(October 2019)
All PF&M subscribers are permitted to reprint the following sample
insurance proposal language when preparing insurance presentations for their
commercial insurance customers. Other uses require permission by The Rough
Notes Company, Inc.
The following paragraph or similar language should be included in all
insurance proposals:
Consult the policy for definitions
and limitations. The terms of this proposal do not represent contract terms.
The policy is subject to company underwriting practices.
This proposal language is not intended to be an entire insurance proposal.
A client specific section including the name and address of the insured, the
insurance company(s) and the agent, and information about them, a list of
locations, limits, deductibles, and similar customer specific items are not
included and should be prepared.
The intent of any insurance proposal is not to be a reproduction of the
insurance policy, but to give a summary of possible coverages.
Paragraphs explaining coverages unique to this policy form may be the
most important addition to your insurance proposal and sales effort. Coverage
examples can be tailored to your individual customer. Be careful when altering
any proposal language not to expand coverage beyond what the policy intends.
This proposal should be combined with proposals for other lines of
business, such as commercial property, general liability, workers compensation,
and umbrella liability, for a complete account proposal.
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The numerical symbols on the declarations translate to the covered vehicles outlined below. Only autos designated by a symbol are covered.
Private passenger autos, such as sedans or station wagons are symbol 63 as are pickups, panel trucks and vans that are not used for business. Any such private passenger autos acquired during the policy period are also covered.
Trucks, tractors, and trailers the named insured owns, including liability coverage for non-owned trailers when connected to an owned power unit. It also includes trucks, tractors, and trailers acquired during the policy period.
Coverage provided is only for no-fault or personal injury protection on owned vehicles in no-fault states where they are licensed or principally garaged. It also includes autos acquired during the policy period on the condition that they must have no-fault benefits in the state where they are licensed or principally garaged.
Coverage applies only to leased, hired, rented, or borrowed vehicles.
When this symbol is entered next to any Physical Damage Coverage on the declarations, it means the exclusion that relates to loss to a trailer in the possession of any other party does not apply to that coverage.
These are autos the named insured does not own, lease, hire, rent, or borrow that are used in conjunction with the business. It includes private passenger type autos owned by employees or partners, members or members of their households, depending on the form of business, but only when used in the named insured's business or personal affairs.
These autos are land vehicles that also qualify as mobile equipment except for being subject to a compulsory or financial responsibility laws or other motor vehicle insurance laws where they are licensed or garaged.
Symbols 61, 62, 63, 64, 65, 66, or 79 include coverage for newly acquired vehicles of the type described for the remainder of the policy period. If symbol 67 is used, newly acquired replacement vehicles are covered, but only if the insurance company insures all owned vehicles and then for only 30 days before the insured must inform the insurance company of the acquisition.
If liability coverage is provided, the following are also covered autos for liability coverage:
The insurance company pays all sums an insured is legally obligated to pay as damages because of bodily injury or property damage covered by this insurance and caused by an accident resulting from owning, maintaining, or using a covered auto. Pollution cost or expense that is a consequence of the same covered accident is also covered.
The company has both the right and duty to defend any insured in a suit requesting such damages or pollution costs and expenses, but only if coverage is available under this insurance. The insurance company makes the decision as to when and how to investigate, settle, or litigate, as it deems appropriate. Any defense obligation ends when the liability limit of insurance is used up by payment of judgments and settlements.
Who Is an Insured
The following are insureds:
The following are not insureds:
Supplementary Payments
With respect to claims it investigates or settles, or suits against the insured it defends, the insurance company pays:
These payments do not reduce the limit of insurance.
Out-Of-State Coverage
Extensions
When a covered auto is away from its licensing state, the insurance company:
The insurance company does not pay any party more than once for the same elements of loss because of these extensions.
Liability exclusions must be examined carefully because many of them have conditions, exceptions, limitations or restrictions not indicated below. Coverage does not apply to:
Damages for bodily injury or property damage the insured expects or intends are not covered.
