BUSINESS ELITE TABLE OF CONTENTS

Transcription

1 United Insurance Company BUSINESS ELITE TABLE OF CONTENTS Utah Page # I General rules A Introduction 2 B Eligible occupancies 2 C Additional premium /return premium changes 1 Calculation of premium 2 2 Waiver of premium 2 3 Deletion of mandatory coverage's 2 D Building construction definitions 2 1 Construction class(s) Fire division definition 3 E Building and BPP ownership 4 F Deductibles 4 G Individual Risk Premium Modifications 5 (IRPM) 1 Eligibility 5 2 Ineligible Risks 5 3 Rating Procedures 5 4 Risk characteristics 5-6 H Liability Exposures 7 I Mandatory Coverage's 7 J New Rates 7 K Underwriting Compliance Review 7 L Policy Cancellation 7 M Policy Term 7 N Policy Writing Minimum Premium 8 O Premium Collections 8 1 General information 8 2 Deferred Payment Plan 8 3 Cancellation Invoice Fee 8 4 Non-Sufficient Funds Fee 8 P Premium Development for Mandatory 9 Coverage's 1. Risk Classification 9 2. Rating Territory 9 3. Building Construction 9 4. Fire Protection 9 5. Sprinkler Protection 9 6. Lessors Risk Building 9 7. Additional Liability Charge 9 Q Protective Devices or Services 9 R Reduced Acquisition Costs 9 Page # B. Liability and Medical Expenses Coverage 1. Tenants Fire Liability Garagekeepers 11 III Auto Service Program 12 A Introduction 12 B Eligibility & Guidelines C Ineligible Risks 14 D Submit Accounts 14 E Application 14 F Classification Rules 14 IV Contractor Program 15 A Introduction 15 B Eligibility 15 C Ineligible Risks D Application 16 E Classification Rules 16 V Elite Business Program 17 A Introduction 17 B Eligibility 17 C Ineligible Risks - Mercantile-Service D Preferred Mercantile-Service Eligibility 18 E Ineligible Risks Preferred 18 F Application 18 G Classification Rules 18 VII Policy Forms 19 VIII Appendices 19 Appendix A Business elite classes & underwriting notes Appendix B Premium development II Optional Coverage 10 A. Property Coverage's Accounts Receivable Actual Cash Value Buildings Option Automatic Increase (Inflation Guard) Business Income Ordinary Payroll Coverage Extended Business Income Employee Dishonesty Outdoor Signs Valuable Papers and Records Newly acquired property 11 United Insurance Company BP underwriting guide

2 United Insurance Company INTRODUCTION BUSINESSOWNERS ELITE I. GENERAL RULES Utah This manual contains the rules, classifications, rating information for writing of commercial coverage for small to medium sized firms meeting the requirements of the following programs specified below and further defined in the individual program rules. The AUTO SERVICE, Contractor, Mercantile-Service and Office products are written utilizing ISO Businessowners forms and structure. The Auto Service segment is written utilizing ISO Businessowner forms and structure with amendatory endorsements and rate. Eligible Occupancies The following are eligible occupancy groups for the United Insurance Company Business Elite Program subject to the criteria listed below. Specific classes within these groups are further defined and listed in the Classification Section of this Manual. Unless otherwise noted, for all segments eligible risks may not exceed 25,000 square feet in total floor area or exceed $3,000,000 in annual gross sales at each location. No more than 25% of annual gross sales may be derived from off-premises operations. Storage buildings (including business personal property) occupied by the insured, incidental to an eligible risk and not exceeding 25,000 square feet, may also be included. For Contractor classes the maximum payroll is $ 300,000. Further details of eligibility are included in the individual sections of this guide. ADDITIONAL PREMIUM /RETURN PREMIUM CHANGES 1. Calculation of Premium a. Pro-rate all changes requiring additional premium. b. Apply the rates and rules in effect on the effective date of the policy; or, if the change is made after an anniversary date of the policy, apply the rates and rules in effect on that anniversary date. 2. Waiver of Premium All additional and return premiums will be waived. 3. Deletion of Mandatory Coverage Deletion of a mandatory coverage is not permitted unless the entire policy is cancelled. BUILDING CONSTRUCTION DEFINITIONS Classify buildings according to the following construction types: 1. Frame. (Construction Code 1) Buildings with exterior walls of wood or other combustible materials including construction where combustible materials are combined with other materials (such as wood, ironclad or stucco on wood). 2. Masonry Veneer. (Construction Code 10) Buildings where the exterior walls are constructed of brick veneer or stone veneer materials. United Insurance Company BP underwriting guide

