How Does a Business Claim Impact the Insured

Dec 21, 2015

  1. DJAJ
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    DJAJ Super Genius

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    I am not as fmailiar with how business claims impact an insured as personal claims do. I just wrote a fast food restuarant earlier this year. Saturday night they got robbed. About 2k in cash and some damage. Is this worth a claim? They are with Travelers. What does their renewal look like with this? Thanks!
     
    DJAJ, Dec 21, 2015
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  2. Arnage150
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    That probably wont affect it at all. If they get multiple claims of a similar origin they will just get dropped. To my knowledge commercial policies don't get surcharged like auto policies. However some companies will retier them or put them into a different paper company with higher filed rates.

    You may want to check coverages, usually there is a very small sub limit for cash theft.

    As a good Agent. That is the type of claim I would probably try to talk them out of putting in.
     
  3. djs
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    djs Super Moderator Moderator

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    What is their deductible? Probably not much real coverage. As Arnage said, the cash sublimit is probably below their loss, unless you provided extra coverage.

    The premium change will be dependent on if you have any sort of premium credits applied to the rate. My guess is not, since its a fast food place. One loss, no real impact.

    My next question is if this place has decent cash management system in place? $2K in a register or available is far above what should have been outside of the vault..... unless they waited for the timelock, which means its an inside job.

    Dan
     
    djs, Dec 21, 2015
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  4. INSUREGEEK
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    INSUREGEEK Super Genius

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    Commercial lines pricing tends to be a little more subjective, and there are a LOT of variables that could affect a renewal offer. So, it's really hard to make predictions.

    C/L claims get looked at more holistically: loss ratio, frequency, severity, insured's response to a claim, etc. The carrier's response might be to take a rate increase in some fashion on just this account, or if they had a terrible year on restaurants, across all the ones they insure.

    If this one had a clean loss history prior to this, it might get set aside.

    It also sounds like something I'd suggest they try to absorb at this point.
     
  5. DJAJ
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    DJAJ Super Genius

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    I appreciate the info guys. Yea, we have discussed not putting in the claim but its their first year in business so its a lot of cash for them. We did include an endorsement Arson & Theft Reward $5,000. My client purchased the business from his father in law. Hes going to let me know today what he wants to do.
     
    DJAJ, Dec 21, 2015
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  6. djs
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    djs Super Moderator Moderator

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    Unfortunately, Arson and Theft reward won't really cover this. As described, it is:

    Arson & Theft Reward: Will pay for reasonable expenses you incur for rewards that lead to an arson conviction in connection with a covered fire or explosion loss or, a theft conviction in connection with a coverage “theft” loss.


    So, you would need a conviction so this will pay the reward you provided for the tip that lead to the arrest and conviction. I wouldn't want to wait around for that.

    Dan
     
    djs, Dec 21, 2015
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  7. DJAJ
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    DJAJ Super Genius

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    Ah, got it thanks.
     
    DJAJ, Dec 21, 2015
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  8. INSUREGEEK
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    I think you're looking for Money & Securities on the cash, though you'll need to read the fine print for the hoops and exclusions which may still mean no coverage.

    And to follow up on a point made a couple times now - your insured should look into steps they can take to try to prevent another theft like this.
     
  9. DJAJ
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    DJAJ Super Genius

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    Thanks, I am pulling the policy to read through and we have already talked about getting an alarm and not leaving that type of cash. That place has been there for about 15 years and never happened before.
     
    DJAJ, Dec 21, 2015
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  10. hesse
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    usually you can increase on/off premises money and securities to like 5000/10000.
     
    hesse, Dec 21, 2015
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