Category Archives: Questions & Answers

Insurance Q & A – Answers from Marjorie Segale

Question 2 – Workers Comp
We have an insured who is a (domestic) employee referral agency. The employee is paid their wages out of a trust account set up by the homeowner using the domestic employee. The employment contract does not specifically require a Certificate of Insurance showing that the employee is covered for workers’ compensation. We are concerned that the referral agency could be considered the employer if the hiring party has no workers’ compensation coverage. We believe they should be asking for a Certificate of Insurance showing workers’ compensation coverage from the employing homeowner.

Answer by Marjorie L. Segale AFIS, CISC, RPLU, CIC, CRIS, ACSR, CISR
Director of Education, Insurance Community Center
I think you are completely correct. Anytime an employee is hurt, the Department of Labor is going to look for any responsible party to pay for the medical treatment and/or lost wages. I think that they should rightfully ask for a Certificate of Insurance (I don’t think that the absence of that requirement in the contract is a big deal). It is very common for people to ask for a COI showing coverage even if there is not a specific obligation to do so in the contract.
More Questions and Answers are on the Homepage of the Insurance Community Center



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Insurance Q & A – Answers from Insurance Professional

Question 1 – Workers Comp
If an employer no longer has any employees is it necessary to maintain a WC policy if the amount of time they will be without employees is unknown? If so why?

Answer by Casey Roberts, ACSR, AFIS, CIC – Laurus Insurance Consulting
As you have probably figured out by now (even though you say you are a newbie) there are very few “yes” or “no” answers in the business of insurance. Let’s say the insured is a sole proprietor and no longer has any employees. In California I would not have a problem with canceling their Workers’ Compensation policy. Note that I would be 100% CERTAIN that they have no employees. Sometimes employers work with “independent contractors” who may or may not be considered as such should a claim occur. If this is the circumstance then I would be loathe to cancel their policy.

If the insured were a Corporation or similar ownership, I would want to make certain that ALL of the officers that have the ability to select to be covered or not to be have selected to NOT be covered. I would want this in writing from the individuals. Far be it from me to cancel a policy without the knowledge of one of those that could potentially be injured and have a claim.

Another consideration is that oftentimes insurers are willing for a minimum premium charge to continue to carry coverage just in case the insured suddenly and without telling you (trust me, this happens a fair amount of the time) hires a new employee. Consider that your insured just got a job and needs someone for two or three days…are they always going to remember to call you? Unfortunately the insurance agent or broker is not always the first person they think to call.



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Q: I am having a problem with the CGL form (CG 0001 0798) with a carrier. I am asking but how policies should work (or not work).

Questions & Answers

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Q:  The client’s lease calls for “Tenant shall provide Landlord with a Certificate of insurance naming Landlord, Landlord’s lender (if any), and Realty Corporation as additional insureds, provides for a waiver of any right of recovery by way of subrogation against Landlord in the event of any loss, and provides for a thirty (30) day written notice to Landlord prior to cancellation or material change of coverage”.

Of course the standard fire insurance allows for the waiver if in writing before the loss.   Do you think this means  for liability too?   We contacted the GL carrier and they said they don’t endorse a waiver on the GL.  Is there an automatic waiver section in a GL policy similar to the property section?

Any help you can offer is appreciated.

A:  Yes, I do believe that the language you have quoted brings in every line of insurance, including property, auto, liability, work comp, etc.

ISO GL (any edition) does not require the Waiver of Subrogation endorsement CG 24 04.

The CGL Condition #8 – Transfer of Rights of Recovery Against Other To Us in the GL form demands that the Named Insured does nothing AFTER loss to impair the insurer’s rights of subrogation.  Therefore, the Named Insured may waive rights prior to a loss occurring and not violate the policy conditions.

8.  Transfer Of Rights Of Recovery Against Others To Us

If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring “suit” or transfer those rights to us and help us enforce them.

The Business Auto language is the same – the condition # is 5.

The WC policy is a problem and would have to be endorsed and the insured will have a premium charge that could be significant.

If the insured is carrying an Umbrella policy, check the form.  Many standard markets follow the underlying ISO language, but others do not.

I hope this is helpful.


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Q: When would a client need the Total Pollution Exclusion form with Hostile Fire CG 2155?

Business Fire

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Q: When would a client need the Total Pollution Exclusion form with Hostile Fire CG 2155?  I am underwriting a risk for a commercial glazier and the agent is requesting this form, in lieu of CG 2149 Total Pollution Exclusion.  This is her example of why they are requesting this coverage.

Agent wants this coverage in case the insured’s building burns down due to a hostile fire and the vapors were to pollute the air and cause BI or PD to an adjacent property or individuals.  They want to make sure there is coverage to the 3rd party.  I believe the agent is off on the coverage, but I need a resource that explains this coverage.


Your agent is correct.  I even like the example provided.  Here’s the issue:

Over the past decades, the courts have ruled that inhalation of smoke clearly falls within the definition of “pollution” which the policy states as:  Any solid, liquid, gaseous or thermal irritant or contaminant, include smoke, soot, fumes, acids, alkalis, chemicals and waste.

Due to premises and operations risk, a property occupier can be held legally liable for injury arising out of that occupancy, which would include a building fire that results in smoke inhalation and injury.

The original policy language provides an exception granting coverage for “hostile fire” that results in bodily injury or property damage.  When the Total Pollution Exclusion endorsement (CG 21 49) is added, this coverage is removed along with the other exceptions for coverage under exclusion f.  In fact, the agent is asking for CG 21 55, which leaves intact the Total Pollution wording you desire to add, but provides this limited exception for coverage and is a commonly used compromise by insurance underwriters.  In fact, I typically recommend that the agent ask for CG 21 65, which provides an exception as well for breakdown of building heating, cooling and dehumidifying equipment as well as mobile equipment spills.

While there are many environmental pollution concerns that rightfully should be covered under a pollution policy, in fact, that part of the industry typically does not cover hostile fire as it is most often covered by the standard CGL.

I hope that this is helpful.  Please let  me know if more assistance is needed


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