3 3. Joisted Masonry. (Construction Code 2) Buildings where the exterior walls are constructed of masonry materials such as adobe, brick concrete, gypsum block, hollow concrete block, stone, tile, or similar materials and where the floors and roof are combustible (disregarding floors resting directly on the ground). 4. Noncombustible. (Construction Code 3) Buildings where the exterior walls, floors and roof are constructed of, and supported by metal, asbestos, gypsum or other noncombustible materials. 5. Masonry Noncombustible. (Construction Code 4) Buildings where the exterior walls are constructed of masonry materials described in 3 above, with the floors and roof of metal or other noncombustible materials. 6. Modified Fire Resistive or Fire Resistive. (Construction Code 6) Buildings where the exterior walls, floors and roof are constructed of masonry or other fire resistive materials. 7. Mixed Construction. When a building is of mixed construction, determine the applicable construction type as follows: a. If 2/3 or more of the total wall area is of masonry or fire resistive materials, the Construction Type is: 1. Fire Resistive or Modified Fire Resistive, when 2/3 or more of the total floor and roof area is of masonry or fire resistive materials. 2. Masonry Noncombustible, when 2/3 or more of the total floor and roof area is of noncombustible materials. 3. Joisted Masonry, when more than 1/3 of the total floor and roof area is of combustible materials. b. If 2/3 or more of the total wall area and 2/3 or more of the floor and roof area is of noncombustible materials, the applicable Construction Type is Noncombustible. c. If 2/3 or more of the total wall area is joisted masonry material, the applicable Construction type is Joisted Masonry. d. If 2/3 or more of the total wall area is masonry veneer materials, the applicable Construction Type is Masonry Veneer. e. If more than 1/3 of the total wall area is of combustible materials, the applicable Construction Type is Frame. f. If none of the above describes the building, apply to your Underwriter for construction type. Be prepared to provide full construction details. 8. Fire Division Definition One continuous masonry party wall meeting the following requirements shall be considered a fire wall for determining the number of units within a fire division. a. The fire wall shall be constructed of brick or reinforced concrete not less than 6 inches in thickness; OR reinforced concrete building units (or filled blocks) with a fire resistance rating of not United Insurance Company BP underwriting guide

