as part of the general liability policy.

What really struck me is that:



1. His new policy that includes products completed is about half of the amount of the original policy.



2. He has been unsuccessful obtaining the audit worksheets as the carrier stated that the state statues do not required the carrier to provide this information to the policyholder.



3. The auditor and agent were aware of serious misclassifications on the codes and payroll discrepancies.



4. He has not signed a renewal policy for ten years.



Now my questions are.



1. How is possible that a policy that covers products completed is half of the amount of a policy that did not even included that?

2. Are Insurance carriers regulated in regards with the rates that can charged their customers? I understand that is a marketplace, but does such a thing as a cap exists?

3. If a carrier is not obligated to provide an audit worksheet what other resources are available to verify that the audit was properly conducted?

4. A General Liability policy for a construction company without products completed is a major liability exposure, Is this complete disregard of an agent fiduciary duties?





I know that my friend probably fail in some ways to do his due diligence, but this happened because of his trust in his insurance agent, I am also aware that the last thing that he wants, if to turn this into a legal matter, but rather will like to settle this in a fair and amicable way.



I know that he could launch a complain with the State Department of Insurance, but is this a possibility and does he have any legs to stand? Are there any consulting companies that deal with this kind of situation?



Thank you in advance for any response or feedback.

pepe112
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PostPosted: Wed Feb 27, 2008 12:03 am   Post subject:   

An experienced commercial broker in your area is who you should contact. This is a very spercific concern and you need the best information available.

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PostPosted: Wed Feb 27, 2008 6:19 am   Post subject:   

Dear, what i just could follow from your post over here-

Quote:
Eventually my friend decided to explore other agents as he found out that his policy did not even included products completed as part of the general liability policy.

What really struck me is that:



1. His new policy that includes products completed is about half of the amount of the original policy.




But I must say that somethings are beyond comprehension to me, like as you've said over here that the original policy didn't even include certain products completed. Again you're saying that the new policy has half-the-amounts covered compared to the original one. Does that mean that the original one covered only some of the completed products for a said amount ?

Please help me understand it in a better way! Awaiting your responses.. MallHergreaves

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PostPosted: Wed Feb 27, 2008 6:39 am   Post subject:   

Hi,



Trusting anyone without proper paper works to support isn't worth it!

This shows up true in this case, but I must say that there are things that have been implied & not acted upon in reality. You're saying that - the auditor & the agent had been aware..its not accepted if you only say that on the basis of your agent's version.



Similarly, you have mentioned of some

'errors in classification codes and payroll discrepancies' which have reflected an 'overcharge in his premium'. Didn't your friend know that there are somethings which need to get notified in writing from the side of the policy-holder (& that none else...not even a broker can act upon such things..) ?



Considering a complaint with the DOI is always there, but make sure that you perfectly know what was there in your original policy well before you hit the bull!

TarzananApe


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