Be the GAME CHANGER.

Transcription

1 Be the GAME CHANGER.

2 DISCLAIMER Seminar materials and presentations are intended to provide you with guidance and insight with regard to the selected topics. However, your instructor is not an attorney; and the materials and comments do not constitute, and should not be regarded as, legal advice. Although every effort has been made to assure the accuracy of these materials and the comments made during the seminar, they are not intended to serve as a substitute for legal counsel. Policy forms, clauses, rules, and court decisions constantly change and vary from company to company and state to state. These materials are intended as a general guideline and may not apply to a specific situation. The author, instructor, Professional Insurance Agents of Indiana Inc., and any organization for whom this seminar is conducted shall have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this book, in the presentation, or in any ensuing discussion. Presented by Professional Insurance Agents of Indiana 50 E. 91st Street, Suite 207 Indianapolis, IN

3 Mark Reilly Mark has been in the insurance industry as a company production underwriter, agent, agency owner, speaker, author and expert witness almost 40 years. He was an agency owner for nearly 30 years. Mark currently is an owner of inbuzz Group, and Inbound Marketing and Sales company. He is also employed by USI Insurance, one of the largest independent insurance agencies in the word. His responsibilities with USI include employee education and mentoring. Mark and his wife Nancy live in Port Clinton Ohio.

4 In the Year Emerging Exposures Clients are Facing Today Emerging Issues Impacting Our Clients H O W D O E S I N S U R AN C E R E S P O N D TO T H E S H AR I N G C U LT U R E 1

5 Introduction Change is constant Difficult to keep up with changes that impact our clients Goal today is to address four issues: Drones Sharing economy vehicles and residences Where you reside issue Smarthome Drones Passing Fancy What is a drone? FAA an unmanned aircraft An emerging market rather than a passing fancy FAA estimates 30,000 commercial and civil drones by 2020 FAA in the process of registering personal drones & has granted over 2,000 exemptions for commercial use Once guidelines finalized expect increasing commercial applications for use of drones 2

6 Top Exposures Mid Air Collisions (With Commercial and Private Aircraft) &Damage from Foreign Objects (Birds) Loss of Control Malicious Acts Spoofing or Cyber Attacks Privacy, trespass and nuisance Lack of regulation Pilot and or Operator Skills Rapid Growth Drone for Service Vendors Significant Liability Exposure and Property Hard to Insure Property and Casualty 360 Personal Lines Is there coverage for drones in a homeowners policy? Section I Property Coverage If the property is covered, property used primarily for business while away from the residence premises is limited to $1,500 Property Not Covered We do not cover: Aircraft, meaning any contrivance used or designed for flight. We do cover model or hobby aircraft not used or designed to carry people or cargo. Property and Casualty 360 3

7 Personal Lines Is there coverage for drones in a homeowners policy? Section I Property Coverage Coverage C Personal Property Coverage is subject to named perils Covers direct physical loss to property described in Coverage C caused by aircraft (including self propelled missiles and spacecraft) The perils would be inadequate for damage to the drone The most common cause of loss would be crashing, which is not a named peril Personal Lines Is there coverage for drones in a homeowners policy? Section II Liability Coverage Coverage E Personal Liability There is no coverage for aircraft liability - arising out of ownership, maintenance, occupancy, operation, use, loading or unloading, negligent entrustment, failure to supervise or negligent supervision or vicarious liability for actions of a child or minor Aircraft means any contrivance used or designed for flight except model or hobby aircraft not used or designed to carry people or cargo. There is probably coverage for bodily injury or property damage caused by a drone until the policy is changed by ISO or the insurer Note: some company specific forms do not have the exception for model or hobby aircraft 4

8 Personal Lines Is there coverage for drones in a homeowners policy? Section II Liability Coverage Coverage E Personal Liability does not cover personal injury Many drones are equipped with cameras Drones that invade the privacy of others would result in a Personal Injury claim Some uses of cameras on drones could be criminal in nature no coverage for criminal acts Personal Lines HO Personal Injury endorsement Provides coverage for named offenses including personal injury arising out of: The wrongful entry into, or invasion of the right of private occupancy of a premises that a person occupies, committed by or on behalf of its owner, landlord or lessor does this cover invasion of privacy caused by a drone? Oral or written publication, in any manner, of material that violates a person's right of privacy there may be coverage if an insured posts pictures on-line Also, no coverage for personal injury: Caused by the insured with knowledge that the act would violate the rights of another and inflict personal injury, Arising out of business exposures Arising out of criminal acts 5

9 Personal Lines What s the best solution for providing coverage for personal drones? Buy a separate specialty policy for drones which provides better property perils and better liability coverage Google specialty insurance coverage for personal drones Commercial Lines CP Building & Personal Property form Property not covered Personal property while airborne or waterborne airborne means property being transported in the air as well as well as property in flight (not defined in the policy) Vehicles or self-propelled machines (including aircraft or watercraft) that are: Licensed for road use; or Are operated principally away from the described premises 6

