Intro to Insurance

Insurance: an undertaking by one party to indemnify another if a Government and Insurance Industry Regulation
specific peril damages an object of insurance -Licensing of insurers; federal & provincial institutions
-Federal; Office of the Superintendent of Financial Institutions
Function of insurance -Their job is to license insurers that operate in multiple
-Spread risk; from few to many (most important function) provinces and monitor/set strict financial standards to
-Insurers participate in loss prevention/reduction ensure stability
-Peace of mind; eliminates worry and lets people take risks (starting -Provincial; in BC, BC Superintendent of Financial Institutions (OSFI)
a business) -Regulates terms of insurance policies, license insurers that
-pay small fixed amount to fend off large uncertain amounts operate in their province, monitors financial stability of
-Supply credit; lenders won’t lend for unprotected property provincially licensed insurers and administers the Insurance
-Source of jobs & capital; insurances invest their premium act for their province
-Solvency; ability to meet financial obligations (suspended if not
Definition of insurance enough assets
-Agreement between insurer and insured; to transfer risk -(PACICC) Property and Casualty Insurance Compensation
-Insurer promises to pay when a specific peril damages an object Corporation; covers policy holders even when an insurer goes
OR when insured causes loss to others (liability insurance) bankrupt. Provides up to $250k per claim, max refund under
-Insurance pays only for accidental losses that happen after PACICC is up to 70%, max $700
agreement starts
-Principle of indemnity; states the amount of claim payment is equal -Fiduciary; handles other people’s money
to the amount of loss based on the value of the object immediately -Responsibility of brokers; hold commissions in trust and return
prior to loss unearned commissions
-Payment can be in the form of money or repairing/replacing -In Ontario, remit premiums to insurer in 30-60 days
property -Responsibility of insurers; return unearned premiums
General (property & casualty insurance categories -Premium is earned pro-rata and is fully earned upon policy
-Automobile; largest volumes, required by law expiry. (Pro rata= proportional)
-Property; personal and business property, 2nd biggest
-Liability; provides protection if legally responsible for causing injury Insurance Act
or damage to third party 1) Contents of insurance policies; must appear on declarations page
-Parties to the contract
Types of insurers; private and Government -Loss payable or payee
-Government; EI, provincial health plan, workers comp, etc. (usually -Policy period
compulsory) -Coverage and amount of insurance
-Private insurers -Subject matter of insurance; what is it and where
-Stock companies; owned by shareholders and profit -Rates and premiums; cost of insurance
oriented
-Mutual companies; owned by policyholders and not profit 2) Basic fire policy coverages
oriented. Cheapest insurance, if the company loses money, -Fire; ignition that causes “destructive burning”. 2 kinds of fire,
policyholders pay difference, and if in surplus, pays to friendly and hostile
policyholders as dividend -Friendly fire; deliberate and contained application for beneficial
purposes (fireplace)
-Hostile fire; not contained and destructive effects (insurable)
3 ways to distribute insurance -Must also insure against fire fighting related damages
-Direct writer; insurer sells its own products direct to consumer -2 additional perils insured; lightning and explosion of
(D2C) coal/natural/manufactured gas
-Independent broker; represents more than 1 insurer and gets
commission. Clients belong to the broker 3) Removal Clause
-Agency system; small business owners (agents get the commission -Covers property up to 7 days if moved to a location not stated on
and their own book of business). They represent 1 insurer and the policy to prevent further loss (necessary removal)
Facility Association (ex/ State Farm and Co-operators) -Limits available at new location is amount remaining after paying for
loss at the primary. This is important because usually no coverage
Lloyd’s of London for property not at stated location
-they insure the stuff uninsurable in normal markets
-They are a group of underwriters who assume risks themselves 4) Standard legislated exclusions; excluded perils below
-Anyone can be a Lloyd’s underwriter if they meet financial -Application of heat; (because its friendly fire)
requirements -Radioactive contamination
-Syndicates; groups of underwriters -Electrical currents (power surges)
-Underwriting agents manage the syndicate and appoints a -Lightning damage to electrical devices (resulting fires are
lead underwriter who is an expert in that class of biz. covered)
-Process to place business with Lloyd’s -Riot, insurrection, war, act of foreign enemy
-Producer provides broker w/ UW info on a “slip”
-UW commits to a % of the risk until fully subscribed
-Slip sent to Lloyds policy signing office
5) Statutory Conditions 8) Subrogation; insurer can sue in place of the insured after paying a
-Rights and responsibilities of the parties (no changes allowed) claim.
-3 types of misrepresentation -Subrogation; to stand in the shoes of another and assume
-False description of property to prejudice of insurer their legal rights
-Misrepresentation of a material fact; to lie -Insured can claim with insurer for loss caused by others
-Fraudulent omission of a material fact; withhold info -Insurer can recover all amounts including deductible from
-Material fact; something that would change the insurer’s decision if the responsible party
known. (loss history, previous cancellations, etc)
-It is NOT misrepresentation if it doesn’t disadvantage the insurer 9) Waiver of Terms/Conditions; only insurer can change policy terms
-Coverage is void is misrepresentation is related to loss and conditions. Must be written and signed by authorized person
-Fraud voids the entire claims
-Requirements upon loss; insured must provide proper Contract Law
documentation -Types of risk
-Notice of loss; ASAP in writing -Personal risk; financial hardship due to accident, sickness,
-Proof of loss (loss details) and statutory declaration ASAP or death
- Inventory, how the loss occurred, location at time -Property risk; damage or destruction of tangible property
of loss, other insurance, interest of the insured -Liability risk; actions of individuals or businesses that result
and others, and changes in property since policy in injury or damage to others
Start (change in use, ownership, location, etc) -Dealing with risks; CART
-Inventory of undamaged property (if required) -Controlling; try to reduce frequency/severity of loss.
-Must produce documentation; verified accounting records, (However,you can’t control everything)
receipts, invoices, etc -Avoidance; avoid the activity (No chance of loss but not
-Giving notice or proof of loss; insured or agent can give notice if practical)
insured is not available. Agent can be anyone authorized. -Retention; paying for losses yourself (not practical
-Those with insurable interest can file proof of loss if because you need a lot of money)
insured refuses -Transfer;shift the financial risk to someone else
-Termination responsibilities (purchasing insurance)
-Insured; must notify insurer (termination is immediate) -2 types of risks; speculative (might win or lose) and pure risk (can
Premium refund on a short rate basis to cover admin costs. only lose). Pure risk is insurable, speculative is not.
(Short rate is pro rata minus admin fees)
-Insurer; must give written notice of termination. By -Contract; legally enforceable agreement (i/e to do or not to do
registered mail (15 days), hand delivered (5 days). Refund something)
is pro rata. -Legally enforceable; courts agree to enforce terms of the contract
-Notice (procedures on how to send a notice)
-Insured; in writing to provincial head office/ chief agency of Elements of All Contracts to be Legally Enforceable
Insurer -Agreement; offer and acceptance. All terms agreed upon w/ no
-Insurer; in writing to last known address of insured further negotiations
-Property of others; no coverage unless insured by policy -Genuine intentions; all pirates freely enter and are aware of all
-Change of interest; if insured no longer has insurable interest in terms
property, coverage not automatically extended to new owner -Consideration; all parties bring something of value
EXCEPT FOR; transfers under bankruptcy act, succession, death -Legality of object; purpose of contract is legal
-Salvage; insured must take reasonable steps to protect property -Legal capacity of the parties; all parties understand obligations
from further loss -Minors can contract for “necessities”
-Entry, Control and Abandonment; rights after loss (ACE) -Mental incompetents have no lega capacity
-Abandonment; insured cannot abandon property to insurer -Trade names can’t entry contracts (must be attached to
-Control; insurer cannot take control of property after loss legal entity)
-Entr; insurer can enter immediately after loss to investigate -Corporations; CAN enter contracts
-Appraisal; stipulates procedures for claims disputes -Elements special to insurance;
-Losses Payable; within 60 days of receiving proof of loss -Insurable interest; only those who actually suffer loss are
-Replacement; when the insurer decides to repair/replace, must entitled to benefit from policy
provide written notice within 30 days and repair/replace starts within -Indemnity; establishes amount of entitlement
45 days of proof of loss -Utmost good faith; both parties must be honest and
-Action; legal action must be taken within 1 year of date of loss comply with terms/conditions exactly, otherwise VOIDed.
-Alberta changed this to 2 years in 2012
Changing an Insurance Contract; via docs. both parties must agree
6) Limitation of Liability Clause; mark any terms that may reduce -Floater; insures mobile property (cellphones, equipment, etc)
amount of payment in red ink -Rider; adds coverage. Sits on top of the policy.
-Endorsement; issued by insurer to show change has been made
7) Delivery of Policy; if policy has been delivered, the insurer must -Separate policies; used for special property risks (COC, auto, etc)
pay for losses even when the premium has not been paid -Binder; interim policy (used when broker commits the insurer to an
insurance contract without checking with insurance company first)
-Agency agreement; gives broker authority to commit insurer to
contract
Process of Placing Insurance
-An application is required for most risks. Let’s insurer determine the
quality of risk
-Cost of insurance; varies based on location, AoI, coverage, etc
-4 Entities involved;

1 and 2)Agent/broker; the intermediary between insurers and clients

-Failure to meet duty and legal standards may cause financial loss to
client or insurer and can get sued. This becomes an E&O claim.
Inadequate coverage, failure to advise, or incorrect coverage is an
example of E&O
1)Broker; represents the clients interest; determines
insurance needs and selects insurer.
-Duty to client is a legal requirement; to exercise
reasonable skill, care, and diligence.
-Duty to insurers; to tell truth and not conceal
important information
2)Agent; represents insurers interest. They are a broker
who has binding authority

3)Underwriter; non-client facing insurance company employees not

selling insurance. No license required. Underwriters do the following;
-Risk selection;choose risks more likely to be profitable (least risky)
-4 sources of information used;
-Application; gives info on risks and hazards
-Broker; info on clients personal and business reputation
-Inspection reports; helps evaluate hazards
-Hazard; condition that might cause a peril to
Occur
-Physical hazards; conditions related to premises
-Construction; potential for loss
-Housekeeping; maintenance
-Occupancy; use of premises
-Moral Hazards; subjective characteristics of
applicant.
-Moral character; ethics and honesty
-Financial condition; payment history
-Indifference to loss; carelessness
-Rate making; different prices for different risks
-Policy holder services; paperwork such as quotes, policies,
changes, renewal/cancellations, etc.

