Perils
Examining insurance policy contract options and comparing coverage for perils is one of the most important elements to consider when shopping for coverage. In other words, identify what is covered and how much you are covered for. These are the causes of loss such as negligence, an accident, a fire, slip and fall, subpoena, deposition, witness testimony, or even a licensing board hearing. They are also referred to as named perils which are risks that the insurance policy indemnifies the insured for. Frequently, there are stated sub-limits and stated limits for certain perils. There are also frequency limits during a policy year for certain perils.
For example, most general liability policies limit coverage for a fire peril to one claim per policy year. The NASW Risk Retention Group’s general liability policy has no frequency limits for fire perils. Most insurers have a deductible in their insurance policies. That means that the insured, YOU, pay the first stated amount of the claim. The NASW Risk Retention Group has no deductibles on any of its products.
There are also excluded perils listed in the insurance policy contract. That is why it is very important for the insured to fully read the insurance policy contract language to understand what is actually covered. Some insurance policy contacts are subjective and unclear.
Moreover, some have proviso clauses that actually reverse or restrict the stated meaning of the coverage. Often times the exclusions are written in a different part of the insurance policy contract, so a gap in coverage may exist that the insured is not aware of. That is why it is imperative that you buy your insurance coverage from a provider who you trust, and who has your best interest at heart. Beware of a commission driven insurance agency when you buy an insurance policy.