Let’s be honest, admins have the impossible job of reviewing countless details to prevent a general liability claim from being denied. The myCOI team has software that does this job accurately and helps you save time and resources!
When it comes to general liability claims, it’s important for your organization to know that when a claim is submitted, it’s accepted. But deciphering the complexities of a CGL policy can be downright tricky, especially when the nuances seem to change. In this post, we will discuss some of the most common but preventable reasons that general liability claims can be denied. As you know all too well, it’s up to you and your organization to ensure all of the boxes are checked, the i’s are dotted, and the t’s are crossed on your and your vendors’ insurance policies; so when you do have to submit a claim, you’re confident in the outcome.
Exclusions Do Not Create Coverage
You may have heard the saying, “exclusions do not create coverage.” An exception to an exclusion may appear to grant coverage, IRMI explains, but it is nonetheless derived from an exclusion. And it is not possible for an exclusion (or its exception) to broaden the initial agreement—only limit or restrict it.
This “exclusions do not create coverage” principle doesn’t negate the equally important principle that the commercial general liability claim policy must be read as a whole. For instance, a complete review of all of the general liability claim policy may provide a court a better understanding of the overarching scope of the agreement. Considering the entire policy—which includes all exclusions—to improve the court’s grasp of the insuring agreement simply does not violate the “exclusions do not create coverage” battle cry.
Whether it is understanding exactly what coverage is removed by an exclusion or added by an endorsement, reviewing the details and exact language in the policy’s forms is a critical step in preventing a general liability claim from being denied.
Causation and General Liability Claims
Phrases such as “caused by” and “resulting from” are significant to coverage interpretation and another reason that a thorough review of the CGL policy is so important. These and other commonly used phrases that indicate causation, such as “arising out of”, are important to commercial general liability exclusionary wording, but the implications can also extend to coverage grants as well. For example, IRMI explains that personal and advertising injury is defined to mean injury arising out of the listed offenses.
Protect Your Organization from General Liability Claim Denial
Sometimes a single word or phrase in a contract or certificate of insurance makes all of the difference as to whether a general liability claim is accepted or denied. Compliance administrators have the impossible job of reviewing every single certificate and all endorsements to verify compliance for vendors and contractors. One missed line, phrase, or term? An individual left off the contract? An endorsement not in place? It could mean that an important claim is denied. However, there is a solution that can not only save organizations time and resources, but can help protect them by verifying all of the facts well before a general liability claim arises.
Certificate of insurance tracking services like myCOI exists for one reason: to help organizations handle the everyday tasks of managing certificates of insurance and protect companies against underinsured claims, costly litigation and failed audits. The software is an easy-to-use, cloud-based solution developed and supported by a team of insurance professionals and is built on a foundation of insurance industry logic to automate the certificate of insurance communication process and ensure you remain protected.
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