4)Claims adjuster; investigates loss, determines amounts and how

they’re settled.
-Claims process; Insured reports to broker > broker reports to
insurer > Insurer assigns company adjust to deal with claim
-Independent adjuster; for specialized or far off losses
-Brokers’ responsibility; determine status of claim, monitor progress,
ensure client satisfaction via good service and relationship.
Characteristics of Property Insurance Policies
1)Property Insured Personal Property Insurance - Habitational Forms
-Personal property policies insure private non business use property -Homeowners forms; basic, broad and comprehensive
-Commercial properties policies insure commercial use property at -For single family dwellings occupied year round by owners OR
named location under construction to be occupied by owner
-Types of coverage; named perils & broad form -2 common characteristics for all homeowner forms
-Named perils; insures losses by perils listed on policy -Clear language
-Broad form; insures against all direct physical losses not -Standard format; Sec 1 property, Sec 2 liability
excluded on policy -Uniform definitions;
-Insures direct damage only -Persons insured; named insured and dependants
-Direct loss; insured property is damaged by a peril -Named insured; person(s) named on policy
-Indirect loss; result of direct loss (loss of income) -Dependants; any of the following while living in
-Only defined property and defined locations are covered the same household
-Exclusions; perils and property -Husband/Wife by legal marriage
-Perils excluded; because potential for catastrophic loss, -Common law spouse together
commercially uninsurable, naturally occurring or cumulative 3 years, or 1 year with a child together
damage; uncommon losses -Relatives of either and perm residing
-Property excluded; because there is greater than normal -Any persons under 21yrs old in their care
loss potential, expensive to insure, or specialized policy (excludes boarders/roomers)
exists (auto insurance) -Students attending school (must be supported by
named insured if temporarily away for school)
2)Deductible Clause -Dwelling; private residence
-Deductible; cost the insured is required to pay per loss -Premises; the address noted on the policy
-Eliminates small losses and keeps insurance affordable. Higher
deductibles equal cheaper premiums Losses insured; Sec 1 property, Sec 2 liability
-Section 1 Property coverages; Coverage A; dwelling building,
3)Standard Mortgage Clause Coverage B; detached private structures, Coverage C; personal
-Side agreement between insurer and mortgagee property, Coverage D; additional living expenses
-2 guarantees; -Section 2; Liability coverages, ; Coverage E; personal liability,
-Guarantees payment to mortgagee when insured is denied Coverage F; voluntary medical payments, Coverage G; voluntary
coverage due to breach of conditions (fraud, payment for property damage, Coverage H; voluntary compensation
misrepresentation, etc) for residence employees
-Guarantees that insurer will not reduce coverage or
terminate policy without notice; or terminate at the request Extensions of coverage; included in all homeowners forms
of insured w/o mortgagees consent -Moving to another home in Canada; covers new place and property
-Mortgagee has insurable interest in property while in transit for up to 30 days
-Debris removal, additional 5% of coverage A
4)Conditions/Warranties -Property removal; expands removal clause to 30 days
-Warranty; a promise that something is true and shall remain true. -Credit/Debit card, forgery and counterfeit money up to $1000
Exact compliance is required, if warranty is breached, policy is void -Inflation protection; limits auto adjusted by inflation for mid-term
-Condition; a requirement to do or not to do something losses
-Statutory condition; legally required by law -Tear out; will replace walls, etc torn out to get a broken water pipe
-Policy condition; stated on the policy, created by insurer behind it. Excludes swimming pools and public water mains
-Change in temperature; covers indirect damage to personal
5)Claims Payment Rules property inside dwelling if damaged by insured peril
-Pair&Set/Parts rule; pays only for item lost, not the full set -Freezer food; spoilage due to power failure or freezer breakdown
-Indemnity agreement; Outlines how much the insurance company up to $2000
will actually pay you. Amount of settlement equals the least of actual -Lock replacement; up to $500 for stolen keys and reported to police
cash value, interest of insured, and limit of insurance -Fire department charges; up to $1000 the fire department from
-ACV; replacement cost minus depreciation another city bills you
-Interest of insured; calculates insurable interest -Arson conviction reward; up to $1000 for info leading to conviction
-Limit of insurance; will only pay up to this limit, not higher
-Alternative Basis of Settlement; Basis of Claim Payment
-Replacement cost on buildings; must be done with due -Building plus property minus deductible. Deductible applied once to
diligence and dispatch otherwise you won’t get full amount; total amount of loss
-Must repair w/ materials of like kind and quality at -Dwelling and detached private structures; pays replacement cost or
same or nearby location. Pays ACV first, then full ACV if not repaired
RC payment after replacement -Must repair with similar materials, same location and same
-Replacement cost on personal property; must be used for occupancy
original purpose at time of loss and replaced promptly -Guaranteed replacement cost coverage; covers full cost to
-Valued policies; limits established by appraisal. repair even if greater than the limit
-Replacement Cost; what it costs to repair or replace with materials -Excludes by-law costs
of like kind and quality (without depreciation)
 order, will be paid up to 2 weeks
-Personal property; pays replacement cost excluding media and
accounting records Homeowners Basic Form Coverages; covers the following
-ACV payments for fine arts, antiques, memorabilia, property not -Fire/Lightning; extends coverage to lightning damage to
well maintained, property no longer used for original purpose, or electrical devices
property not replaced within 180 days -Explosion; covers domestic boilers, excludes water
hammer (explosion caused by built up pressure in blocked
Section 1 - Property Coverages pipes)
-Smoke; from malfunction furnace or cooking appliance
Coverage A; Dwelling Buildings; limits of insurance covers -Windstorm/Hail; interior is covered if hole created by same
-Dwelling and attached structures; main house, porch attached, etc occurrence (excludes accumulation of snow, flood, waves)
-Permanently attached outdoor equipment; swings, treehouses -Impact by vehicle; excludes damage by insured/employee
-Fixtures temporarily removed; while at repair/seasonal storage, up operated vehicle and pets
to 10% of dwelling limit -Falling Object; covers damage to structures
-Materials and supplies on premises; used in construction or repairs -Theft and damage during theft; excludes pets, scams,
(not for new home building) under construction, vacat
-Outdoor swimming pool and attached equipment; in or above -Riot
ground -Vandalism/malicious acts; excludes damage by insured
-Outdoor plants; 5% of dwelling limit up to $500 per plant. Excludes -Water damage by sudden/accidental escape of water.
windstorm and hail Excludes vacant buildings, sewer backup, continuous
seepage of water, flooding, damage to systems from which
Coverage B; Detached Private Structures water escaped, or by freezing siding dwelling when insured
-Separated from main building by open space (detached garage) away for more than 4days during heating season (unless
- +10% of Coverage A limit water is drained or someone checks daily)
-Glass breakage; not glass objects
Coverage C Personal Property -Transportation; personal property and fixtures being
-60 to 90% of Coverage A transported or temp off premises
-On premises coverage; only covers usual property (stuff normally -Electricity; damage by power surges/fluctuations
found in homes)
-Personal property; stuff owned/used by insured or for Exclusions
building maintenance -Buildings for business use without permission from insured
-Property of others in insureds custody; covered if not -Illegal property
covered elsewhere -Dwelling vacant over 30 days (vacant; occupants have left
-Off premises coverage; global coverage if temporarily off premises with no intention to return)
-Property of students; covered if living away from home for school -Intentional act by insured or agent
-Personal property EXCLUDED; -Property on display
-Motorized vehicles and equipment (golf cart, car, etc), -Application of heat; resultant damage is covered
except domestic vehicles (lawnmower, wheelchairs) -Release of fuel oil
-Equipment; CD players, TV, Radio attached, etc.
-Aircraft and equipment Homeowner Broad Form
-Campers, trailers and equipment -Covers property for named perils and buildings for all risk
-Special limits of insurance for theft and all perils.
-Property damaged by any insured peril, payment is restricted Homeowners Comprehensive Form
-Business property; $2000 max -Just like broad form but property is covered for all risk
-Students property(when temp away); $2500 max Exclusions
-Garden tractors and acc; $5000 max -Water damage
-Watercraft and acc; $1000 max -Snow/landslides or earth movement
-Money/bullion; $200 max -Wear and tear / mech breakdown / theft
-Securities; $2000 max -Settling/expansion of building
-Computer software; $2500 max -Sporting equipment during use
-Spare car parts; $1000 max -Property being worked on if result of work
-Property stolen or lost; payment is restricted -Caused by birds or vermin
-Jewellery/watches/fur; $2000 max -Advantage of comprehensive form is it insures all losses
-Card collection; $1000 max not specifically excluded
-Bikes and equip; $500 max
-Coins/collection; $200 max Underwriting Homeowners Forms
-Cov A Dwelling building; replacement value
Coverage D Additional Living Expenses -Cov B Detached private structure; 10% of Cov A
-Additional living expenses; covers extra expenses to maintain -Cov C Personal property; 70-90% of Cov A
normal standards of living due to necessary relocation after home -Cov D Additional living expense; 20% of Cov A
damaged by insured peril -Cov E Personal liability $1 million
-Fair rental value; pays lost rental income. -Cov F Voluntary medical payments $1000 per person
-If home is undamaged but denied access due to civil -Cov G Voluntary property damage; $500 per occurrence
 -Cov H Voluntary comp; as per schedule
-Option to do a Single limit policy; Coverages A to D combined to
one
-Can add endorsements to add additional coverages for watercrafts,
arts, coins, jewellery, computers, cameras, musical instruments, etc

