EXCLUSIONS: THE NO COST ‘EXTRAS’ YOU DO NOT WANT TO BUY
Not all policies are created equally. A review of some General Liability and Property insurance products that are marketed to the media community as “real insurance” reveals some scary and completely unnecessary policy exclusions. If you are in the business of photography or media industry, buyers beware.
Some examples of frequent exclusions to General Liability policies catering to the photographic and media industries are:
- Erroneous Distribution
- Errors & Omissions
- Assault & Battery
- Exclusions or extreme limitations on Personal or Advertising Injury
Why should your small business fear these General Liability exclusions?
You buy any insurance policy for the unpredictable and unpreventable occurrences in your business life. Do you really want a claims adjuster to interpret your insurance policy following a loss, only find the unusual coverage exclusion? Unnecessary exclusions sure make denying your claim easier.
Take Assault & Battery Exclusions as one problematic example. You or your eighteen year old assistant is accused of intentionally threatening physical harm upon someone at a shoot? Stranger things have happened, especially considering that an “assault” or “battery” is a broad legal term; in fact an “assault” does not even require actual physical contact to occur (see dictionary.law.com). Regardless of how ridiculous the allegation against you might be, shouldn’t your General Liability insurance carrier at least provide you with a lawyer to defend you? You won’t have a prayer when you buy a policy that excludes coverage for Assault & Battery. And, some other advice if your policy excludes Assault or Battery: whatever you do, don’t break up a fight at a wedding.
Take Personal and Advertising Injury Exclusions as a second example. This coverage is fairly standard. So long as you are not shooting original motion pictures, publishing original books or other media for widespread public consumption, or are in the advertising business, personal injury and advertising injury coverage is not all that difficult to obtain. Should a photographer expect this exclusion by default? Absolutely not.
Personal and Advertising Injury Liability can be built into your General Liability policy. When it is, it covers invasion of privacy, among a number of other liability concerns you should have, since all artists, to some degree or another, invade privacy to obtain the right lighting and angle. Even those professionals who manipulate existing images face the potential for personal injury. Anyone in the media business really needs this coverage.
Why do so many insurance carriers promote their insurance products as the everyday coverage a photographer, graphic artist or other media professional should buy, when you later discover, the coverage is actually extremely diluted and probably not even worth the $175 you paid to buy the policy?
The Most Compelling Reasons Not to Purchase a Policy with ‘Extra’ Exclusions
- Because if the brokers who offer the policy advertise that they specialize in media, arts, or photography, and, at the same time, will offer you substandard coverage with unnecessary exclusions, they are not specialists in your field at all. They are just trying to sell insurance to you, of any kind, at any cost, regardless of final quality. When you are not doing business with a specialist, do not expect special understanding of you or special treatment of your studio when you have a question or file a claim.
- Because you (the insured) will put yourself at odds with your insurance carrier in the event you file a potentially excluded claim. Exclusions already exist in EVERY insurance policy. So, it does not make sense to buy one with extras.
- Because unusual exclusions reflect a lazy insurance broker. These unusual exclusions are inserted into your policy, and in every other policy the broker offers, for one clear reason. The insurance brokerage does not want to take his time to (1) review your application for accuracy, (2) examine your website, (3) inquire about previous losses or claims, and/or (3) discuss your true insurance needs with you. To do so requires time and money the broker does not want to commit. Rather than evaluate your particular needs and business operations, even when most media businesses do not justify adding unusual exclusions, these unnecessary exclusions become elemental to all policies sold by the broker when the broker or carrier is unwilling to consider your business for what it is.
- Because the carrier excluded coverage for a reason. Why else would the insurance company add an unusual exclusion unless there is concern for a large unanticipated or uncontrollable claim? Insurance companies often exclude coverage for what most is the greatest uncontrollable or unknowable risk. Most of these unusual exclusions should then be viewed as the insurance company avoiding coverage for either very frequent or very expensive claims.
- Because you might actually file a claim that is barred from coverage by one of these unusual exclusions.
- Because you can find stronger coverage and better protection provided by other policies. Stretch your insurance premium dollars further when you buy a policy not diluted by coverage exclusions. You might pay $10 a month more in premium, but you will receive the security you deserve when you file a claim.
Other Common Warning Signs of Weak Coverage
Besides actual Exclusions added to the policy, some programs offer relatively weak coverage in other respects. Consider these catch-phrases as being warning signs of weak coverage:
- Master Policy or Program. Often you will not even see a copy of the actual policy unless you request it. Instead you will see a “certificate of coverage.” In a Master program, your business in essence entitles you to become a shareholder in one large policy. The problem with purchasing coverage in this manner is that your insurance policy is better when it operates as a closed savings account only accessible to you. This approach provides you, the policyholder with far better security and control.
- “Limits are shared by all members”. It does not make smart business sense to pay a premium for coverage and risk the availability of your insurance limits to the actions of other insureds. Buy a policy for yourself.
- Policies that start at $150 dollars. Look you get what you pay for.