Liability that is assumed under any contract or agreement is excluded. Coverage does apply to liability for damages the insured would have even without the contract or agreement and to liability that is assumed in an insured contract or agreement.
Damages resulting from any requirement or obligation of the insured or the insurance company imposed by any workers compensation, disability benefits, unemployment compensation or similar law are excluded.
Damages for bodily injury to an employee of the insured are excluded. Damage to any family member of the employee that is consequential to the bodily injury to the employee is also excluded.
Bodily injury to any fellow employee of the insured when it happens during the employment or performance of duties related to the conduct of the insured's business is excluded. Consequential injury to household members of the injured employee is also excluded.
Property damage to property the insured owns or transports or that is in its care, custody or control is excluded. This exclusion also applies to covered pollution cost or expense involving the same property but does not apply to liability the insured assumes under a sidetrack agreement.
Bodily injury or property damage as a result of handling property before it is moved from the place the insured accepts it for movement into or onto the covered auto, or after it is moved from the covered auto to the final delivery destination, is not covered.
Bodily injury or property damage as a result of moving property by a mechanical device other than a hand truck is excluded, unless the device is attached to the covered auto.
Bodily injury or property damage arising out of operations of certain defined mobile equipment is excluded. This exclusion also applies to machinery or equipment that would qualify as mobile equipment if it were not subject to compulsory or financial responsibility laws or other motor vehicle insurance laws in its licensing or principal garaging state.
Bodily injury or property damage that is due to the named insured's work that is complete or abandoned is not covered. Work otherwise complete that may require service, maintenance, correction, repair or replacement is treated as completed.
Damages for bodily injury, property damage and pollution cost or expense arising out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants are excluded. There are several exceptions that should be carefully reviewed.
Damages for bodily injury or property damage caused in any way by war, undeclared war, and civil war, including warlike action by a military force and actions taken by a government to prevent or defend against attacks involving military personnel or agents are excluded. This includes rebellion, revolution, insurrection, or unlawful seizure of power and actions taken to prevent or defend against these acts.
Coverage does not apply to covered autos used in any professional or organized racing, demolition contest or stunting activity. This includes practicing for such events or activities. Coverage also does not apply while the covered auto is being prepared for such a contest or activity.
The most the insurance company pays for the total of all damages and covered pollution costs and expense resulting from any one accident is the limit of insurance on the declarations. This limit applies regardless of the number of autos, insureds, premiums paid, claims made, or vehicles involved in the accident. Bodily injury, property damage and pollution costs and expense resulting from continuous or repeated exposure to essentially the same conditions is considered as resulting from one accident.
No party is entitled to receive duplicate payments for the same elements of loss under this coverage form and any Medical Payments Coverage endorsement, Uninsured Motorists Coverage endorsement or Underinsured Motorists Coverage endorsement included with this coverage form.
The insurance company pays sums the named insured is legally obligated to pay as damages because of loss to a non-owned trailer or its equipment under:
The insurance company has the right and duty to defend any insured in a suit where such damages are requested providing this insurance covers it. The insurance company decides how and if suits and claims are investigated and settled but its obligation to defend or settle ends when the limit of insurance for that coverage is exhausted paying judgments or settlements.
With respect to claims it investigates or settles, or suits against the insured it defends, the insurance company pays the following supplementary payments:
These payments do not reduce the limit of insurance.
Physical Damage exclusions must be examined carefully, since many of them have conditions, exceptions, limitations, or restrictions not shown below. The insurance company does not pay for loss caused by any of the following, regardless of any other cause or events that contributes concurrently or in any sequence to the loss.
Loss caused by or resulting from the explosion of any weapon employing atomic fission or fusion, or nuclear reaction, radiation or radioactive contamination, however caused, is excluded.
There is no coverage for loss caused in any way by war, undeclared war, and civil war, including warlike action by a military force and actions taken by a government to prevent or defend against attacks involving military personnel or agents. This includes rebellion, revolution, insurrection, or unlawful seizure of power and actions taken to prevent or defend against these acts.