Other Habitational Forms

Condo Owners Insurance

-Condo; a group of units owned separately but together form a
strata/condo corporation
-Strata owns and insures original value of building and common
elements (landscaping, hallway, parking, etc)
-Condo unit owners policy; covers personal property, additional living
expenses, loss assessment, unit additional protection and unit
improvements
-Loss assessment; Covers when stratas policy is
inadequate to cover loss to collective property (limit of
$5000)
-Unit additional protection; Covers value of unit when
stratas insurance isn’t enough
-Unit improvements; Covers up to $1000 replacement cost
for premises upgrades (can buy more)
-Basis of settlement; same as homeowners (replacement cost).
Pays for unit betterments+property-deductible

Tenants Package Forms

-Covers property and additional living expenses (coverage C and D)

Rented Dwelling
-For rental properties, usually ACV only
-Usually not offered unless insurer also insures the clients principle
-Excludes vandalism and theft

Mobile Home Insurance

-Definition of dwelling now includes permanent furniture/fixtures and
equipment
-Emergency removal expenses; uses 5% of dwelling AoI paid for
disconnecting power/ water and transportation when necessarily
removed

Seasonal Dwellings
-Usually added to primary policy as an additional location
 -Any summer or seasonal dwellings may be offered this coverage
Personal Property Insurance; Endorsements/ Extra Coverages By-Law (Increased Cost of Demolition or Construction Endorsement
-Covers increased cost of construction/demolition if you have to
Seasonal Residence comply with new by-laws (ex/sprinkler systems)
-Same coverage as homeowners basic (Named perils) -Sprinkler by-law extension; covers cost of installing/repairing
-Excludes; sprinklers to comply
-Transportation -Demolition or Construction extension; covers addition cost of
-Unless stated; burglary/robbery, vandalism/malicious acts, demolition, building, repairs due to new by-laws. Must still meet all
glass breakage replacement cost requirements
-Snow load coverage (can cover via endorsement) -Only pays the bare minimum required to meet code
-Loss due to change in temperature
-Freezer food Personal Articles Endorsement
-Outdoor plants -Used for high value personal property (cameras,instruments, etc)
-May give broader coverage to match other homeowners if; -Used to increase limits, broaden coverage, or lower deductibles
-Client insures principle residence with same insurer -Binding authority; limited (if item value is over a certain amount)
-Built as a year-round residence and accessible year-round -Offers all risk coverage. The usual homeowners perils plus;
by a maintained roadway -Sports equipment due to use
-Occupied at least 1 out of 60 days throughout the year -”Marring” or breakage
-Owner occupied (not for renting) -Damage while being worked on
-Heated by thermostat controlled furnace/electricity -Snow/landslide and earth movement
Dwelling Under Construction -Theft by tenant (inc household/employees)
-For people who are building 1-2 family owner occupied -Water damage (inc flood, SBU, seepage)
dwellings -Usually covers ona valued basis (requires appraisal or receipt)
-Limit must be equal or greater to the completed value of the -Insurer pays the pre-negotiated value upon loss
dwelling -Partial loss to a coin collection; covers up to $250 per item
-Policy period is 1 year and must be purchased before the (schedule higher value coins individually)
foundation is done -Total loss; payout is equal to ; (limit/market value)xmarket
-This is necessary because homeowners comprehensive exclude; value
-Theft of materials from construction site -Stamps/coin collection usually insured on a blanket basis
-Water escape, rupture or freezing of water pipes -Newly acquired property covered up to 30 days if similar to stuff
-Glass damage by vandalism already insured (limit is $5000)
-Reinstatement; when coverage is being provided as scheduled, you
-Endorsements; change terms of policies (add limits, or coverage for must notify insurer within 30 days of replacement
property/perils, lower deductibles, remove, or broaden coverage) -Underwriting;
-For scheduled coverage, must be described and set a
Endorsements separate limit for each
-Items must be for personal use only. If not, give full details
Vandalism or Malicious Acts Endorsement to insurer for approval (important for musicians or
-Removes exclusion from seasonal dwellings. photographers)
-Still excludes; -Current appraisals/receipt needed for jewellery if over
-Vacant (even if vacancy permit is given) $2000 (usually)
-Under construction (even if permission given)
-Damage to building glass Fine Arts Endorsement
-Attempted theft or theft -Increases existing coverage for fine art (paintings,rugs,rare objects)
-Losses caused by insureds spouse or household -Coverage similar to Personal article (all risk)
-The usual homeowners coverages plus marring, all smoke
Earthquake Endorsement; damage, earthquake, tenant theft, etc
-Removes earthquake exclusions -Valued basis coverage optional; recommended because it
-Deductible is usually 10% of Coverage A,B,C limit captures the artistic value, history and rarity
-Location affects premiums -Newly acquired art covered for 30 days (up to 25% of limit)
-Covered in 2 sections; Section A covers on premises including
Sewer Backup Endorsement transit between insured locations (up to 10% limit available for
-Covers losses by escape of water from sewer (sewer, drain, sump, losses at other locations) and Section B off premises (ex in transit in
septic tank, gutter) coverage territory or in storage)
-High risk or high losses = raise deductible -Excludes; Breakage caused by insured perils, vermin, while being
-Some restrict coverage to water escape from sewer/drain at or worked on (being framed)
below the lowest floor -Must be packed and unpacked by competent people
-Reinstatement; must notify insurer within 30 days if new object are
Residential Glass Endorsement acquired to replace
-Adds accidental glass breakage (and helps reduces deductible of -Underwriting; Scheduled coverage only, can insure breakage for
homeowners glass coverage) additional premium, and same appraisal conditions as personal
-Any rented, vacant or dwellings under construction usually don’t articles endorsement
have glass coverage, so a good way to offer.
-Personal articles and Fine arts endorsement virtually similar
Watercraft Endorsement
-Needed because homeowners limits watercraft coverage up to
$1000
-2 types of policies; Outboard motor and boat policy and yacht
policy. Covers everything from sailboats, boats with in/outboard
motors, yachts to liability arising out of use/ownership/maintenance
-Covers ACV, or replacement cost if boat is less than 10 years old
-Need to describe boat, motors, trailers and equipment. Note year
make, model length, construction, horsepower and motors serial #
-Liability premium depends on horsepower
-Loss of use covers $20 a day, max $200
-Only covers use within coverage territory (Canada and Continental
US)
-Can cover all risk or named perils
-All risk; covers transportation losses and collision with
objects in or on water (deadheads)
-Named perils; doesn’t cover losses while on water
-Newly acquired watercraft may be covered depending on the policy
-Exclusions; the usually stuff (wear and tear, racing/speed test,
cumulative damage, etc)
-Limit; insured must buy limit equal to 100% of the property value or
insured may have to pay a portion of the loss themselves
-Minimum retained premium is generally high (75%). This is because
watercrafts are usually used seasonally. Makes sure the insurer gets
enough money to cover the high risk/use months
-Deductibles apply
-Coverage summary page describes coverages provided such as
the boat and permanently attached equipment, motors, fuel tanks,
and other equipment (batteries, chargers, etc)

Travel Trailer Floater

-Removes exclusion for owned trailers and contents
-Coverage; usually all risk in Canada and US only
-Coverage for jewellery/watches/furs are usually limited to some
percentage of contents limit with a per item limit
-With this floater, no need to buy additional physical damage
coverages under auto insurance

Personal Computer Endorsement

-Increases coverage (removes the software limit on homeowners)
-Global coverage for media, software(and programs), computer
equipment
-Covers usual homeowners perils plus marring, breakage, extremes
in temperatures, snow/landslide, earth movement
-Coverage can be blanket and/or replacement cost (subject to
conditions)
-Excludes; information/data gathering, erasure, magnetic/electronic
injury (lightning is okay)

Television and Antenna Endorsement

-Expands coverage for TV, radio, antennas and attachments
-Covers accidental breakage, snow/landslide, earth movement,
tenant theft
-Reinstatement is the same as fine art
-Installation warranty; must be installed by a competent person.

