In my last video, I introduced this multi-part video series focused on the common errors, mistakes, and failures I have documented in the coverage programs we have reviewed in the past for prospective clients.
Last time we discussed missing named insureds and today we’re going to talk about missing locations.
Having all your locations properly identified predominately falls into two policy buckets.
The first is property insurance. Where I have seen this happen most often is with temporary locations such as non-owned warehouses. Inventory can overflow at one location and it gets stored at a new location and the insured fails to notify their agent of this change. And if this temporary location becomes permanent the problem of it not be reported can run for several years.
While many property policies provide sub-limits for newly purchased or leased locations, there are limits on the amount of coverage and the duration of coverage. SO if there’s a loss at this temporary location in the future, there can be limited coverage or no coverage.
Other property location-based problems include locations with incorrect addresses or new locations purchased but never reported.
Again, it’s not a problem until it’s a problem.
The solution is that locations are reviewed during a renewal review or mid-term review. Unfortunately, too many brokers don’t perform these with clients, so the locations go unreported until there’s a loss.
The second bucket of insurance this happens with increasing regularity is with workers compensation. It’s happening more often today because of virtual workers who work in different states than that of the named insureds.
The workers comp policy and it’s benefits are state specific, so it’s required to have the states where an insured has locations OR employees identified in section 3A of the policy. It doesn’t matter if the employee is full time or part-time, failure to have that employee’s state on the policy can exclude coverage for that employee if they’re injured during a work-related accident and a claim is reported.
So, to sum it up, insureds need to be aware of their locations and have them properly listed in their policies – the two most location dependent policies are property and workers comp, but it may also be critical for other policy forms as well.
As always if you’ve got concerns about potential shortfalls, gaps and overlaps in your insurance program, or want to learn more about our process, I’d love to hear from you.
Why not contact me for a conversation – no pressure, no obligation. You have questions – we have the answers – let’s talk!
