Resources to assist policyholders to understand key issues of insurance coverage and recovery.
Companies often face the risk of significant financial exposure for damages or injuries occurring in the course of their business including, for example:
Property damage and business interruption losses.
Commercial general liability claims.
Directors' and officers' liability.
Obtaining appropriate insurance policies can help limit a company’s financial exposure to these types of events. To maximize the protection that may be available under its insurance policies, the policyholder should understand:
The different types and layers of insurance policies available (such as first-party, third-party, primary, umbrella, and excess coverages).
The contents of an insurance policy to ensure the particular risks it faces are covered by the policy's terms.
The scope of coverage provided by a policy, including policy limits.
Any policy exclusions or conditions that may limit coverage.
When coverage under a policy is triggered.
Its obligations under a policy.
Insurance policies are contracts between the insurer and the insured. The language of a policy generally controls whether an insurance company must provide coverage to a policyholder. Therefore, understanding the key components and language of insurance policies can help companies obtain the appropriate coverage for the risks they face when doing business.
The Insurance Policies and Coverage Toolkit is a collection of continuously maintained resources designed to help in-house counsel understand the fundamentals of insurance policies, coverage and recovery. This toolkit also contains resources about service contracts, colloquially known as extended warranties. Service contracts:
Are consumer contracts sold separately and in addition to the standard manufacturer's warranty on newly purchased items, such as consumer electronics.
Extend the time length of standard warranties, and may contain different terms and conditions.
Many consumers believe that service contracts are insurance, but most states have explicitly declared that service contracts are not insurance. This means that, while service contracts are regulated by state insurance regulators, service contracts are subject to less regulation than insurance, which is heavily regulated.