-There are a number of miscellaneous endorsements such as

sporting/equipment, bicycles, business property, horses/livestock,
motorized vehicles, etc.
 -Will not subrogate fellow insured(s).
Commercial Property Insurance -If the net amount recovered(after costs) is not enough to
-Commercial property is owned/used by business while ON fully cover loss, amount is divided between the insurer and
premises (3 types; building, stock, equipment) insured based on % of loss borne
-2 types of policies; named perils and broad form -Insured cannot release anyone of liability (insurer will still
-Named perils; covers only perils listed (FSWILLER); Fire, Smoke sue)
damage due to sudden and faulty operation of stational furnace, -Reinstatement Clause; original amount of insurance is reinstated
Windstorm and hail, Impact of vehicle, Lightning, Leakage from fire after loss is paid
protective equipment, Explosions of natural/coal/manufactured gas, -Debris Removal; use remainder of limit (left after rebuild) to pay for
Riots/malicious acts removal of debris
-Broad form; Insurers all risks not specifically excluded; Some -Property Protection Systems; discounts for sprinklers, alarms, etc
examples that are covered are vehicle impact caused by insureds or -Conditions; insured must notify insurer immediately of any
employee, theft, water damage due to freezing/rupturing of pipes, known interruption/defect/cancellation of services
collapse of building (except due to EQ), all sources of smoke -If conditions are breached; can reduce coverage, can
damage (excluding industrial operations) charge additional premiums, or cancel the policy

-Premiums charged are related to coverage; total rate per $100 is Other Commercial Property Forms
equal to fire rate plus loading (for add perils)
-Loading; the amount you have to pay for additional perils on top of Property Away from Insured Premises
the basic fire rate -Covers property in transit and at temporary location (in CA/US only)
-Fire rate; basic rate to cover fire, lightning and explosions. 5 factors -In transit; if locked from start to end including incidental stops
that affect the fire rate -Locked vehicle warrant; used if susceptible to theft or
-Building construction; concrete cheaper than frame valuable property. Conditions are; fully enclosed metal
-Claims history; type of biz and history of applicant (5yrs) compartment, locked doors/windows and visible signs of
-Protection; against fire, looks at public protection (distance forceful entry.
to fire hydrant, fire hall, accessibility) and private protection -Common carriers are excluded from complying with this
(installed by applicant) Warranty and violation voids all coverage
-Occupancy; type of biz done and others nearby -Temporary locations; covers property in care, custody and control of
-Location; area, distance from other buildings, etc a bailee for hire at a location not controlled by insured
-Total rate (fire rate plus loading) X building value = Premium -Bailee for hire; someone who repairs goods, services, or stores @
a carriers depot
Common Clauses
-Description of Property Insured Glass Insurance
-Building; building described on declaration page including; -Covers accidental damage by anyone, earth movement or thieves
-Fixed structures related to building -Excludes fires (covered elsewhere), and war/nuclear hazard
-Permanent fixtures (carpet,light fixtures, etc)
-Additions and extensions connected to building Valuable Papers and Records
-Materials and equipment on premises for -Covers cost to recreate if stored properly when not in use
maintenance and normal repairs -Valuable papers; documents, records, drawings, books, maps, etc
-Decorative indoor plants -Must be stored in the described receptacle when not in use/closed
-Stock; merchandise usual to the business,
packing/advertising materials, and similar property of others B&M Policy; Mechanical breakdown (Equipment Breakdown)
when in the care of the insured where the insured is legally -Covers damage to buildings from explosion of boilers and pressure
liable or required to insure by contract. (ex/ if not legally vessels with greater than 15 PSI pressure controlled by insured
liable, cust. would claim under their own home insurance) -Also covers electrical/mechanical breakdown (boilers, a/c pumps)
-Equipment; contents usual to the business, similar -Insurer inspects objects before and during policy period. Suspends
property of others, and tenant improvements policy if dangerous conditions are found and can be reinstated after
-Co-insurance Clause; must purchase a minimum limit of insurance repairs
based on a percentage of values
-Applies to each of the 3 types of property separately Contractors Insurance
-Applies only to partial losses that are greater than the -Builder's Risk (broad form); purchased by building owner or general
lesser of 2% of AoI or $5000 (coinsurance penalties do not contractor to ensure buildings in CoC.
apply to total losses or very small losses) -Covers materials owned by insured and forming part of the
-When a loss happens, Adjuster determines ACV of finished project
property, amount of loss, limits purchased, & coinsurance% -Also covers landscaping and temporary buildings
-Amount of settlement can be penalized if you don’t meet -Excludes tools/equipment, cost of making good faulty
your coinsurance requirement. materials, workmanship or design (resulting dmg covered)
-Settlement = (did/should)xloss amount -Limit of insurance should be equal to the completed value
-EX/ insured has $1mil prop,coinsurance is 80%, and of construction
insured bought $400k. Based on $100k loss it would be -Policy period ends when occupied or unattended for over
(400k/800k)x(100k)= $50k 30 consecutive days
-Subrogation Clause; can sue the responsible party to recover -Contractors Equipment Floater; covers moveable equipment owned
claims paid. by insured
-Installation Floater; for specialized contractors. Covers property in
transit to job site, at job site awaiting installation, and during
installation until accept or insured's interest ceases
-Excludes tools/equipment or cost of making good improper work

Crime Insurance; 3 types Burglary/Robbery/Theft

-Burglary Insurance; mercantile and safe
-Mercantile Stock Burglary covers; theft from closed
premises if visible signs of force used
-Safe Burglary covers; theft of valuable property from safe if
force used to enter safe or remove it from premises
-Robbery Insurance; covers money, securities or valuable property
-Covers when taken by actual or threatened force to
custodian (someone allowed to have control of property)
-If custodian witnessed property being taken
-If taken from custodian killed or rendered unconscious
-Theft insurance; taking without owners’ consent
-Broad form covers theft of stock and equipment. Money
and securities must be added
-Money and securities policy covers; actual destruction,
disappearance, or wrongful abstraction

Business Interruption Insurance

-Restores lost income if caused by insured perils up to the level the
business would have earned if the loss hadn’t occurred
-Insured perils are the same as the property insurance
-Coverage starts on the date of loss for up to 12 months (even past
policy period)
-Pays lost net profits and expenses that continue during a
business interruption (continuing expenses)
-Will cover necessary expenses if proven to reduce amount
of loss
-Types of business interruption insurance
-Earnings Form; pay until property repaired or 12 months
-Profits Form; pay until income restored or 12 months
-Extra Expenses Insurance; pays extra expenses needed
to maintain normal business. Doesn’t need to prove that it
reduced amount of loss anymore
Basics of Legal Liability
-Laws are designed to establish standards of conduct
-2 types of legal systems; Criminal and Private Liability of Tenant to Landlord
-Criminal law; address wrongs against society by punishing -In tort law; liable for any damages caused by negligence
wrongdoers. Not insured -In contract law; for liability assumed by tenant in lease agreement
-Civil Law; addresses disputes between parties by compensating the
wronged party Liability for Children
-Common law; Based on precedence -Children are responsible unless you can prove lack of
-Doctrine of precedence; follows previous rulings in similar understanding of consequences
cases to ensure consistency.Creates a standard of conduct -Parents are generally not liable unless;
-Statute law; written law created created by legislation to regulate -They fail to supervise the child
certain activities -Damage caused by dangerous things given to child by
Parents
2 Branches of Civil Law; Contract and Tort -Child acting on authority of parents
-Contract law; enforce contracts. Remedies breach of contract by -Child working at parents business
enforcing performance
-Tort law; Tort is a private wronger other than breach of contract that Liability for Bailee for Hire
causes damage -Tort law requires ordinary care. They are liable when duty breached
-3 elements of a tort; legal duty owed, duty was breached, by negligence
and damage directly resulted -Can also assume extra contractual liability
-Types of torts; intentional and unintentional -Bailee for hire; someone who has temporary custody or property for
-Unintentional tort; caused by carelessness others for purpose other than sale
-Intentional torts; on purpose. Not insurable
-Strict liability; the person doing a dangerous activity is Employers Liability for Employees
legal liable for any injury or damages -Employers are vicariously liable for employee torts while in course
-Tortfeasor; someone who commits a wrong against an innocent of their duties
party. Joint tortfeasor is 2+ people acting together to cause damage -Not liable when employees delegate their duties w/o employers
-Negligence; Carelessness, failure to use the care of a reasonable consent, if they were on a frolic of their own, or had unauthorized
and prudent person given the circumstances use of employers property
-Plaintiff must prove duty owed and duty breached by -Employers liability for employees injuries; legal duty established in
negligence. Workers Compensation Act
-Foreseeability; defendant not negligent if outcome wasn’t -Workers Comp; no fault basis. If Workers comp doesn’t cover injury,
reasonably foreseeable employee can sue.
-If sued for negligence, insurer will find and pay for lawyer -If no Workers Comp, can manually enrol or buy employers liability
rider
Important Legal Precedents
Liability for Independent Contractors
Ownership of Property -Generally not liable for contractor negligence except;
-Different duties owed to different types of people entering your -When work is inherently dangerous
premises -Insured supplies defective material/equipment
-Trespasser; Someone who entered premises without -Insured controls work
permission. Duty owed, no traps or intentional harm -Work must be reasonable and insured must have been careful in
-Licensee; Someone entering for their own purpose with selecting contractor
permission from the occupier. Duty owed; warn of any
hazards known to occupier that they would not expect Liability for Animals
-Invitee; invited in for benefit of the occupier (business -2 categories; Domestic and Wild
purposes). Duty owed; protect against dangers known or might -Domestic animals; owner is liable on the first bite
reasonably discover -Wild animals; owner is strictly liable for any damage
-Children; protected by law. Duty owed; premises must be safe from
ALL dangers Joint Liability
-In BC/AB/ON/NS; under occupiers liability act, licensee and invitees -Multiple parties act negligently together. When liability is unequal,
are visitors. Duty owed; make sure they;re reasonably safe for the the law holds each party fully responsible
purpose of their visit
-Persons outside the premises; duty is to make sure Insuring Agreement
nothing leaks out -Insures bodily injury and property damage
-Bodily injury; injury, sickness, or death
Liability of Landlord -Property damage; physical injury to tangible property
-Liable when incorrectly warrants fitness for a particular use or including loss of use to undamaged property
conceal an adverse condition -Payment only when legally liable; determined by courts
-Landlord is also liable when renting furnished premises, -3rd party coverage only; payments only to parties not named on the
when landlord agrees to maintain premises but fails after policy
reasonable notice given, and in common areas
-Liability policy only pays compensatory damages only. Not nominal
or punitive.
-Coverage provided on occurrence basis; The policy in force at the
time the loss occurred is the one that pays
-Occurrence; accident including long-term exposure
-Accident; sudden and unexpected, occurs at a particular
point in time
-Continuous exposure; occurs over a long period of time
-Limits of insurance applies per occurrence
-Aggregate limit; max for all claims during policy period
-Split limits; separate limits for per person injury, injury of all people
and property