10 Commercial Lines CG Commercial General Liability Coverage form Coverage A - excludes BI or PD arising out of the ownership, maintenance, use or entrustment to others of any aircraft owned or operated by or rented or loaned to any insured includes negligent supervision, hiring, employment, training or monitoring of others by that insured There is coverage for vicarious liability for someone else arising out of non-owned aircraft There is coverage for the assumption of aircraft liability in an insured contract Commercial Lines CG Commercial General Liability Coverage form Coverage B Personal & Advertising Injury has no aircraft exclusion Definition of Personal & Advertising Injury includes: Wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a premises that a person occupies, committed by or on behalf of its owner, landlord or lessor Oral or written publication, in any manner, of material that violates a person s right of privacy Coverage B excludes some exposures that might be created by the use of drones Knowing violation of the rights of another Criminal acts Infringement of copyright, patent, trade mark or trade secret Insureds in the media and internet type businesses 7

11 Commercial Lines CG Exclusion Unmanned Aircraft Unmanned Aircraft means an aircraft that is not designed, manufactured or modified after manufacture to be controlled directly by a person from within or on the aircraft Excludes both Coverage A and Coverage B for liability arising out of unmanned aircraft Also removes coverage for vicarious liability and liability assumed in an insured contract Commercial Lines CG Exclusion Unmanned Aircraft Coverage A Only CG Exclusion Unmanned Aircraft Coverage B Only CG Limited Coverage for Designated Unmanned Aircraft Provides coverage for specific unmanned aircraft and specific operations or projects Applies to both Coverage A & B CG Limited Coverage for Designated Unmanned Aircraft (Coverage A Only) like CG but provides Coverage A only CG Limited Coverage for Designated Unmanned Aircraft (Coverage B Only) like CG but provides Coverage B only There are similar endorsements for the Commercial Umbrella 8

12 The Sharing Economy Issues include: Ride Sharing Car Sharing Home Sharing Ride Sharing Using a personal vehicle while driving for Uber, Lyft, Sidecar, etc. Personal Auto Policy excludes coverage for an insured while using a vehicle as a public or livery conveyance (exclusion appears in all coverage parts of the policy) The term public or livery conveyance" means a vehicle used indiscriminately in transporting people or property for a fee and not limited to certain persons and particular occasions or governed by special terms Based on this definition, would using a vehicle for Uber, etc. meet the definition? Is the vehicle used indiscriminately? 9

13 Ride Sharing The TNC company provides coverage for the driver Uber provides coverage from the time the driver receives a request for service and has a passenger in the car until the conclusion of the trip $1 million liability and $1 million UM/UIM Comp and collision coverage if the driver has an auto policy with that coverage ($1,000 deductible) Uber provides reduced coverage while the driver is trolling (app is on but driver has not received a request for service and a passenger is not in the car) $50/$100/$25 liability No UM/UIM coverage No comp and collision coverage Ride Sharing To strengthen the public or livery exclusion, ISO introduced a new exclusion in October 2015 PP Public or Livery Conveyance Exclusion Endorsement revises the exclusion Excludes all coverage when a vehicle is being used by an insured who is logged into a transportation network platform as a driver whether or not a passenger is occupying the vehicle Transportation Network Platform an on-line enabled application or digital network used to connect passengers with drivers using vehicles for the purpose of providing prearranged transportation services for compensation 10

14 Ride Sharing PP Transportation Network Driver Coverage (No Passenger) provides coverage while the TNC app is on but no passenger is in the vehicle PP Limited Transportation Network Driver Coverage (No Passenger) provides coverage while the TNC app is on but no ride request has been received provides no coverage beginning when the driver accepts the request and while a passenger is in the vehicle Ride Sharing Effective (Ohio) Provides for statewide regulation of TNC s and drivers Preempts any local ordinance, resolution or law adopted to license, register, tax or otherwise regulate TNC s Public airports may adopt reasonable standards, regulations, procedures and fees TNC s and drivers are not subject to regulation as a chauffeured limousine, taxi cab or vehicle for hire, or forhire motor carrier Vehicles do not have to be registered as a chauffeured limousine, taxi cab or vehicle for hire, commercial car, or for-hire motor carrier 11

