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Frequently
Asked Questions
Business Questions
Why do I need to carry Workers' Compensation insurance?
This policy is used to comply with the Workers' Compensation coverage
required by state law. Under this requirement, an employee can be
compensated if an injury or occupational disease arises out of and in the
course of employment. Benefits are payable for medical costs, temporary or
permanent disability including lost wages, vocational rehabilitation, or
death. Specific requirements and benefits can vary from state to state.
In Oklahoma, the Workers Compensation Act applies to employers with 1
or more employees, whether full- or part-time. "Covered
employees" include corporate officers as well as managing members of
limited liability companies. (EXCEPTION: Officers who reject coverage AND
are not paid salary or wages on a regular basis at an agreed upon amount,
OR non-compensated officers or employees of tax-exempt 501(c)(3)
corporations, are NOT considered employees under the Act. Farmers
whose payroll is less than $100,000 annually and Domestic employers whose
payroll is less than $10,000 annually.) Sole proprietors, partners
and non-managing members of limited liability companies are considered to
be owners, not employees, and thus are not covered under the Act unless
they voluntarily elect in writing to be included.
Employees of uninsured subcontractors may be considered your employees.
Farmers must provide coverage if they have 3 or more full-time employees.
Domestic, casual or farm workers are not otherwise covered automatically
but employers may arrange Workers' Compensation coverage for their
benefit.
Just what is covered by General Liability insurance anyway?
This coverage protects against claims arising out of an accident which
results in alleged bodily injury, personal injury or property damage which
you neither expected nor intended. It includes protection related to
premises you own and/or occupy, operations or services you render or
arrange for others to render on your behalf (e.g., a subcontractor), and
products you sell. Coverage payments can include judgments, attorney's
fees, court costs, or other related expenses.
Occurrence General Liability coverage applies to a claim that occurs
during the policy period regardless of when the claim is made against you.
This is the most common policy form. Claims Made General Liability
coverage applies only to a claim that occurs and is reported after a retro
date during the same policy period. This latter policy form is normally
used only for Professional Liability (Errors and Omissions) coverages rather than General Liability
coverage.
What are adequate liability limits for my business?
This question has received considerable attention over the years by
insurance professionals and legal advisors without resulting in definite
answers. The question is somewhat akin to posing the query "How high
is up?" Nevertheless, there are some perspectives which may be
helpful in determining the amount of liability insurance limits to
purchase. These might include:
- Attempt to ascertain the largest judgment rendered against your type
of business within the judicial area in which you are located or in
which you sell your product or service. (Even then, you may not be
willing or able to afford the cost of purchasing insurance to provide
sufficient liability limits to cover any such awards.)
- Examine your balance sheet (assets v. liabilities) to determine what
you have to lose and thus need to protect. (Remember, however, that
liability losses resulting in judgments or out-of-court settlements
generally have no respect for wealth or lack of it.)
- Similar to setting liability limits based on your balance sheet, use
your income statement for the same purpose. (However, the same concern
regarding losses v. wealth still applies.)
- Consider liability limits you can afford or with which you feel
comfortable. (Unfortunately, this practical approach does not provide
"a quiet night's sleep" for most business owners, especially
if you realize that the next verdict could easily exceed your limits
several times over.)
- Review all business contracts you have signed, including premises
and/or equipment leases, etc. for their specific liability limit
requirements -- most contracts will have them! This may determine at
least the minimum liability limits you should carry just to comply
with the contract provisions.
- Consider what level of liability protection is being carried by
other area businesses and competitors similar to yours. While we
cannot disclose confidential client information, our agency is a good
source of general information of this nature because of the number and
cross-section of businesses we insure.
All of this causes one to ask what a business owner can do to determine
proper liability limits if the techniques previously listed are filled
with uncertainty. There is no one acceptable and simple method. It
requires an examination of the legal climate, or perhaps various legal
climates, the type of exposures presented, and all of the previously
suggested parameters.
Nevertheless, we suggest you carry at least a minimum limit of
$1,000,000 each occurrence for bodily injury, personal injury and property
damage combined, preferably supplemented by an umbrella liability limit of
at least $1,000,000 each occurrence. On policies written under the
Business Owners coverage form, we suggest at least a $1,000,000 primary
liability limit.
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Personal Auto
Do I have to buy uninsured motorist insurance for
drivers who don't carry insurance?
No, but state law requires that all Oklahoma automobile insurance
agents offer uninsured motorist coverage to you and we suggest that you
purchase it. This coverage protects you in the unfortunate event that
you are hurt in an accident by a driver who is at-fault and either does
not have liability insurance or does not carry enough liability to pay
your medial expenses.