Duties in the Event of an Occurrence or Claim; PALAC

-Prompt notice to the insurer of any occurrence that might lead to
claims. Time, place, circumstance, witness info
-Assist in investigation, settlement or defense
-Legal papers must be immediately forwarded to insurer
-Authorize insurer to obtain info
-Can’t make voluntary payments other than first aid

Supplementary Payments
-Cost of defense and expenses of insured to assist, court costs, and
interest payable. This is paid on top of limit of insurance
-Expenses of insured (transport costs and lost wages)
-Court costs assessed against the insured
-Bond premiums
-Interest payable on amounts
 -Watercraft with outboard motor is less than 16 HP
-Any other type of motor less than than 50 HP
Liability Insurance Policies -Non motorized boats less than 8m long
-Personal liability coverage is included in your habitational forms -New watercraft are auto covered for 30 days
-Coverage E; personal liability, $1m limit regardless of size, then must be insured properly
-Coverage F; voluntary medical payments, $1000 limit -Can buy separate coverage for watercraft
-Coverage G; voluntary payment for damage to property, $500 limit described if more is needed
-Coverage H; voluntary compensation for residence employees -Domestic vehicles less than 25 HP
-No deductible on these coverages and limits vary by insurer -Motorized golf carts while on golf course
-Motorized wheelchairs more than 2 wheels and designed
Definitions for disabled people
-Persons insured; same as section 1 property coverages -Damage arising out of vehicles not owned by insured
-Premises insured; all premises described on policy -Covers the following;
-Temporary residence rented for no longer than 90 days -Any watercraft
-Premises in Canada intended to be principal residence of -Self propelled land/amphibious vehicles not subject to
insured for up to 30 days registration and for non public road use
-Land in Canada while you’re building a 1-3 family -Damage to the craft isn't covered
residence to be occupied by the insured -Uses of watercraft and motorized vehicles NOT insured
-Vacant land in Canada owned or rented by insured -Rented to others
-Family cemetery plots -Used without owners consent
-Basically anything for business purposes
Coverage E - Personal Liability -Examples include carrying for compensation, race/speed
-Global coverage for liability arising out of private activities test
-Supplementary payments are covered -Business or Business Property; normally insured under CGL except
-Excludes the following; injuries resulting from…;
-Damage to own property -Personal actions of insureds in course of business
-Damage to property of other in the care, custody and -Occasional rental of insured's residence
control of insured. Still covers property of others when -Rental of units in a2-3 family residence
caused by fire, explosion, water, or smoke -Rental of space in residence to others for occasional
-Damage to property/fixtures from work done on them office/school/studio use
-Injury to insured and anyone residing in household -Part time business of someone under 21
-Actions of named insured not residing at premises -Rental of < 3 parking spaces
-When insured voluntarily assumes liability except when -Trailers; Covered only when not attached to registerable automobile
assumed in contract in relation to insured's premises. Also
would still cover if the insured would have been liable Exclusions Applicable to all Personal Liability Policies
anyways -Regular business activities or unauthorized business use of
premises (including farming)
Coverage F - Voluntary Medical Payments -Professional services; rending or failing to render
-Pays medical expenses of person accidentally injured -Intentional damage or criminal act by insured
-Payments limited to amount stated on policy and 1 year from date -Failure to prevent abuse or corporal punishment
of accident -Transmission of disease by insured
-No fault benefit -Ownership/use of aircraft or airport; and all related

