Common Problems with Business Insurance – Missing Locations
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 weâ€™re going to talk about missing locations.
Having all your locations properly identified predominately falls into two policy buckets.
The first is property insurance.Â Where I have seen this happen most often is with temporary locations such as non-owned warehouses.Â 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.Â Â 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.Â SO if thereâ€™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, itâ€™s not a problem until itâ€™s a problem.
The solution is that locations are reviewed during a renewal review or mid-term review.Â Unfortunately, too many brokers donâ€™t perform these with clients, so the locations go unreported until thereâ€™s a loss.
The second bucket of insurance this happens with increasing regularity is with workers compensation.Â Itâ€™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 itâ€™s benefits are state specific, so itâ€™s required to have the states where an insured has locations OR employees identified in section 3A of the policy.Â It doesnâ€™t matter if the employee is full time or part-time, failure to have that employeeâ€™s state on the policy can exclude coverage for that employee if theyâ€™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 â€“ 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 youâ€™ve got concerns about potential shortfalls, gaps and overlaps in your insurance program, or want to learn more about our process, Iâ€™d love to hear from you.
Why not contact me for a conversation â€“ no pressure, no obligation.Â You have questions â€“ we have the answers â€“ letâ€™s talk!