Commercial Property Theft Exclusion

[bill777]

My underwriter issued me a quote for my client on a special form with theft excluded only to buildings without central station alarm, my client has central station alarm. The policy she then issued has an endorsement theft exclusion form CP 10 33 06 95(which wasn't checked/included in the quote) that doesn't mention anywhere about not being valid if the building has central station alarm.
My client suffered a loss to 3 AC units that are on the roof of his building from copper looters.
The adjusters of Lloyds declined his claim due to the theft exclusion.

Can my client fight this, or the company screwed him by sliding the theft exclusion in his policy.
Note i had informed my underwriter about this theft exclusion the moment i saw it and she told me same thing the quote was saying that it applies only to buildings without central station alarm.
The adjusters of Lloyds beg to differ though.
Any advices from the veterans here?

 

[djs]

If I understand, you are saying the policy was issued, not as applied.

Is there any signatures that indicate the acceptance of the actual policy?

With Lloyds, this will probably be an uphill battle. You might make a case with the underwriter, but they will cover that with something showing the policy issued was accepted. The quote might work, but that is more between you and the client.

This is what E&O coverage is actually for, where there is an administrative oversight somewhere. The question will become whether its yours or the underwriters. Not near enough details to tell here.

Of course, if the policy actually says that it should be covered (I got lost in this part of your description) then Lloyds should be hung out to dry. I assume it doesn't, since you say you mentioned this to the underwriter at the time.

Dan

 

[bill777]

If I understand, you are saying the policy was issued, not as applied.

Is there any signatures that indicate the acceptance of the actual policy?

With Lloyds, this will probably be an uphill battle. You might make a case with the underwriter, but they will cover that with something showing the policy issued was accepted. The quote might work, but that is more between you and the client.

This is what E&O coverage is actually for, where there is an administrative oversight somewhere. The question will become whether its yours or the underwriters. Not near enough details to tell here.

Of course, if the policy actually says that it should be covered (I got lost in this part of your description) then Lloyds should be hung out to dry. I assume it doesn't, since you say you mentioned this to the underwriter at the time.

Dan

The only signatures are on the accord forms given prior to the policy. The quote not only mentioned theft is covered for buildings with central station alarm but also had a list with the endorsements numbers below that the policy will contain when issued checked with an x and unchecked the ones the policy will not contain. The theft exclusion was unchecked!
So in the policy we have some form of sliding where similar sliding Century did to the same client the year prior with a hurricane exclusion form. I had noticed that and they removed it promptly when i mentioned it to them, but this company's underwriter with the theft exclusion told me it applies only to buildings without central station alarm/same thing the quote was saying and that my client is covered. The bad thing is i was talking to her on the phone and i don't have our conversation documented but the qute she had issued me says the same thing she told me over the phone.

Thanks for the helpful reply!
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Yes the policy that was issued wasn't as represented in the quote!
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Also the theft exclusion in the policy and the whole policy itslef nowhere does it say that it doesn't apply if my client has central station alarm.

 

[djs]

Start with the basics though. Is theft a covered peril in the policy? It isn't always. Lloyds gets weird on some of this stuff. It probably is covered, just want to check the basics though.

Then check to see if unlocked property outside the building is covered. Roof AC units are usually considered part of the building, not business property, but cover your basis here.

If its on the quote provided by the underwriter but not on the policy and there is no premium change, then I would tell the underwriter to fix it.

Bottom line is it sounds like the underwriter messed up. Truth is, it was probably a software glitch since its impossible to remember all these checkboxes for all the carriers for all the different commercial quotes.

Make sure the claim is payable in all other aspects and then ask the underwriter to correct the mistake. They won't, but you have to ask first. Okay, sometimes they will.

Remember, underwriters are your friends. Don't throw the underwriter under the bus until you are sure the claim is payable outside of this issue.

Always get your clients to sign for acceptance of the policy. It will save your hide in MANY ways. Life guys do this as a matter of principle and the fact they are required. P&C guys need to do this because there is always a dispute about the coverages you discussed and the coverages they were willing to pay for.

In this case, signing the quote is proof of the intent, it should work out for you. I've seen it happen the other way around more than once, where the client backed out of a quoted coverage and then forgot they did that.

For lack of anything better (or simpler), just take the policy dec page and have them sign and date that. Nothing fancy required.

Dan

 

[BIG RED IS BACK]

OH CRAP!

I would check to see what paperwork you sent it. Say THIS is what I sent in, YOU forgot it.

 

[greatfish]

Being that this is a Lloyds policy, I am guessing that when you are saying "underwriter" you really mean wholesale broker. It sounds like the wholesale broker either forgot to get the endorsement removed or was wrong in his/her understanding of exactly how the endorsement works.

 

[djs]

In my experience, underwriters rarely know how endorsements work at claims time. You are better off talking with claims, except that doesn't work so well with Lloyds.

 

[bill777]

Start with the basics though. Is theft a covered peril in the policy? It isn't always. Lloyds gets weird on some of this stuff. It probably is covered, just want to check the basics though.

Then check to see if unlocked property outside the building is covered. Roof AC units are usually considered part of the building, not business property, but cover your basis here.

If its on the quote provided by the underwriter but not on the policy and there is no premium change, then I would tell the underwriter to fix it.

Bottom line is it sounds like the underwriter messed up. Truth is, it was probably a software glitch since its impossible to remember all these checkboxes for all the carriers for all the different commercial quotes.

Make sure the claim is payable in all other aspects and then ask the underwriter to correct the mistake. They won't, but you have to ask first. Okay, sometimes they will.

Remember, underwriters are your friends. Don't throw the underwriter under the bus until you are sure the claim is payable outside of this issue.

Always get your clients to sign for acceptance of the policy. It will save your hide in MANY ways. Life guys do this as a matter of principle and the fact they are required. P&C guys need to do this because there is always a dispute about the coverages you discussed and the coverages they were willing to pay for.

In this case, signing the quote is proof of the intent, it should work out for you. I've seen it happen the other way around more than once, where the client backed out of a quoted coverage and then forgot they did that.

For lack of anything better (or simpler), just take the policy dec page and have them sign and date that. Nothing fancy required.

Dan

Thanks for the advices, i'm so grateful!

 

[Accelerated]

Is vandalism covered? Rooftop units being damaged by copper thieves kind of falls into both theft and vandalism. Additionally, rooftop units are generally not considered BPP (unless they are leasing the structure and personally own the units). They should be considered part of the structure. Depending on the policy verbiage within the theft exclusion endorsement, you may be able to go that route. Hard to tell without a copy of the endorsement.

 

[bill777]

Is vandalism covered? Rooftop units being damaged by copper thieves kind of falls into both theft and vandalism. Additionally, rooftop units are generally not considered BPP (unless they are leasing the structure and personally own the units). They should be considered part of the structure. Depending on the policy verbiage within the theft exclusion endorsement, you may be able to go that route. Hard to tell without a copy of the endorsement.

Vandalism is only excluded if the building is vacant which is not. Thank you so much for the information!