Insurance Implications of the Gulf Oil Spill

What are the insurance coverage implications when a pollution event like the Gulf oil spill occurs? The Big “I” Virtual University had one of the first detailed coverage analyses on the street after this event. The article examines damage to property arising from waterborne and windborne oil—what is expected to arise from a hurricane. The analysis examines both ISO and NFIP personal and commercial lines forms.

In a format this brief, it is too dangerous to speak in generalities other than that there is limited, if any, coverage for most situations under ISO and equivalent forms, while NFIP forms have fewer limitations. Read the full article to learn how important the factual details of each loss are to coverage.

Calling Out Invalid Certificate Requests

Some certificate holders refuse to accept the Septem­ber 2009 ACORD 25 form because it no longer includes a notice of cancellation and instead refers them to the policy. These third parties want agents to use an earlier edition, modify the current form or use a proprietary certificate.

Check out the Big “I” Virtual University analysis of why you should not or cannot comply with this demand. Also included is a one-page summary to give to your customers or third parties that explains the issue in a more consumer-friendly manner.

Refusal to comply with these requests is not based on a whim, but rather on legal implications surrounding insurance laws and reg­ulations and ACORD’s own licensing agreement. The agreement requires agents to use the September 2009 edition of the ACORD 25 no later than September 2010.

Read the entire article and down­load the “one-pager” that Big “I” members can give to insureds and cer­tificate holders explaining why agents must use the current edition of the ACORD 25.

When Are “Completed Operations” Complete?

The CGL policy usually covers both ongoing and completed operations. However, at what point is an operation completed? This question has particular significance when the business is involved in a periodic service contract.

For example, what if a contractor does daily checks on pumps in an oil field, opening and closing lines into empty or full tanks? The CGL insurer declined a claim, saying that since a pump checker’s operation is ongoing on a daily basis and never completed, it does not meet the completed oper­ations definition of the CGL form.

If this is true, does an office cleaning service not have completed operations until its month-to-month contract is fulfilled? What about an annual contract for monthly sprinkler system maintenance service: Is there no completed operations coverage until the end of the year? What about a quarterly pest control service? Weekly lawn care?

No. The “products-completed operations hazard” definition says that “your work” will be deemed complete when that part of the work done at a job site has been put to its intended use. Note that the P/CO coverage kicks in when “that part” of the work is put to its intended use. It does not require that the complete job be accomplished or the contract be fulfilled. Get more details.

Bill Wilson (bill.wilson@iiaba.net) is director of the Big “I” Virtual University, an online learning center for agents and brokers.