4 less than two hours and not less than 6 inches in thickness; OR other masonry materials not less than 8 inches in thickness. b. The fire wall shall rise to the underside of AND be in direct contact with a fire resistive, masonry or noncombustible roof; OR pierce slow burning or combustible roof. In addition, no combustible material shall extend across any parapet which pierces a slow burning or combustible roof. c. The fire wall shall extend to the interior surface of AND be in direct contact with a fire resistive, masonry, or noncombustible wall OR pierce a slow burning or combustible wall. In addition, combustible cornices, canopies or other combustible material shall not extend across the wall. d. All load bearing structural metal members in the party wall shall be protected metal (not less than one hour). e. All access communications through the fire wall shall be protected by at least a single automatic or self-closing labeled Class A fire door. Where one or both of the communicating buildings are graded as sprinklered, acceptable sprinklers installed over the communications are acceptable in lieu of the Class A door. All communications caused by air conditioning and/or heating ducts piercing a fire wall shall be protected by (at least) a single, labeled 1½ hour damper. Note 1: Where unprotected metal, noncombustible wall, floor or roof supports are continuous through a masonry wall, such a wall shall not be acceptable for separate rating. Note 2: The usual openings provided for common utilities should be ignored when their size is limited to that necessary to provide for normal clearance and vibration. Buildings with walls not meeting the above requirements shall be rated as a single fire division BUILDING AND BUSINESS PERSONAL PROPERTY OWNERSHIP When all property is owned by the same entity, building and business personal property must be included in the same policy. DEDUCTIBLES Business Elite Programs. The Business Elite Property Coverage Forms contemplate a base $500 "Covered Causes of Loss" deductible per occurrence indicated in the Declarations. The mandatory deductible for Burglary & robbery (named perils form only) Employee Dishonesty, Outdoor Signs, Exterior Grade Glass, Interior Glass, and Money and Securities coverage is $250 per occurrence. The deductible does not apply to Business Income and Extra Expense and the Fire Department Service Charge. 2. Optional Deductibles The following deductible amounts of $250, $1,000 and $2,500 per occurrence are also available. The deductible chosen shall be indicated in the Declarations. Refer to the deductible factors in the state rate pages. United Insurance Company BP underwriting guide

5 INDIVIDUAL RISK PREMIUM MODIFICATION PLAN (IRPM) 1. Eligibility Applicants will be viewed in light of their overall operation; the following modifications may be applied to recognize such special characteristics of the risk that are not fully reflected in the basic premium or rates. To be eligible for these modifications the risk must generate a minimum of $ 750 in premium prior to the application of any schedule credits or debits. Documentation of credits/debits given must be included in the underwriting file. The total credits or debits under the following table may not exceed 25%. 2. Ineligible Risks a. This credit plan will not be applied to: 1. Earthquake insurance; 2. Hired Auto and Non-Owned Auto Liability insurance; 3. Condominium Directors and Officers Liability Insurance; 3. Rating Procedures The following credits may be applied if the conditions following the table are met. Agents can apply a maximum of 10% credit or debit without company approval. All adjustments are subject to review and approval of the company. IRPM TABLE RANGE OF MODIFICATIONS CREDITS DEBITS a. Management 10% to 15% b. Location 6% to 10% c. Building Features 5% to 5% d. Premises & Equipment 5% to 5% e. Employees 5% to 5% 4. Risk Characteristics Defined a. Management - 10% credit to 15% debit To be eligible for any credit must have a minimum of 3 years verifiable insurance history and management that creates a pro-safety environment and is responsive to reasonable requests or recommendations from the insurance company. Failure to do so will result in a debit even if the years in business exceed the requirements shown below. The following scale shall apply depending on the years the business has been in operation under the current name and management. Any risk without at least 2 years verifiable insurance experience will be debited an additional 5% in addition to the year in business debit. United Insurance Company BP underwriting guide

6 Years in Business 10% credit to 10% Debit 10% debit 5% 0% 3-5% % credit < Years in Business b. Location 6% credit to 10% debit The insured premise is located in an un-congested, "good" neighborhood. Exposures from surrounding premises present no unusual hazards. Streets and thoroughfares surrounding the risk are adequate for the traffic involved and are not unduly congested by local parking habits. Off-street parking facilities are available for personnel and are well maintained. There are no unusual natural or man-made impediments restricting traffic should emergency situations arise. c. Building Features (Unusual Structural Features) 5% credit to 5% debit Unusual structural features have been provided which contribute to the overall safety and reduction in hazard to the premises. Superior workmanship and materials have been used and facilities have been designed to minimize hazards whenever possible. To receive an adjustment the details of why the building is superior/inferior must be included in the file. d. Premises and Equipment 5% credit to 5% debit Buildings, features, machinery and equipment are well maintained. Protective devices of the proper type are effectively located and clearly identified. The premises are properly designed for the occupant or the allowed converted facilities have been properly modified. Illumination is adequate and properly installed in hallways, stairwells, as well as operating areas. Additional arrangements for emergency illumination have been provided. The ventilation system is adequate and is properly maintained. Credit can not be given without agent verification of these features. If the features are normal to the class, no credit can be given. e. Employees 5% debit to 5% credit Employees are not picked at random but are selected on the basis of aptitude and ability for the position involved. An adequate training program is provided for new employees, supervision by responsible personnel is adequate and proper controls have been established. To receive credit for this class employee turnover must be considered. The table below shall be used to determine appropriate adjustment in addition to details of the hiring and training rules and actual implementation them. Debits Average Credits 4%--5% 1%---3% 0% 1%---3% 4%---5% <0-30% retained longer than 12 months 30% - 59% retained longer than 12 months 60% retained longer than 12 months 61% - 80% retained longer than 12 months 81% - 100% retained longer than 12 months United Insurance Company BP underwriting guide