Coverage G - Voluntary Payments for Damage to Property Liability Insurance for Business
-Covers damage unintentionally caused to others and insured isn’t -Liability exposures of business
legally liable or intentionally caused by insured person under 12 -Business premises; related to condition of premises
years old -Business operations; work performed by business
-Excludes; damage to property owned by insured/tenant, limited -Products; made, sold or distributed
coverage for property of others in insured’s care, loss of use, -Completed operations; finished work put to use
disappearance or theft -Personal injury; to personal character or business rep
-Tenants legal liability; for the portion they occupy
Coverage H - Voluntary Compensation for [...] -Medical payments; for people on premises on voluntary
-Residence employees; A hired cleaner, landscaper, etc. basis
-Permanent residence employees (butlers) covered if named on -Commercial General Liability (CGL); enough protection for most
policy businesses
-No fault benefit -Special Liability Insurance for Professionals; (CGL doesn’t insure)
-This coverage pays for loss of life, funeral expenses, injury benefits, -Professional; anyone with specialized knowledge/training
medical expenses, temporary/permanent total disability -2 major classes;
-healthcare (medical malpractice)
Special Limitation on Personal Liability -consultant (E&O)
-Damage arising out of Watercraft and Motorized vehicles owned by -Garage Liability Insurance; for businesses that sell, repair, install,
the insured transport/operate vehicles (body shops or valets)
-Covers the following;
-Umbrella Liability Insurance; additional liability on top of existing
liability. Must have primary liability policies in place to be eligible
-2 coverages;
-Financial Shortfall; when primary policys limits have been
exceeded
-Dropdown coverage; when loss is excluded by primary
policy
-Self Insured Retention; deductible for umbrella policies when claim
excluded by primary
Farm Insurance -Replacement cost available on machinery under 5years old
-Farming; the ownership, maintenance, or use of premises for
producing crops/livestock, related operations, and roadside -Limited waiver of depreciation; If property is under 5yrs old and
stand/farmers market operations insured is original owner and limit purchased is equal to 100% RC
-Types of farms differentiated by; -Exclusions
-Products produced (dairy, vegetables, tobacco, etc) -Artificial electrical currents
-Types of equipment used (specialized machinery) -Mechanical breakdown
-Types of buildings required (grain storage, etc) -Ingestion damage
-More specialized farming operations will require more -Uncoupling, coupling
sophisticated equipment -Loss by repairs, service, maintenance, refuelling
-Farm policy coverage areas; dwelling/property, -Logging/Forestry property
outbuildings/content, machinery/equipment, liability -Tires/tubes unless lost by theft, fire, windstorm or
-Must buy all 4 coverages to qualify as a Farm package coincidental to other insured loss
-Property while used in/ intransit to custom farming
1)Dwelling Building and Personal Property -Wear and tear, latent defect
-Same coverage as homeowners. The liability section modified to -Dampness and dryness, freezing, extreme temperatures
include farm operations -Vermin
-Loss to data
2)Major Outbuildings and Contents -Losses caused by data problem
-Similar to commercial property insurance from fire to all risk
-Buildings covered; barns, workshops, granaries, etc. Can be 4)Liability
scheduled or blanket basis -For personal acts and farm operations
-Excludes the following; -Insuring agreement; broken down into the following sections of
-Structures for manufacturing/commercial use. Animal bodily injury/property damage, medical payments, voluntary
barns are still covered if sales of the meat,product is compensation, persons insured, territory
incidental
-Windmill towers and independently erected TV towers Bodily injury and property damage liability
-Windstorm and Hail; covered but damage to metal -covers personal and farm acts.
roofs/siding excluded unless punctured -Similar to habitation liability and CGL, only pays for compensatory
-Normally 80% coinsurance but can be up to 90% if all risks damages legally liable for
coverage selected -Insured exposures;
-Requirements for replacement cost coverage; -Liability for personal acts
-Less than 15 years old -Liability for farm operations (also off premises)
-Constructed from new materials -Liability arising out of insured premises. Includes;
-Built on permanent foundation -Residence premises; 1-2 family residence where
-In use for original purpose (otherwise ACV) the insured lives and portion of other buildings
-Deferred Settlement Clause; Insurer pays 50% initially. To get the occupied by named insured or their spouse as
rest, insured must; Residence
-Repair/replace building with one designed for same -Premises named insured owns, rents or operates
Purpose as a farm
-Repair/replace within 9months of loss -Premises/approaches used by the insured to get
-New building is within 200 ft of original building to their farm/residence
-Also covers fire department charges (limited coverage up to $2500) -Cemetery plots/burial vaults
and debris removal (limited to whatever is left of limit after loss paid) -Non-owned premises the insured is temporarily
-Contents can be covered blanket or scheduled residing in
-Coinsurance; same as buildings -Vacant land owned/rented
-Need separate policy for; threshed grain, artificial insemination -Land a contractor is building a 1-2 family
tanks and contents, fertilizers and pesticides residence on for the insured
-Newly acquired farm premises (land for other
3)Machinery and Equipment business is not covered)
-Similar to usual commercial equipment policies -Tenants legal liability; if you use, rent, occupy a non
-Canada wide coverage for mobile farm equipment/attachments owned-premises
owned, used, or liable for -All risk coverage for residential premises and property
-You can pay more to insure farm tools, repair parts, -Excludes residence used by insured on the insured's
custom farming machinery, etc. premises and farm outbuildings
-Custom farming; using farm machines/ equipment for -Business liability; for business property and operations
others at their farm premises for compensation -Renting of parking spaces/stables
-Occasional bartering of labour is not custom farming, it is -Rental of part of the residence for office, studio or school
neighbourly assistance use
-Blanket or scheduled coverage available -Professional services are not covered
-Usually 80% coinsurance
-Loss of use; pays up to $5000 to ren similar machinery
-Newly acquired machinery covered up to 30 days
Motorized vehicle liability Coverage C - Medical Payment
-Get an auto policy, not covered here -Pays $500 to $10,000 for reasonable expenses incurred by persons
-BUT, liability for injury/damage occurring on the insured's premises accidentally injured within 1 year of the accident
is covered if the vehicle is not subject to registration because it is -Excludes;
used/stored on the insured's premises only -Insureds (residence employees are eligible)
-Insured vehicles if not being towed by a motor vehicle; -People attending their own business on premises (they
-Trailer in the coverage territory should have their own WCP)
-Recreational vehicles; golf cart, snow vehicles, ATV or -Persons eligible for their own provincial health coverage or
not subject to registration for use off public roads other plan
-Crawler, farm tractors, implements used on/off premises -Other exclusions similar to the bodily injury and property
-Equipment designed for off-public road is if not subject to damage coverage
registration
-Watercraft liability; Coverage D - Voluntary Compensation for Damage to Property
-Owned watercrafts, some may be covered -Covers damage accidentally caused by insureds where they’re
-Non owned watercrafts; no limit on size/type but no likely to not be liable or intentionally caused by insureds under 12
coverage for the watercraft itself years old
-Excludes;
Liability Exclusions; -Damage to property owned/rented by insured or their
-Liability arising out of the use, ownership, or maintenance of tenant/household (EX/ can’t use this coverage if you
aircraft/air cushion vehicle accidentally break a lawn mower you borrowed from your
-Liability arising out of ownership/use by or on behalf of the insured neighbour)
of any premises used for airport or aircraft landing strip and -Damage from ownership, use, maintenance,
incidental operations loading/unloading of a vehicle, trailer, farm machine, etc.
-Bodily injury to non-residence employees due to their work (basically liability from vehicles not covered)
-Farm employees are not subject to workers comp act -Persons insured; named insured, their spouse and relatives of
legislation either and anyone under 21 years old in the care of the insured. Also
-Need to purchase an employers liability coverage rider covers employees while in the course of their duties including;
(usually free for payroll under $20k) -Residence employees (maintains but doesn’t farm)
-Pays when employer is legally liable for injuries. -Farm employees; people paid to farm outside the dwelling
Limits are the same as other liability limits (includes full/part/seasonal workers), helpful neighbours
-Property damage to your own property or property occupied, used voluntarily helping and volunteers not being compensated
by, in the care, custody and control of the insured << Tenant’s legal -Coverage territory; world-wide coverage if claims brought to
liability covers this coverage territory
-Damage to your product if caused by the product -Covers goods made/sold by the insured in the territory
-Damage to your work performed by or on your behalf if caused by -Activities of insured living in the coverage territory but
the work away temporarily for farm business
-Property damage from substances released from aircraft (chemical -Electronic personal/advertising injury
drift of pesticides). If done by an aerial spraying company, their -Supplementary payments; covers defense costs and legal fees.
liability policy usually will cover. -Pays reasonable expenses incurred by the insured to
-Environmental exclusions; no coverage for land, air or Assist up to $250 per day
water pollution due to release of smoke, gases, waste, toxic -Insurer will pay to defend you against claims for bodily
substances, etc injury/property damage
-Coverages provided for bodily injury/property damage if -Insurer can investigate, negotiate or settle claims
the insured can prove that the release was caused by an -Pays bond premiums to release attachments for amounts
Accident. (heat/smoke from hostile fire still covered) Less than liability limit
-Accidental chemical drift not sprayed by aircraft if detected -Pays post judgement costs/ interest asset against less
in 5 days than liability limit
-Pays expenses incurred for first-aid
-Voluntary Compensation (Employers Liability) Rider
-No fault benefits to injured employees (helps prevent lawsuits) Premiums are based on; acreage of the farm/other premises and
-Weekly indemnity; pays up to $150 a week or 2/3rd of weekly farm operations
wages
-Only available if you buy employers liability first
-4 Coverage sections;
-Section 1 - Loss of Life and Funeral expenses
-Section 2 - Temporary total disability
-Section 3 - Permanent total disability
-Section 4 - Dismemberment benefits
Accident and Sickness / Travel Insurance Why Accident and Sickness Insurance?
-Disability; inability to work due to accident or sickness (mental or -Protects against;
physical) -Loss of health
-Loss of earnings
Worker’s Compensation Plan -Peace of mind
-Pays benefits if necessary and are no fault benefits (give up right to -Loss of insurability
sue employer) -Loss of assets
-Covers health care costs on top of provincial health plan -Loss of prestige and credit rating
-Rehab programs
-Lost earnings from missing work or if disabled Travel Insurance
-Death benefits and funeral expenses -For travels beyond home province
-Payment starts on day of disability and lasts for various periods of -Policy term; single trip (up to to 180 days each) or annual (unlimited
time trips)
-Individual or family coverage
2 Types of accident and sickness contracts; individual and group -Premium ratings depend on; individual or family, single or annual,
plan/policy age and health, # of trips, duration, policy limits, area of travel
-Benefit period; period where insurance is payable -No standardized policy
-Elimination period; period of self-insurance (longer=lower -Coverage territory is stated on policy
premiums) -Accident, illness and emergency; most policies cover accident and
illness
Individual Insurance -Accident; unforeseeable and unintended occurrence beyond
-Purchased by self-employed, people w/o group plan, high income insureds control
employees, or people seeking better coverage -Emergency; sudden and unforeseen occurrence and requires
-Disability income policy; provides monthly income during period of immediate attention
disability (insurer may set max) -Some policies will list the emergency expenses covered
-Disability; (can choose definition) inability to work in either -Dependant children; under 20 years old (26 if at college) or any age
-Any occupation reasonably qualified for is disabled (mentally/physically)
-Regular occupation -Pre-existing condition coverage isn’t automatic. Might cover if under
-Own occupation (broadest definition) control for 3-6 months
-Pays even while working another job -Coverage generally available for all emergency costs
-Premiums determined by; -Incidental coverage; most policies have limited coverage for;
-Claims cost; Policy type, personal info, types of benefits -Trip interruption/cancellation
-Policy type; depends on options -Pre paid travel fees
-Personal info; age, sex, occupation, history -Legal council
-Types of benefits; looks at benefits period (longer -Hotel convalescence
periods are more expensive), elimination period -Return of dead/car
(shorter is more expensive), definition of disability -Lost passport/tickets/baggage
-Operating expenses; insurers cost of doing business -Some cover accidental death/dismemberment
-Investment earnings; insurer will invest a portion of -Excludes issues arising from
premiums, rate of return influences amount charged -Pregnant related issues within 8 weeks of expected
-Suicide and attempt
Characteristics of individual insurance -Criminal act and attempts
-Application is part of the contract (amendments must be signed off) -Drug/alcohol abuse
-Insurable interest required; otherwise void (can’t buy insurance on a -War
strangers life) -From hazardous activity
-A person has insurable interest in their own life and -Covered by workers comp
immediate family, employee, any person they have financial -AIDS
interest in, and anyone you depend on for support -All policies are subject to provincial statutory conditions
-Unpaid premium; insurer deducts unpaid premiums from payout
-Incontestability; Can’t change application after 2 years
-Fraudulent statements can void policy
-Misstatement of age; will adjust premiums and benefits