15 Ride Sharing Effective TNC driver must have primary liability insurance while logged on to the app and while engaged in TNC services While the driver is logged on to the network and is available to receive requests but is not engaged in TNC services, the driver must carry liability limits of at least $50/$100/$25 While engaged in TNC services must carry at a liability limit of at least $1 million Coverage can either be provided by the TNC driver or the TNC If the driver does not have required liability coverage the TNC must provide the primary coverage and defense An insurer may exclude any and all coverage while a driver is logged on to a TNC network A lender may require a TNC driver to maintain comp and collision coverage when the driver is logged on but not providing TNC services and while the driver is providing TNC services if there is no coverage the lender may obtain coverage at the driver s expense Ride Sharing Indiana Law passed 07/01/2015 Allows Companies to exclude TNC exposure Similar to Ohio With Passenger must carry $1,000,000 Without 50/100/25 12

16 Car Sharing Car sharing is not as prevalent as ride sharing but ride sharing services exist there are two types of car sharing: Car sharing vehicles are owned by car-sharing companies (e.g. Car2Go, Enterprise Car Share, Hertz 24/7 or Zipcar) PAP would handle like a rental car Peer-to-peer car sharing - vehicle owners rent out their own cars through car-sharing apps PAP may or may not provide coverage, may provide limited coverage These services claim to provide insurance that protects the owner and vehicle for accidents during the rental period, but may cause problems with owners personal policy (e.g. other insurance problems, etc.) Car Sharing PP Personal Vehicle Sharing Program Exclusion endorsement Vehicle enrolled in a car sharing program under a written agreement which being used in such a program Applies when a vehicle is used by another other than the named insured or family member Some company-specific PAPs exclude coverage while a vehicle is rented to others 13

17 Home Sharing How extensive is it? Airbnb s website says it operates in 34,000 cities located in 190 countries They ve had over 60,000 guests since their founding in 2008 Tripping.com lists more than 15 sites that offer home sharing in some form How does it work? Home owners list their homes for rent on a home sharing website Prospective renters enter a location and dates of the stay and the website shows available homes homeowner accepts or rejects the offer For example, tripping.com shows 572 homes for rent in Columbus (902 in Indianapolis) Home Sharing Host s HO-3 Personal Property Coverage We cover personal property owned or used by an insured while it is anywhere in the world. After a loss and at your request, we will cover personal property owned by: a. Others while the property is on the part of the residence premises occupied by an insured ; or b. A guest or a residence employee, while the property is in any residence occupied by an insured. 14

18 Home Sharing Host s HO-3 Personal Property NOT Covered We do not cover: f. Property of roomers, boarders and other tenants, except property of roomers and boarders related to an insured ; g. Property in an apartment regularly rented or held for rental to others by an insured, except as provided in E.10. Landlord s Furnishings under Section I Property Coverages; Home Sharing Host s HO-3 Landlord s Furnishings We will pay up to $2,500 for your appliances, carpeting and other household furnishings, in each apartment on the residence premises regularly rented or held for rental to others by an insured, for loss caused by a Peril Insured Against in Coverage C, other than theft. This limit is the most we will pay in any one loss regardless of the number of appliances, carpeting or other household furnishings involved in the loss. HO Extended Theft Coverage for Residence Premises Occasionally Rented To Others 15

19 Home Sharing Host s HO-3 Liability Business Exclusion Rental Exceptions This Exclusion E.2. does not apply to: (1) The rental or holding for rental of an insured location ; (a) On an occasional basis if used only as a residence; (b) In part for use only as a residence, unless a singlefamily unit is intended for use by the occupying family to lodge more than two roomers or boarders; or (c) In part, as an office, school, studio or private garage; Home Sharing Renter s HO-3 Liability Exclusion for Rented Premises F. Coverage E Personal Liability Coverage E does not apply to: 3. Property damage to property rented to, occupied or used by or in the care of an insured. This exclusion does not apply to property damage caused by fire, smoke or explos 16

20 Home Sharing Renter s HO-3 Liability Additional Coverage C. Damage To Property Of Others 1. We will pay, at replacement cost, up to $1,000 per occurrence for property damage to property of others caused by an insured. 2. We will not pay for property damage : a. To the extent of any amount recoverable under Section I... Section I covers damage to personal property owned or used by an insured IF caused by a covered peril. Where You Reside ISO HO-3 Coverage A - Dwelling 1976 Insuring Agreement This policy covers the described dwelling building, including additions in contact therewith, occupied primarily as a private residence. 1984, 1991, 2000, 2011 Insuring Agreement We cover The dwelling on the residence premises shown in the Declarations. Definitions Residence premises means The one family dwelling where you reside. 17