7 LIABILITY EXPOSURES The premiums developed contemplate liability and medical expense coverage for the premises designated in the Declarations at the time the policy was issued. Liability exposures not contemplated under the Businessowners or auto rate structure will be excluded by attaching form BP (UT) Comprehensive Business Liability Exclusion or BP (UT) Limitation of Coverage to Designated Premises or Project to the policy for Businessowners forms. Auto Service risk liability exposures will be limited by use of the appropriate General Liability endorsement. Liability exposures not contemplated under the Businessowners rate structure may not be written in this program. MANDATORY COVERAGES The Businessowners policy must be written to provide coverage for: 1. Buildings and/or business personal property 2. Business liability insurance 3. Contractors coverage may be written with liability coverage only, all other lines require property coverage. NEW RATES Because of materially changed conditions, an existing rate may not be equitable. If so, a new rate may be established and policies in force may be changed. The effective date of the new rate is the date the company receives notification of the changed conditions. A policy endorsed to take advantage of a reduced rate shall be further endorsed to reflect all current rules, rates and forms. UNDERWRITING COMPLIANCE REVIEW New applications and/or additional or changed locations may be visited to insure locations and operations meet the underwriting standards of the Company. Appropriate underwriting actions and/or requests may be undertaken as a result of this review. Agents are expected to assist in the completion this important underwriting process. POLICY CANCELLATION 1. If a policy is canceled, the return premium will be computed pro rata on all cancellations except insured requests, which will be short rate. Return premium less than $15.00 will not be returned unless the insured specifically requests a return premium. 2. A flat cancellation credit shall be allowed on a renewal policy that is returned to the company or canceled within 45 days of its inception. Policies not paid or returned will be canceled for non payment of premium. All earned premiums will be pursued by the company. POLICY TERM The policies shall be written for one year. Renewal premiums will be computed for each year according to the current rules and rates. United Insurance Company BP underwriting guide

8 POLICYWRITING MINIMUM PREMIUM For all policies the following policy writing minimum premiums apply; Annual Policy Minimum Premiums Limits of Liability 100,000/300, ,000/600, ,000/1,000,000 1,000,000/2,000,000 Auto Service $ 325 $ 350 $ 375 $ 425 Contractors $ 325 $ 350 $ 375 $ 425 Business Elite $ 275 $ 325 $ 350 $ 375 Business Elite - in home $ 250 $ 265 $ 290 $ 325 PREMIUM COLLECTIONS A. General Information The above minimums shall be prorated if written or less than one year At the option of the agent, the insured may be billed for policy premiums by the agency or directly by the Company. If the Company billing option is chosen, the agent will collect the new business initial premium payment with all subsequent billings coming from the Company. The agent can choose to have the entire renewal premium billed by the Company. B. Deferred Payment Plan The premium for policies that are billed by the Company will be paid in installments at the option of the insured. The company plan will require a minimum of 2 months premium down with monthly payments for the remainder of the policy term or until the estimated annual premium is paid in full. Endorsements to a policy, which affect the policy premium, will be included in the next installment. Any additional (or return) premium will be divided equally between the remaining installments. If the premium has been paid in full, any additional premium will be due as billed or if a refund, the refund will be paid within 30 days. A nominal service charge will be added to each installment, unless the entire term premium is paid by the renewal date. C. Cancellation Invoice Fee In accordance with the terms of the policy and any state laws governing policy cancellations, cancellation of the policy insured request will be cancelled short rate and will result in an additional service charge of $ 25 to the account. D. Non-Sufficient Funds Fee In the event that payment is made, for which there are non-sufficient funds in the checking or savings account, we will make a charge to offset the processing costs associated with funds payment. United Insurance Company BP underwriting guide

