With our own brand of legalese, I sometimes feel like I am speaking a foreign language when trying to answer questions about insurance.

In an effort to promote understanding, herewith are answers to some of your most asked questions which have been translated from Insurance-speak to English.

For all you youngsters out there, what follows is an old-fashioned, print version of FAQs.

What do they mean by third party liability?The first party is the insurer [insurance company].  The second party is the named insured [that's you].  The third party is the person who has suffered an injury or some other loss [usually a patron or property owner].  Your groups general liability insurance is written to protect you from third party claims.

It seems just about every business we deal with wants to be named an additional insured.  Is it just us? No.  With everybody suing everybody else, businesses have to find ways to protect themselves.  Being named an additional insured offers some protection.  The city wants to be named an additional insured before you rent the municipal auditorium. The business next door will let you use their parking lot on performance nights but only if you name them an additional insured. Remember, however, it works both ways.  They want your insurance to protect them as an additional insured.  You should require their insurance to protect you as an additional insured whenever appropriate.

We have to get three or four additional insured certificates a year now. Our insurance company charges us $25 every time we need a new one. Isn't  there some way to do this without getting charged for it every time? There are several matters here.  First of all, is it your insurance company or insurance agency that is charging you?  Naming an additional insured used to be fairly complicated and required the insurance company to process an endorsement.  Most policies now include language that allows additional insured certificates to be issued without a separate endorsement.  Since this makes it so quick and easy, many agencies no longer charge for it.  In a shameless bid for your business, the AACT-endorsed insurance program does not charge for any additional insured certificates that can be issued without the old endorsement forms.

Somebody asked us if our theatre groups insurance had “med pay coverage’.  What is it and do we need it?  If your general liability coverage includes a Medical Expense Limit, in a claim it will provide payment of medical and similar expenses without regard for liability.  If medical expenses can be paid without regard to negligence, everyone wins.  The insurance company saves the cost of a lengthy investigation and possibly larger settlement.  The theatre group is relieved that the claim has been covered by their insurance and settled quickly without dispute.  The third party claimant is satisfied that the medical expenses resulting from the injury have been paid.  It is good coverage to have within your general liability insurance.

I am newly elected to our board.  I was told we do not need Directors and Officers liability insurance because my home owners policy provides protection.  Is this true? Some home owner policies carry some kind of extremely limited protection.  Since the law allows  a claimant to come after your  personal assets [your house, your car, etc] as well as the assets of the theatre group, I would read my home owner’s policy very, very carefully.

I was told our policy has a million dollar liability limit but when I looked it says $2,000,000. Aggregate and $1,000,000. Per Occurrence.  Can you translate this into English? It means your policy will pay up to $1,000,000. on any single claim.  It will not, however, pay more then $2,000,000. on all claims combined during a given policy period.

I thought we had boiler and machinery coverage in case our furnace breaks down but I cannot find it anywhere. Look for something called Systems Breakdown coverage.  With the development of all kinds of sophisticated electronic “systems” such as integrated furnace and air-conditioning units, computer driven light boards, etc, this coverage is intended to cover what we old-timers used to call boiler coverage when the only “system” was the steam boiler used to heat the building.  Systems breakdown insures against mechanical breakdown and electrical disturbance but not normal wear and tear.

Got questions?  Got answers!But if my answers are still too much like Insurance-speak, let me know.  My goal is to inform; not confuse.

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