Group Insurance
-2 types, weekly indemnity and long term disability
-Group insurance bought by employer to cover employees and ends
when employment ends
-Weekly indemnity; short term coverage and short
elimination/benefits period
-Long term disability; starts after weekly indemnity, ends @ 65
-Options include dental plan, major medical (extended
health care), accidental death and dismemberment
Regulation of Brokers -Failing to be frank and candid in dealings
-Competence; brokers must
The Insurance Act -Give competent guidance
-The main piece of legislation governing insurance here in Canada. -Understand insurance principles
Each province has their own version -Should not act beyond level of competence
-Administration; is the responsibility of the Superintendent of -Quality of Service; conduct that DOESN’T meet this
Insurance standard include;
-In BC; Superintendent of Financial Institutions -Failing to return calls
-In ON; Commissioner -Failing to give sufficient notice of non renewal or
-In BC, AB, SK & MB; licensing, complaint handling, trade renewal of new terms
practices and disciplinary issues are handled by Insurance -Failing to inform clients of alterations to coverage
Councils -Failing to offer appropriate insurance
-In ON; Registered Insurance Brokers of Ontario Act -Advising Clients; must be honest with advice. Conduct that
(RIBO) governs brokers DOESN’T meet this standard include
-Giving sweeping general assurance
Licensing Standards -Misleading clients about the true reason for
-Qualifications; remarketing; especially when there is a material
-Must be licensed; good character and reputation difference in premiums
-Must be sponsored by a brokerage/insurer -Failing to advise clients of a warranty/condition
-3 Step Licensing (BC and ON) -Confidentiality; cannot share client info with other clients
-Level 1; Can sell general insurance but -Fee Disclosure; cannot charge any fees in excess of
restricted to brokerage office and must be premiums unless clearly stated in writing with reason.
supervised Broker must justify fee when requested
-Level 2; Can sell general insurance inside or -Encouraging Public Respect; enhance public image of the
outside the brokerage. Cannot own or manage a industry
Brokerage -Maintain Professional Integrity; be professional, have good
-Level 3; Can manage/own brokerage customer service and report any breaches of insurance
-Class of license; All classes (other than life) cannot sell other types Regulations
of insurance -Don’t be abusive, offensive or unprofessional
-License Term; sometimes need CE credits to renew license. ON
1yr, BC 2yrs, NS 3yrs, SK 5yrks subject to annual validation The Role of Professional Associations
-License Jurisdiction; need license in province you do business in. If -Most brokers are members of their provincial broker’s association
you insure property in another province, get it countersigned by a -Enhance professional image of members; they enforce a higher
licensed broker than legal standards of conduct
-Must maintain high ethics or license terminated. License can be -Pledge to deal fairly and professionally with clients, insurers and
revoked for; fellow brokers (act honourably)
-Guilty of misrepresentation, fraud, deceit or dishonesty
-Contravenes any provision of the Insurance Act or its
equivalent
-Fail to remit premiums to insurer in due time
-Places insurance with unlicensed insurers without
complying with applicable legislation
-Proves to be incompetent or untrustworthy to transact in
their licensed insurance business
-Misuse trust funds

Setting Standards of Conduct - Other Influences

-3 Fundamental principles
-Priority of client's interest
-Disclose conflicts of interest; including potential conflicts
-Ensure suitability of the product to client; offer the most
suitable product

Role of Insurance Councils/ RIBO

-Enact by-laws and regulations regarding the ethical conduct of
brokers
-Brokers must meet the following standards
-Integrity; conduct which does NOT meet this standard
include;
-Conviction of criminal offense
-Misappropriating or dishonest treatment of clients
Money
-Taking improper advantage of client inexperience
Insuring Owned Automobiles Name/address of lessor if applicable, name/address of
-3 Types of Automobile Insurance Coverage lienholder if applicable, and if it was purchased used or
-3rd party liability new.
-Accident benefits; personal injury (no fault) -Insuring agreements; coverages, limits, premiums, minimum
-Loss of or damage to insured automobile retained premiums, endorsements
-Auto insurance isn't uniform; different in all provinces -Minimum retained premium; the minimum amount the
insurer keeps upon cancellation of the policy
2 types of insurers; Private and Government (compulsory) -3 Coverage sections; A-3rd party liability, B-Accident
-Private Insurers; for AB, ON and Atlantic provinces benefits,C-Loss of or damage to insured auto(own damage)
-Coverage provided by SPF 1 Standard Auto Policy -List of all drivers (in household or business); people not named on
(Owners form) ON uses OPF 1 Ontario Auto Policy policy can also drive. To list someone, you would need;
-Optional coverages provided by Standard Endorsement -Name, % of use, # of years licensed.
forms (SEF), ON uses OCPF -A regular user that isn’t listed will be denied coverage
-Facility Associations; insures those that don’t have -Must also attach certificate of driver training
coverage because they are deemed ‘substandard’ risks -Physical/mental Impairment; note anything that might affect safe
-Ensures coverage is available to all driving such as heart disorder,epilepsy,diabetes,vision problems, etc
-All private insurers are part of this and share in -Insurer can reject coverage or add restrictions as a result
results -Driver History; screens out undesirable drivers
-A driver is moved out of the FA once they qualify -Conviction history; previous 3 years
for coverage in normal markets -Accident and claims history; past 6 years
-Government Insurers (compulsory); in BC, SK, MB -Shows; vehicle, driver, date, type of claims, amount of
-Coverage differ by province payment and other descriptions
-BC $200k min TPL, AB included, and physical damage optional -License History (past 6 years); suspensions, cancellations, lapses
-SK $200k min TPL, AB included, $700 ded physical damage of license/permits, etc
-MB $200k min TPL, AB included, $400 ded physical damage -Insurance History (past 3 years) insurer name and expiry date of
-Private insurers compete for excess coverage only. Compulsory old policies. Give details if cancelled, declined, or refused renewal
has to be with government. -Use of Automobile;
-Examples include increased TPL, additional physical -Primary usage; pleasure of business?
damage, decreased deductible, increased AB coverage, -Is it used for commutes? Distance of 1 way?
excess coverages done as separate policy -Annual driving distance
-QC has a monopoly on personal injury coverage. -Business Use; notify if business use falls into;
-No Fault Insurance; covers the injured person regardless of fault - Rented or leased to others
-2 types; Pure and Threshold -Used for carrying passengers for compensation
-Pure no fault; removes right of legal action. Everyone -Used for carrying explosives/radioactive material
claims their own insurance company. MB and QC use pure -Used for transportation of good for compensation
-Threshold no fault; no legal action until past a certain -Owners forms exclude the above uses. Need to endorse
threshold for money or severity of injury -Declaration of Ownership; Declare registered or actual owner
-In SK; can choose modified no fault or tort; -Need info on both people because an owner w/ poor
-Modified no fault; claim from government insurer, but can history can insure the car under someone else's' name to
sue if amounts paid weren’t enough save money
-Penalty for False Statement; need to warn your clients for any
Application Form penalties. Generally, right to recover is forfeited if;
-Purpose; to get info for underwriting, rate setting and issuing policy. -False description of the auto to the prejudice of the insurer
Must be completed fully. -Knowingly misrepresent a risk or fail to disclose a required
-Called Owner’s Form SAF 1 (Standard application form) fact
-1 policy can insure multiple cars -Breach a policy term
-If compulsory government insurer; the insurance policy is -Commit Fraud
registration and proof of insurance -Willfully makes a false statement during a claims process.
-If private insurer; will issue separate documents Willfully meaning intended to deceive the insurer
-Insureds warrant that all of their statements are true and
Information Required; automatically gives permission to check
-Full name and postal address
-Needed for pulling drivers abstract Application forms usually have additional question on the back;
-Territory or use is related to loss potential -Additional information; drivers, # of cars in the household,
-Must include contact # and lessors name/address if leased type of fuel, details of any mods, car pool usage
-Policy Period; starts @ application time and ends @ 12:01 am local -For commercially rated vehicles, must provide additional
time at the address of the insured. Period usually up to 12 months, information in a Commercial Vehicle Supplement (CVS) such as;
but 3m to 2yrs is available - Use, type, radius of operation, type/ownership of attached
-Description of Automobile; model, year, VIN, etc equipment
-Needed for rating physical damage coverage (high price -Broker’s report; the broker answers questions such as;
car=higher premiums) applicant known to broker, new biz, coverage bound?,
-Higher priced/custom cars are expensive to repair premiums paid upfront
-To help with claim payment, must also provide; -Making UW Decisions; poor driving/insurance goes to FA
Auto Insurance - Statutory Conditions and Endorsements 7)Any Agent of the Insured Can Give Notice or Proof of Claims

Statutory Conditions; Legal duties of all parties to a contract 8)Any Party Can Terminate the Contract For Any Reason
-Section 2 to 7 do not apply to accident benefits
9)Written Notice to Insurer Must be Sent to Provincial Head
1)Material Change in Risk Office/Chief Agency
-Notify the insurer if you discover any material change (ASAP in -Written notice to insured sent to last known address
writing). Ex/ change in durable interest or the purchase of other
insurance
Common Endorsement Forms; used to add coverage for SPF 1
2)Prohibited Use by Insured
-Insured shall not use the automobile SEF 20 Loss of Use Endorsement
-Unless authorized or qualified to drive -Used if purchased section C loss of or damage to insured auto
-While prohibited by court -Covers reasonable expenses for rental of substitute auto, and taxi
-While under 16yrs old; or whatever age you can get a or public transit transportation
License -Has max daily and occurrence limits
-Used for illegal activity -Personal; $50/day, $1500/occurrence
-Race or speed test -Business; $200/day; $6000/occurrence
-No coverage if you knowingly let a prohibited driver drive -Coverage starts right away if the car can’t operate under its own
power. If stolen, the day after theft is reported. If can operate, then
3)Requirements Upon Bodily Injury or Property Damage when delivered for repair
-Promptly notify insurer of any bodily injury or property damage,
prompt notice is based on what’s reasonable SEF 27 Legal Liability for Damage to Non-Owned Auto
-Verify by oath that claim arose from use of auto and person using is -Can only be used if owner’s form is in a personal name, not
insured under this contract business
-Immediately forward legal papers to insurer; they have the right and -Loss to vehicle owned by you or anyone in your dwelling isn’t
duty to defend you again legal action covered
-Assist in defense; via info gathering, attendance, witness, etc -Coverage only when legally liable
-Insureds shall not voluntarily assume liability (except at their own -Use this if you regularly rent cars
cost) and interfere with any proceedings -Provisions; Covers the same stuff as Sec C, covers the same type
of car as the main auto, only 1 car at once, has per occurrence limit,
4)Requirements Upon Loss of Damage to Automobile and automobile used with owner’s consent
-Promptly report all details in writing
-Take reasonable steps to protect the auto from further loss; SEF 32 Recreational Vehicle Endorsement
additional losses from failing to protect are not covered -Used if you have a recreational vehicle insured under owner’s form
-Make statutory declaration detailing loss within 90 days -Covers while unlicensed or if used by unlicensed person off public
-Insured cannot make repairs other than those immediately highways (ATVs or snowmobiles)
necessary to protect the auto;
-No removal of evidence either without the approval of the SEF 43R Limited Waiver of Depreciation Endorsement
insurer. Insurer has a reasonable time frame for inspecting -Depreciation does not apply for 2 years on new cars
auto -Coverage for the minimum of the actual purchase price or MSRP
-Insured must submit to an examination under oath and submit all -Replacement cost options; get a new car or cash of original
related documents purchase price plus inflation
-Insurer pays ACV; depreciation applies
-Depreciation factors; exterior paint, trim, mechanical SEF 44 Family Protection Endorsement
condition, mileage, interior, equip/acc, and tires -For extra protection in case of death or injury from an uninsured or
-Repair or Replace; insurer must notify insured within 7 days of under-insured driver
receiving proof of loss -Persons covered;
-No Abandonment or Salvage; insured is still responsible for the -Named insured and spouse if living in same dwelling
wreck after loss. Insurer has the right to the wreckage after they paid -Dependent relatives
in full -Limit is your own TPL minus the liability limit of at fault driver
-In case of a disagreement on amount paid, an appraisal -Basically covers the shortfall of the other driver up to your liability
will occur limit

