If Polcies Are Written/ Rated Wrong, Do Companies Pay Claims?

[Italianik]

Hey All,

Question, I wrote a motorcycle dealership and the old policies were all basically completely wrong. They don't own the building, they have 6 employees (not 1.5), etc.... its was a mess and the coverage was garbage. GARBAGE.

Anyway- With so many errors on the policy would the company have an out in the event of a claim? Say there's a fire, do they get paid to repair the $100K in reno's they did to the building and they are responsible to insure?

I feel like they would be justified to deny some of it....

 

[cottonland]

Hey All,

Question, I wrote a motorcycle dealership and the old policies were all basically completely wrong. They don't own the building, they have 6 employees (not 1.5), etc.... its was a mess and the coverage was garbage. GARBAGE.

Anyway- With so many errors on the policy would the company have an out in the event of a claim? Say there's a fire, do they get paid to repair the $100K in reno's they did to the building and they are responsible to insure?

I feel like they would be justified to deny some of it....

Tenant's Betterments and Improvements is an area that most agents do not address. Sounds like that was addressed in this instance.

 

[Aram Fingal]

It depends. A lot of times they'll pay the claim anyway, and then go after the writing agent's E&O to get reimbursed.

 

[Arnage150]

Some companies put betterments and improvements under the building limit. So you will see a building limit on the policy. Some put it under the property limit and some use the "tenant's betterments and improvements form." I don't know why the # of employees would matter on a dealership policy? They may charge for mechanics. Sales and clerical employees are not changed for on a GL policy. They could have 1ft and 1pt mechanic 4 sales people?

Assuming you know what you are doing the short answer is yes. They would have to pay out on a liability claim even if it wasn't rated correctly. Property is a little more grey. They would only pay out to the max limit on the policy.