(July 2024)
PF&M subscribers in any manual or electronic form are permitted to
reprint the following sample insurance proposal language when preparing
insurance presentations for their commercial insurance customers. Other uses
require permission from The Rough Notes Company, Inc.
The following paragraph or similar language must 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 named
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 insurance proposal is not a reproduction
of the insurance policy, it’s intent is 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. 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, time
element and workers compensation, for a complete account proposal.
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The Insurance Services Office (ISO) Products/Completed Operations Liability Coverage Forms are normally used as stand-alone monoline policies but can also be included as part of a package policy. The occurrence form covers losses involving eligible injury or damage that occurs during the policy period, regardless of when the insurance company is notified of the loss. The key to coverage is the date of loss. The insured must promptly notify the company of a loss. Depending on circumstances, late notification could affect coverage.
Under the claims-made form, coverage is triggered by the date the claim is filed. Any covered loss or claim filed within the policy period is handled by that policy, regardless of when the damage or injury actually occurred. A retroactive date may be provided which limits the covered time horizon.
This Products/Completed Operations Coverage Form Sample Insurance Proposal language follows the occurrence form.
The insurance company pays amounts the insured is legally obligated to pay as damages due to bodily injury or property damage covered by this insurance. It also has the right and duty to defend the insured against lawsuits seeking those damages if covered by this insurance. At its option, the insurance company can investigate any claim and settle any lawsuit that may result but:
The only other obligation or liability to pay amounts, perform acts or provide services exists under Supplementary Payments for bodily injury and property damage coverages. Coverage applies only if the bodily injury or property damage:
Bodily injury or property damage that occurs during the policy period and that was not known to have occurred before the start of the policy period by any insured includes any continuation, change or resumption of that injury or damage after the end of the policy period.
Bodily injury or property damage is determined to be known at the earliest date that any insured or authorized employee:
Bodily injury damages include damages claimed by any party for care, loss of services or death resulting at any time from the bodily injury.
Exclusions must be examined carefully, since many of them have conditions, exceptions, limitations, or restrictions not indicated below. Coverage does not apply to:
Bodily injury or property damage intended by the insured is not covered. This exclusion does not apply to bodily injury resulting from using reasonable force to protect persons or property.
Bodily injury or property damage liability the insured assumes under a contract or agreement is excluded. This exclusion does not apply to liability the insured has if there is no contract or agreement or to bodily injury or property damage under an insured contract if the injury or damage occurs after the contract or agreement's effective date.
Bodily injury or property damage liability for which the insured may be held liable due to causing or contributing to the intoxication of a person, furnishing alcoholic beverages to persons under the influence of alcohol or under the legal drinking age, or a law relating to the sale, gift, distribution or use of alcoholic beverages is excluded. This exclusion applies only if the insured's business is manufacturing, distributing, selling, serving, or furnishing alcoholic beverages.
Any obligation the insured has under workers compensation, disability benefits, unemployment
compensation or similar laws is not covered.
Liability arising out of bodily injury to an
employee of the insured that occurs in the course of employment is excluded. Consequential
injury to family members of the employee is also excluded.
Bodily injury or property damage arising out of any act of war, including undeclared war, civil war, insurrection, rebellion or revolution, or any act or condition of war, is excluded.
Coverage does not apply to property damage to:
This exclusion has two separate exceptions that must be reviewed carefully and in their entirety in the context of the exclusion.
Coverage does not apply to property damage to the insured's products that arises out of it or any part of it.
There is no coverage for property damage to the insured's work that arises out of it or any part of it included in the products/completed operations hazard. This exclusion does not apply if a subcontractor performed the damaged work, or the work out of which the damage arises, on the insured's behalf.
Property damage to impaired property or property not physically damaged is not covered if it arises out of either of the following:
This exclusion does not apply to loss of use of other property arising out of sudden injury to the insured's product or work after being put to its intended use.
