“Am I covered?” the client asks.

“Yes” is never an adequate reply -- too much room for interpretation regarding the how, what, why, and where of coverage for a single-word response to ever apply.

Consider one PAR insured client whose business was the delivery of travel trailers from the manufacturer to dealers across the country.

The motor truck cargo policy this delivery business had with its previous agency was rated on revenue. When the business became a client of the PAR-insured firm, its policy was rated based upon the number of trucks. The revised rating basis was problematic since trucks and drivers changed frequently; many of the operators owned their trucks and only worked part-time.

In addition, the replacement motor truck cargo policy required units and their drivers to be disclosed within two days of the client putting them into service. The insurer denied coverage for an accident because a truck and driver were not listed on the policy.

The client steadfastly maintained it had wanted matching coverage with the switch to the new motor truck cargo policy. Therefore, the delivery business had continued to believe that its rate was based on revenue -- not on the number of trucks. This belief was bolstered by the fact the client made no requests to add trucks or drivers until after the loss had been denied.

Was the travel trailer delivery business covered? Yes, but with distinct differences from the prior coverage -- differences which should have been explained in detail.

The indemnity portion of this case was settled for approximately $40,000. Legal expenses topped $45,000. Had there been written documentation to the client about the policy provisions and how they varied from the previous coverage, the errors and omissions claim could have been avoided.

“Am I covered?” the client asks.