21 Where You Reside Potential Risks Nursing Homes Trusts Relocations Unoccupancy Foreclosures Vacancy Rentals Military deployment Child occupies parents home Seller moves out before closing Parents occupy child s home Buyer moves in before closing Divorce Home owned by an LLC Illness of insured Renovation Death of Insured Other? Where You Reside Case Law NO COVERAGE Bryan v. United States Fire Ins. Co. (Texas, 1970) Fisher v. Indiana Lumbermens Mutual Ins. Co. (Texas, 1972) Doyle v. Members Mutual Ins. Co. (Texas, 1984) Epps v. Nicholson (Georgia, 1988) Shepard v. Keystone (Maryland 1990) Nancarrow v. Aetna Casualty & Surety Co. (Arkansas, 1991) Georgia Farm Bureau Mutual Ins. co. v. Kephart (Georgia, 1993) Heniser v. Frankenmuth Mutual Ins. Co. (Michigan, 1995) Ivanov v. Phenix Mutual Ins. Co. (Maine, 2007, remanded 2008) Schuchman v. State Auto Prop. & Cas. Ins. Co. (Illinois, 2012) Null v. Auto-Owners ins. Co. (Michigan, 2013) COVERAGE O'Neil v. Buffalo Fire Ins. Co. (New York, 1849) Joyce v. Maine Ins. Co. (Maine, 1858) German Ins. Co. v. Russell (Kansas, 1902) Reid v. Hardware Mutual Ins. Co. (South Carolina, 1969) Insurance Co. of North America v. Howard (Oregon, 1982) Farmers Ins. Co. v. Trutanick (Oregon, 1993) FBS Mortgage Corporation v. State Farm (Illinois, 1993) Hill v. Nationwide Mutual Fire Ins. Co. (Georgia, 1994) Lunquist v. Allstate Ins. Co. (Illinois, 2000) Dean v. Tower (New York, 2014) 18

22 Where You Reside Claims e.g. Total loss while insured was in a nursing home (KY) $100,000+ condo rental claim (FL) 5-figure loss while home was being remodeled (AZ) $186,000 renovation claim (GA) $150,000 ten-month house rental (FL) $135,000 four-year house rental (FL) $123,000 two-year house rental (FL) $300,000 nonclaim with daughter occupancy (NY) $229,000 total loss with niece occupancy (MN) Small fire loss (NC) Fire loss with daughter s temporary occupancy (PA) Fire loss while house was undergoing renovation (RI) Where You Reside Solutions Forms Filing HO-2015-ORPFR HO Residence Premises Definition Endorsement requires residency at the inception of the policy coverage ends at renewal unless the endorsement is on the renewal policy HO Broadened Residence Premises Definition Endorsement suspends the residency requirement between the dates listed on the endorsement - examples of when to use Insured doesn t move in immediately after the closing Insured plans to renovate before moving in HO Residence Premises Definition Endorsement Unit Owners HO Broadened Premises Definition Endorsement Unit Owners MH Residence Premises Definition Endorsement Mobilehome MH Broadened Residence Premises Definition Endorsement Mobilehome 19

23 Other Sharing Peer-to-peer boating Boatbound.com, Boatsetter.com, Cruzin.com (GetMyBoat rental insurance) Dock rental Plane sharing (Flytenow, Airpooler, etc.) NextDoor.com Kid with a pickup truck Camping spaces in Sweden Fields in Australia Washing machines in France Fractional employment Smart Homes IoT and it s affect on Homes and Homeowners Insurance Gaps in Standard Home Coverage Equipment Breakdown Cyber Coverage Companies are moving quickly Offering significant discounts Even subsidizing the cost to install smart features 20

24 IoT Internet of Things Moving towards Usage Based Insurance Telmatics Not just for Flo s clients Measurement for Health/Life/Disability Short term usage coverage for renters/car usage SmartHome usage and monitoring Who is the Smarthome Client 21

25 Who is the Smarthome Client Who is the Smarthome Client 22

26 Who is the Smarthome Client Who is the Smarthome Client 23

27 Who is the Smarthome Client Who is the Smarthome Client 24

28 Who is the Smarthome Client Who is the Smarthome Client 25

29 Who is the Smarthome Client Who is the Smarthome Client 26

30 Who is the Smarthome Client Who is the Smarthome Client 27

31 Who is the Smarthome Client IoT 28

32 IoT IoT 29

33 IoT IoT 30

34 IoT IoT 31

35 IoT IoT 32

36 IoT IoT 33

37 IoT Security Risk Managing the SmartHome How do they get in Cryptoware looking for mass vulnerabilities Home WiFi Systems Smart TV s Data Camera Open a link in 34

38 10 Things to Protect the SmartHome Don t forget those updates Separate Social Media from financial information Security Matters On SmartHome devices (Take Control of Thermostat and hold home ransom) Change all default passwords Set up dual authentication dual authentication Passwords with numbers, letters, symbols not dogs name Secure your Smartphone 10 Things to Protect the SmartHome App downloads and purchases Buy from reputable sites Read the agreements especially privacy information Turn of Bluetooth except when using it Baby monitors Smart Speakers Purchase new devices don t buy reconditioned or open boxes Wipe your information reset back to factory specs What does the Home Policy cover 35

39 Thank you 36