Coverage does not apply to damages claimed as a result of the loss of use, withdrawal, recall, inspection, repair, replacement, adjustment, removal or disposal of the insured's product, work, or impaired property if the withdrawal or recall is due to a defect, deficiency, inadequacy, or dangerous condition in it.
There is no coverage for damage arising out of the loss, loss of use of, damage to, corruption of, or inability to access or manipulate electronic data. This exclusion does not apply to bodily injury.
With respect to claims it investigates or settles, or suits against the insured it defends, the insurance company pays:
None of these payments reduce the limits of insurance.
If the
insurance company defends an insured against a suit and an indemnitee of the
insured is also named as a party to the suit, the insurance company also
defends the indemnitee, subject to a number of
conditions on, and requirements of, the indemnitee. The insurance company's obligation to pay
Supplementary Payments ends when the limit of insurance is used up paying
judgments or settlements.
The named insured entity on the declarations
determines who is an insured:
The following are also insureds:
Newly acquired or formed organizations are also insureds for no more than 90 days. This is subject to certain conditions, exceptions, and exclusions.
The limits of insurance apply separately to
each consecutive annual policy period and to any remaining period of less than
12 months. This starts with the policy period on the declarations unless it is
extended after issuance for an additional period of less than 12 months. In
that case, the additional period is considered part of the last prior period
for the purpose of determining the limits of insurance.
The limit of
insurance on the declarations and certain rules determine
the most the insurance company pays. This is regardless of the number of
insureds, claims made, suits brought, and persons or organizations making
claims or bringing suits. The aggregate limit is the most paid for the total
damages under bodily injury and property damage liability. Subject to either
the aggregate limit, the each occurrence limit is the
most available that may be paid for the total of damages under bodily injury
and property damage liability that arises out of a single occurrence.
Bankruptcy or insolvency of the insured or the insured's estate does not relieve the insurance company of its obligations.
No person or organization has the right to include the insurance company as a party to a suit seeking damages from an insured or to sue it concerning this coverage form until all its terms are met. The company may be sued on an agreed settlement or final judgment against an insured but it is not liable for damages for which payment is not required under this coverage form or that exceed the limit of insurance that applies.
The insurance company's obligations are limited if other valid and collectible insurance is available for losses covered under bodily injury and property damage liability.
This insurance is primary and the insurance company's obligations are unaffected unless any other insurance is also primary. In that case, it shares with that other insurance by the method of sharing.
The insurance company follows the method of contribution by equal shares if all other insurance also permits it. Under this method, each insurance company contributes equal amounts until either its limit of insurance or the amount of loss is paid, whichever happens first.
If any other insurance does not contribute by equal shares, contribution is by limits. Under this method, each insurance company's share is based on the ratio of its limit of insurance to the total limits of insurance of all insurance companies.
Premiums are calculated based on the insurance company's rules and rates. Premiums indicated as advance or deposit premiums are subject to audit and adjustment at the close of each audit period. If the advance premium is less than the earned premium as determined by the audit, the insured pays the difference. If the advance premium is more than the earned premium as determined by the audit, the insurance company returns the difference to the insured. The insured must keep records of the information needed for the audit and the premium calculations and send copies to the insurance company when it requests them.
The insured agrees that the entries on the declarations are accurate and complete, are based on the representations it made to the insurance company, and that coverage is based on those representations.
Insurance applies as if each insured is the only named insured and separately to each insured against whom a claim is made or a suit is brought. This condition does not apply with respect to the limits of insurance and any rights or duties specifically assigned to the first named insured.
The insured's rights of recovery against others responsible for a loss the insurance company pays transfer to the insurance company unless the insured waived them in writing before the loss occurred. The insured cannot do anything after a loss to impair any rights not previously waived. If the insurance company requests, the insured must bring suit or transfer those rights to the company and assist it in enforcing them.
If the insurance company decides not to renew this coverage, it mails or delivers notice of its intent to the first named insured at least 30 days before the expiration date. If the notice is mailed, proof of mailing is sufficient proof of notice.
Refer to the coverage form for a list of terms and their definitions.