5)Inspection of Automobile; at any reasonable time

-To verify vehicle details

6)Time and Manner of Payments

-Payment within 60 days of proof of loss or 15 days after appraisal
-Have 2 years to initiate legal proceedings for damage or bodily
injury
Automobile Insurance Policies Section C - Loss of or Damage to Insured Automobile (Own
-SPF 1; Standard Automobile Policy (Owners Form); forms the basis Damage)
for auto insurance in all provinces -Only SK and MB require own damage coverage via government
-4 sections; A to D plans. Can still go to a private insurer for a lower deductible
-Lender will also require own damage coverage (to protect assets)
Section A -Third Party Liability -Insurance agreement; covers accidental loss or damage to
-All provinces require min $200k (QC= $50k) automobile and equipment
-No deductible -No fault basis
-In private insurance provinces; issues a pink card for proof of -Coverage options; All perils, collision/upset, comprehensive
financial responsibility -Collision/Upset; collision w/ object or roll over (with wall or
-In compulsory government insurer provinces; vehicle registration other cars)
serves as proof (can get fined if no proof) -Comprehensive; everything except collision and upset
-Insuring agreement; covers when insured is legally liable -Excludes collision with attached objects and
-Person insured; the named insured and anyone else collision with the ground or any object in/on
driving/operating part of the vehicle with their consent ground (potholes)
-Priority of payment rule; 80-90% of the limit goes to bodily injury if -Comprehensive is restrictive, usually buy with
the limit is insufficient collision and upset
-Will need high limits if you’re transporting passengers or other -Specified perils; covers just the ones named.
peoples goods for payment -Covers fire, windstorm/hail, failing objects,
-Exclusions; applicable in all provinces lightning, explosion, earthquake, riot, theft, flood,
-Anything covered under WCP accident involving any conveyance transporting
-Injury to insured’s employees out of operation or repair of the vehicle on land/water
the insured automobile -All perils; broadest. Get this and you won’t need the
-Damage to cargo. Need special cargo insurance for others. Theft definition is broaden so it covers if stolen by
Coverage housemate, or employee theft
-Liability coverage for insureds DUI are covered (except in SK) -Deductibles; different options can have different deductibles
-No deductible for loss by fire, lightning, theft of entire
Section B - Accident Benefits vehicle, collision with wildlife (in some provinces)
-Mandatory in all provinces except NL -In BC and other; insurer pays the amount of loss minus
-Persons entitled to collect benefits include; insured, spouse, Deductible
dependents living together, occupants of vehicle, and pedestrians -In SK and MB; when physical damage coverage is with a
(with limited benefits) private insurer. (Different calculations)
-Benefits provided on a no fault basis -Exclusions; This policy excludes
-Amounts vary and are not intended to indemnify anyone. In most -Loss or damage to or by tires, corrosion/wear and tear,
provinces you can sue for the excess mechanical breakdown, freezing or explosion in
-In no fault provinces; limits or eliminates this right combustion chamber
-Insuring agreements; -Where insured drives or operates the vehicle while DUI or
-Medical payments; for surgery, dental, ambulance, rehab, crutches, if convicted of alcohol/drug related offense later on
etc -If insured knowingly permits an VMA violator to use
-Pays amounts in excess of any health plan Automobile
-Funeral expenses -Trailer contents, tapes and related equipment; can insure
-Loss of income if unable to work under habitational or business prop policies
-Unemployed spouse gets limited money -Additional Agreements; insurer also covers
-Benefits paid weekly with a 7 day wait period -General Average; survivors insurers will pay for the loss
-Must prove that they were employed at time of accident, or -Salvage; pays all costs of preventing further loss
if above 18, prove they were employed for 6/12 months -Customs duties of Canada/USA
-104 week limit -Fire department charges; if called from another city
-Death benefits go to surviving spouse/dependants -Won’t subrogate against authorized users of vehicle
-Uninsured motorist coverage; Not applicable to atlantic provinces (people allowed to have care, custody and control), but will
-Insured's policy will pay excess if uninsured or unidentified subrogate garagers, convicted of a DUI or related offense,
motorist causes loss and those who breach policy conditions
-Uninsured auto; neither driver nor owner have valid -Covers damage to a temporary substitute vehicle if insured
insurance is liable under law or contract
-Unidentified auto; must cause loss by actual contact. -Gives same coverage as what you have under
Means can’t ID owner or driver. Must report to authorities Section C
within 24hrs, file a sworn statement within 30 days, and -Loss of use by theft of an entire automobile, have
allow insurer to inspect damaged car coverage for $25/day for 30 days. Pays coast of alternate
-Exclusions transportation. 72 hr wait period
-Suicide or attempt, or if covered by WCP
-No medical or loss of income payments to Section D - Uninsured and Unidentified Automobile Coverage
-DUI Driver (charged w/ breathalyser offence) -This is part of Section B in most provinces except ON and atlantic
-Driving while unauthorized or unqualified -Persons insured; anyone with insurable interest
-Forgot to renew license is still “authorized”
 -Owner of the vehicle can claims damage to vehicle -Not owned or leased by employer of insured/household
-Owners of tenants can claim for loss or damage to -If insured owns a commercial vehicle or has drivers other
contents of insured automobile than spouse, need a special endorsement
-Occupants or pedestrians can claim for bodily injury -Car renters will get same TPL, AB as their own policies
-If insured is a business, directors, officers, employees, and -Would need SEF 27 for physical damage
Households count as insureds too Coverage
-Insured and household dependants can claim for bodily -Temporary substitute vehicles are covered because the
injury or death while in any vehicle insured can’t drive 2 cars at once
-Covers only if UMP driver is legally liability -Trailers connected to car is 1 car
-Uninsured automobile; owner and driver don’t have liability -If the insured is a business entity, you have TPL, AB, for
insurance in force non owned cars, but very restrictive. Get SPF1
-Unidentified automobile; can’t ID owner or driver
-Can only claim if reported to authorities in 24 hours, file -2+ Automobiles
statement in 30 days or asap, an insurer can inspect -Need separate policies under separate limits
vehicle -Trailers and cars treated as 1 vehicle under TPL
-Gives coverage for bodily injury or death caused by uninsured or and AB
unidentified automobile -If at fault vehicle isn’t owned by insured and insured
-Also covers damage to insured automobiles and contents when doesn’t insure all cars with the same insurer; limits are
caused by uninsured auto where the owner/driver has been ID’d. adjusted proportional with other policies
$250 deductible and loss of use is covered -War risks excluded
-Limitations -Excluded uses;
-Only pays up to provincial mandatory limit -Renting to others
-If damage occurred in another province, insurer is liable for -Carrying explosive/radioactive materials
minimum amount -Carrying passengers for compensation; carpools are okay
-No payment if you can claim from unsatisfied judgement
-When other insurance exists, UMP only pays excess
-Determine liability and damages by
-Written agreement
-By arbitration; when requested
-By court; if worse comes to worse
-Notice of proof of claim; steps required for bodily injury and death
claims
-Written notice to insurer within 30 days
-Proof of loss in 90 days
-Medical report; cause/nature of accident
-Provide details of other contributing insurance
-Insurer can investigate
-When not eligible for coverage D, you can apply to faculty
association for coverage (limited to $200k)
-Not eligible if not insured by an auto policy, has other
insurance that is inadequate
-No payment for damage to car if claimant was controlling
the car
-Property damage claims have deductibles

General Provisions; Applies to the whole policy

-Occupant; driver or passenger
-Consent; anyone who uses the car without insured's consent has
no coverage
-Territory; CA and US only + vessels traveling between the 2
-Garagers are excluded (car dealers, repairman, storage, valet.
They need an SPF 4
-Definition of automobile; in section A B C and D
-The described automobile; the one specified on the policy
-A newly acquired automobile is covered if it replaces
described automobile, extra car if all cars are insured with
the same insurer and automatically covers new purchases
for 14 days but must buy own policy after
-In Section A B and D any other private passenger vehicle is
considered an automobile and can be insured if
-Car not owned/regularly used by insured or housemate
-Insured is an individual/spousal couple living together
-Not business use