Thursday, 2 May 2013

Insurance Contract Legal Information for Small and Medium Sized Businesses

Insurance Contracts

By Gary Courtney,  Barrister & Solicitor

Providing Information to Assist Small Businesses

Typically most businesses will have fire insurance, business interruption insurance, and general liability insurance. Less common types of insurance include motor vehicle insurance, life insurance for owners and employees, and disability insurance for owners and employees.

Obviously insurance contracts can be critical to the life of one’s business, or for yours or your employees well being. For virtually all of us, the only time insurance policies are gone through in detail is when a claim is being made. Sometimes the policy will first be reviewed when the insurance company has denied a claim.

Insurance policies tend to be very long, very difficult to read and understand, and have a good deal of “fine print”. In spite of this, these agreements need to be thoroughly reviewed BEFORE one needs to make a claim. If is important for any business to obtain the advice of a good insurance broker or agent, with experience in assisting business owners.

If one does not have the time or inclination to review insurance policies exhaustively, one can lessen the risk of not obtaining proper coverage by making it clear to the insurance agent/broker, what kind of insurance coverage is desired, to cover what eventualities. Your request for advice from the agent/broker should be in writing, keeping a copy for yourself. In the event that a claim is made for insurance coverage of the kind you instructed the agent/broker you wanted, and it turns out that coverage was not provided, it is possible that one will be able to claim negligence against the agent/broker,

It is good practice to ask the insurance agent/broker to explain (in writing), the exclusions under the insurance policies. In the event your claim is later denied for an exclusion that was not set out, one may be able to successfully claim against the agent/broker, or insurance company for coverage.

Never give false information, or omit to provide relevant information to an insurance company. Information that one fails to mention in an insurance application, often will be grounds for a denial of coverage when a claim is made.

It is good practice to review the adequacy of insurance coverage periodically as one’s business grows and changes.

In the event that a claim for insurance is denied, consult with a lawyer. When one makes a claim on insurance, one becomes a liability to the insurance company, which liability the insurance company often attempts to minimize. Sometimes an over zealous insurance adjuster will interpret terms of the insurance contract in ways that will not stand up if challenged. It may be that a letter from the lawyer will change the adjusters decision. Courts generally will interpret provisions of insurance agreements strictly against the insurance company.

For more information contact Courtney Aarbo Barristers & Solicitors at 3rd Floor 1131 Kensington Road N.W., Calgary Alberta T2N 3P4 or or phone 403-571-5120.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors

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