9 PREMIUM DEVELOPMENT FOR MANDATORY COVERAGES Businessowners forms All rates and premiums in this manual are for an annual period and will developed using ISO premium rules. Compute premium for mandatory coverages by using the limit of insurance separately applying to building, business personal property and liability rates. The limit of insurance must be the replacement cost value or actual cash value of the building and/or the business personal property. Limit used for liability is dependent on ISO Businessowners rules. All Contractor classes will be rated on payroll for Liability exposures and are subject to premium audit. 1. Risk Classification. Use the classification listing matching the insured s operations. If no classification is found decline or obtain guidance from United Underwriters commercial line department. 2. Rating Territory. The state of Utah is all rated as Territory Building Construction. Classify according to construction type. Refer to Construction definitions in this manual. 4. Fire Protection. Refer to ISO Public Fire Protection Class Manual to determine. Risks misclassified will be corrected retroactively to the inception of the policy or endorsement. 5. Sprinkler Protection. Apply the sprinklered building rate factor from the state rate page when the building is protected by an automatic sprinkler system which has been recognized in the Division Five - Fire and Allied Lines Basic Group I Rate. 6. Lessors Risk Building. Use lessor s rates to develop building property premium if the insured occupies 75% or less of the total area of the premises. If the insured occupies more than 75% of the total area of the premises, use the occupant rates. 7. Additional Liability Charge (see state rate pages to determine charges) Apply additional liability premiums when applicable for: Swimming pool, beaches, boat slips. Additional Insured for Managers or Lessors. Professional Liability exposures for included classes PROTECTIVE DEVICES OR SERVICES Protective devices or services may be required. The policy must be endorsed to require that the company be notified if the devices or services are discontinued or out of service. REDUCED ACQUISITION COSTS The rates/premiums for Businessowners policies contemplate the standard allowance for expenses. If the expenses are less than standard the rates/premiums shall be reduced by a percentage equal to the reduction of expenses. This reduction shall be in addition to any other premium modification contemplated in other rules. United Insurance Company BP underwriting guide