It does not give insurance to your uninsured vehicles. Uninsured motorist
coverage only applies to bodily injury that you or those riding with
you sustain. If you are injured by an uninsured driver, your own
policy covers your medical costs and other related
expenses up to the limit that you purchase. Your insurance company will then take action against the
responsible driver.
If I write my homeowners and auto insurance with the same company,
will I get a reduction in my rate?
Probably - most insurance companies now offer an account credit when
they insure your home and automobiles. Check with your agent to see if
your company gives this discount.
I don't have many assets, why do I need higher liability limits?
Because we live in a lawsuit-conscious society, the higher your
liability coverage, the better. Whether you have substantial assets or
not, your are still at risk from large damage settlements. If you lose a
lawsuit, your wages can be garnished; it could take many years to pay
damages in full.
Does my auto policy cover me when I rent a vehicle?
If the car is rented in your personal name in the US or its
territories, most auto policy provides the same coverage on the rented
automobile that you carry on your own car. However, there may be other
expenses in the rental contract that your policy does not cover. An
example would be loss of the rental fee or a service charge. The only way
to be sure that you have maximum coverage is to purchase the optional
insurance offered by the rental agency. Motor homes or commercial types of
vehicles such as moving trucks are not covered by your personal policy.
If I let someone else drive my car and they have an accident, whose
policy covers, mine or the drivers?
Anyone who has permission to drive your car is covered under your
policy. The insurance policy which covers the vehicle pays first. The
driver's policy may provide secondary coverage.
Will my auto policy pay for a rental vehicle if my car breaks down?
No; the rental reimbursement coverage on your auto policy does not
cover mechanical breakdown. It will pay the cost to rent a comparable
replacement vehicle up to your policy limit if your auto is un-drivable
because of damage covered under the comprehensive or collision sections of
your auto policy.
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Personal Property & Casualty
Will my homeowners policy cover my lost jewelry?
Most homeowners policies provide limited coverage for theft of jewelry.
Misplacing jewelry, however, usually is not covered by basic homeowners
insurance contracts. If you carry optional valuable items coverage for
jewelry or your homeowners policy provides "all risk" coverage,
misplacement of jewelry is covered. Most homeowners policies contain some
restrictions or limitations for this coverage. Ask your agent about your
specific coverage.
Does my homeowners policy cover the food in the refrigerator or
freezer that was lost during a power outage? Probably not, but most
companies offer this coverage as an option for an additional charge. The
optional coverage usually covers power outages as well as failure of the
appliance. A typical coverage limit is $500 with no (or a small)
deductible.
Lightning hit a tree in my yard. Will my homeowners policy pay to
cut it down?
Most homeowners insurance policies include some coverage for the value
of trees damaged by lightning. If a tree falls on covered property, such
as your home, most policies will also cover the reasonable cost to remove
it from the house. Only very nominal coverage, if any, is provided for
debris removal when trees fall in the yard without falling on covered
property.
My tree fell on my neighbor's house, does my homeowners policy cover
the damage?
Your policy only provides coverage for your neighbor's damage if you
are careless or negligent in some way. If a tree on your property creates
a hazard because it is damaged or diseased, it is your responsibility to
remove it within a reasonable time. If you fail to remove the tree and it
falls on your neighbor's house, your homeowners liability insurance will
cover the neighbor's damage. If a healthy tree falls on your neighbor's
home during a storm, your policy does not cover the damage. Your
neighbor's homeowners insurance will, however, subject to the deductible.
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Group Life and Health
How many participants does it take to purchase group health
insurance?
Within certain participation guidelines, 2 participants is the minimum
number required to set up a group health policy.
What is the participation requirements to fulfill the group health
insurance requirement?
Generally, 75% is the industry norm, however, within smaller
populations (under 5), a slightly higher participation level may be
required.
If we switch group insurance carriers, will we have to serve another
waiting period for pre-existing conditions?
Due to the new federal legislation, credit for previous coverage may be
extended to group participants. For specific cases, check with your agent
or refer to the Health Insurance Portability and Accountability Act of
1996 for guidelines.
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Individual Life and
Health
I don't know how much life insurance I need?
How much life insurance is enough?
An agent will be able to help you determine who
needs life insurance at your death and to analyze how much coverage is needed.
What kind of information do I need to provide
an agent to work on life or health insurance coverage for me?
An agent can prepare a quote, with your answers
to only a few questions; such as your age, some life style questions, current
medical conditions and where you reside. The actual application will be more
detailed, regarding your health and previous health insurance information.
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