These are all excluded but only if the loss is confined to one or more of these causes of loss. They are not excluded following the total theft of a covered auto.
The most the insurance company pays is the least of the following amounts:
Before the limit of insurance is paid, the deductible on the declarations is subtracted from the amounts determined above.
The insurance company pays for loss to a covered auto or its equipment under:
When glass breakage results from an object striking the vehicle, the named insured can choose to submit the loss as either a comprehensive or a collision loss.
The insurance company also pays the following expenses:
Physical Damage exclusions must be examined carefully because many of them have conditions, exceptions, limitations, or restrictions not indicated below. The insurance company does not pay for loss caused by any of the following, regardless of any other cause or event that contributes concurrently or in any sequence to the loss.
Loss caused by or resulting from the explosion of any weapon employing atomic fission or fusion, or nuclear reaction, radiation or radioactive contamination, however caused, is excluded.
There is no coverage for loss caused in any way by war, undeclared war, and civil war, including warlike action by a military force and actions taken by a government to prevent or defend against attacks involving military personnel or agents. This includes rebellion, revolution, insurrection, or unlawful seizure of power and actions taken to prevent or defend against these acts.
There is no coverage for any covered auto in the possession of any other party under a written trailer interchange agreement. This exclusion does not apply to loss payees. If the insurance company pays a loss payee, the named insured must reimburse the insurance company for its payment.
Coverage does not apply to covered autos used in any professional or organized racing, demolition contest, or stunting activity. Coverage also does not apply during practice or while the covered auto is being prepared for such contests or activities.
Coverage does not apply to loss to a covered auto due a reduction in its value because of a loss.
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The most the insurance company pays for loss in any one accident is the lesser of the actual cash value of the damaged or stolen property at the time of loss or the cost of repairing or replacing the damaged or stolen property with property of similar kind and quality. The company also adjusts for depreciation and physical condition in determining actual cash value if it is a total loss. If any repair or replacement results in better than similar kind and quality, the insurance company does not pay for the amount or value of the betterment.
Electronic equipment located in or on a vehicle in a place other than intended by the auto manufacturer is subject to a $1.000 sublimit.
The insurance company's obligation to pay for, or to repair, return or replace damaged or stolen property, is reduced by the applicable deductible for each covered auto. The Comprehensive coverage deductible does not apply to losses caused by fire or lightning.
These conditions apply in addition to the Common Policy Conditions.
If the named insured and the insurance company cannot agree on the amount of loss, either may demand an appraisal. The process is described in the coverage form.
The insurance company is not obligated to provide coverage unless the named insured fully complies with its listed duties.
No party has the
right to join the insurance company in any manner unless and until all coverage
form terms and conditions are completely
met and complied with.
The insurance company has three options to pay claims.
When the insurance company pays a loss, it receives all rights the insured has against others to recover for that loss.
The insurance company's obligations continue, even if the insured or its estate becomes bankrupt or insolvent.
Coverage provided by this form is void when fraud, concealment, or misrepresentation occurs regarding the initial application or a loss.
If the insurance company revises this coverage form to provide additional coverage without a premium charge, the additional coverage automatically applies to this coverage form on the date the revision takes effect in the state involved.
Multiple insurance policies may apply to a single loss. This section condition explains how this coverage form will respond.
The estimated premium is based on the named insured's estimates as of the effective date of coverage. An audit may take place at the end of the year to establish a final premium.
The insurance company covers accidents and losses that occur during the policy period and within the coverage territory as defined in the coverage form.
If two or more coverage forms or policies issued by the same insurance company apply to the same accident, the most paid is the highest applicable limit provided by any of the coverage forms. This condition does not apply to any coverage form or policy issued by the same company specifically as excess coverage over the coverage provided by this coverage form.
Refer to the coverage form for a list of definitions.