10 United Insurance Company BUSINESSOWNERS ELITE II. OPTIONAL COVERAGE'S Utah The following optional coverages are included in Businessowners Coverage Form BP (except as noted) and are activated by entry on the Declarations page: A. Property Coverages 1. Accounts Receivable a. Description of Coverage: The $10,000 (on-premises) limit of insurance for Accounts Receivable Coverage in the Property Coverage Extensions Section of the Businessowners Coverage Form may be increased. An off-premises limit of $5,000 is also included within this Coverage Extension, however higher limits options do not apply to off- premises coverage. b. Premium Determination See State rate pages 2. Actual Cash Value Buildings Option a. Description of Coverage: Building Coverage may also be written on an Actual Cash Value basis, if this option is shown in the Declarations. b. Rating Procedure See state rate pages. 3. Automatic Increase in Insurance (Inflation Guard) a. Description of Coverage: The limit of insurance under the Businessowners Policy applicable to the building is automatically increased during the policy period by an annual percentage shown in the Declarations. This percentage is 6% unless a higher or lower percentage is shown in the Declarations. There is no option to eliminate this coverage feature. b. Rating Procedure: When a higher or lower percentage is shown, multiply the Building premium by the appropriate factor shown in state rate pages. 4. Business Income Ordinary Payroll Coverage a. Description of Coverage: Optional coverage is available under Business Income to extend the 60- day coverage period for ordinary payroll expenses. The additional coverage may be obtained in increments as indicated in the following Table by activating this Optional Coverage on the Declarations. b. Premium Determination: Multiply the Building and Business Personal Property premium by the applicable factor shown in Table Business Income Ordinary Payroll Factors, depending on the number of days that the coverage is extended. The applicable factor should be applied to both the Building and Business Personal Property premiums when both coverages are provided for a given risk. See the state rate pages for factors. 5. Extended Business Income a. Description of Coverage: The Extended Business Income Additional Coverage may be extended to provide additional business income beyond the 30-day coverage period by activating this Optional Coverage on the Declarations. b. Premium Determination: Multiply the Building and Business Personal Property premium by the applicable factor shown in Table Extended Period of Indemnity Factors. The applicable factor should be applied to both the Building and Business Personal Property premiums when both coverages are provided for a given risk. See the state rate pages for factors. 6. Employee Dishonesty a. Description of Coverage: Coverage is available for dishonest or fraudulent acts of the insured's employees, at optional limits of $5,000, $10,000, $25,000, per occurrence. b. Premium Determination See state rate pages. 7. Money and Securities (Coverage Code 16) a. Description of Coverage: Coverage for Money and Securities is available. The limits of insurance apply to on-premises and off-premises exposures. b. Premium Determination See state rate pages. United Insurance Company BP underwriting guide

11 8. Outdoor Signs a. Description of Coverage: Coverage is available for outdoor signs which are the property of the insured or the property of others in the care, custody and control of the insured. b. Premium Determination See state rate pages. 9. Valuable Papers and Records a. Description of Coverage: The $10,000 (on-premises) limit of insurance for Valuable Papers and Records/Electronic Media and Records Coverage of the Coverage Extensions Section of the Businessowners Coverage Form may be increased. An off-premises limit of $5,000 is also included within this Coverage Extension, however higher limits options do not apply to off-premises coverage b. Premium Determination See state rate pages. 10. Newly acquired property a. Description of coverage: The policy may be extended to cover defined newly acquired property for up to 30 days. Additional premium for this property will be charged beginning the date of acquisition. The policy form will include $ 50,000 for new buildings and $ 25,000 for new business personal property. Higher limits are subject to United Underwriters discretion and approval. No additional premium shall be charged for increased limits. B. Liability and Medical Expenses Coverage 1. Business Liability Coverage Tenants Fire Liability a. Description of Coverage: Coverage is automatically provided in the Liability Section of the Businessowners Coverage Form for Tenants Fire Liability insurance subject to a basic limit of $50,000. b. Optional Higher Limits of Insurance: The $50,000 limit may be increased to an amount not to exceed $500,000. c. Premium Determination See state rate pages. 2. Garage keepers liability is available in for Auto service risks a. Description of Coverage: Garage keepers covers customers autos while in the care of an auto repair shop. Legal liability and direct liability are available up to a $ 300,000 limit per location. (subject to policy maximum limits) b. Premium Determination See state rate pages United Insurance Company BP underwriting guide

12 United Insurance Company III. ELITE BUSINESSOWNERS AUTO SERVICE PROGRAM Utah A INTRODUCTION The AUTO SERVICE Program targets small to medium auto service or repair businesses presenting low or medium premises & operations hazards and low products exposure. The businesses written are those described in the Classification Table at the end of this manual and meet the quality standards outlined below. Owner occupants or tenants in leased property are to be written in this program. Building owners who lease premises to auto service risks may be eligible under another Elite program. The insured must have a minimum of 3 years verifiable experience in his field. Hiring practices should include reasonable verification of experience and proficiency of employees. Loss experience must be provided on all accounts. Those with more than one loss or any loss over $ 1,000 in the last 3 years must be approved by United Underwriters prior to binding. The rates are included in United Underwriters Insur-Pas underwriting and issuance system. B AUTO SERVICE ELIGIBILITY & GUIDELINES QUALITY STANDARDS Risks should be reviewed in light of the following standards, if the risk falls short it should not be quoted or issued. Management 1. An active owner should have at least 3 years verifiable management experience in auto service operations. A non-owner manager must have at least 3 years experience in managing a like auto service business. 2. Management should have a written accident/incident procedure and a fire safety plan indicating what needs to be done in an emergency. 3. The business should be in operation for at least one year unless otherwise approved by United Underwriters. 4. Hiring practices should include reasonable verification of experience and proficiency of employees. 5. Three year verifiable loss experience from any previous insurance carrier is required. Currently dated loss runs will be required within 30 days. 6. Prior Losses problem; management must show appropriate corrective action. Please document action taken to prevent or improve adverse loss ratios on the application or a separate attachment. application Property The property must be in a location that is conducive to the Auto service operations. Ample off street parking should be provided with ease of entry to and from the premises. Crime in the area will be considered as a factor. 1. The physical condition and appearance of the property must be good. 2. Buildings over 25 years old will have the roof replaced and the electrical, heating/cooling and plumbing evaluated to be sure it is up to code and in safe condition. 3. Premises must be well maintained meaning paint in good condition, no broken windows, carpets showing little signs of wear, landscaping neat and clean, and parking areas free of holes or obstructions. 4. Housekeeping must be acceptable; Waste materials should not be allowed to accumulate. Outside receptacles for waste should be located an adequate distance from buildings. United Insurance Company BP underwriting guide

13 5. Electrical systems are designed for their use and should not be overloaded. 6. The proper type and number of fire extinguishers should be available throughout the premises and should be inspected and recharged within the past 12 months and if applicable, standpipe and hoses inspected as well. 7. Building and Business Personal Property values should be properly evaluated by using items such as an appraisal for buildings or the client s inventory records for personal property. Values should be periodically reviewed and updated by the insured. 8. Smoking restrictions should be enforced according to state laws and local ordinances in customer and employee areas. In addition to any laws or ordinances, a smoking policy should address the risk s exposures to special hazards, e.g. any flammable chemicals, and be strictly enforced. 9. Theft coverage requires the premises to have a burglary alarm. Type of alarm can be UL certified local or UL certified central station. If there is no alarm theft should be excluded. Risk Specifics To be eligible for the Elite Auto Service Program, the risk should match the following criteria; 1. Service or repair shops working on private passenger autos, vans and light trucks. This includes gasoline stations, auto body repair shops and full service car washes. Only those classes included in the class list are eligible. 2. Combined building, business personal property, business income, extra expense and any additional property or crime coverage whether listed on the declaration or included in the policy form can not exceed $1,000,000 per Location (underwriting will determine property at risk if in excess of $ 1,000,000). 3. Maximum property values at any policy up to $3,000,000 (adjacent plots are considered one location; there must be a minimum of 75 feet of clear space between buildings). 4. Any building over 25 years old without roofing updates within the last 15 years will have the roof covered on an ACV basis. Named perils coverage only can be written on buildings in this category. 5. The limits of insurance must be 100% or more of the replacement cost or actual cash value based on the coverage selected. Building values will be verified based on the replacement cost guide used by the company. Other building replacement cost guides may be used by the agency to determine building values if a copy of the building replacement cost guide is provided to and accepted by the company underwriter. 6. Applicants with prior loss problems must show appropriate corrective action. Please document corrective action taken on the application and/or a separate attachment to the application. 7. Quick lube operations must have a service checklist that is always used when servicing vehicles. A copy of this checklist must be maintained for a minimum of 3 years. United Insurance Company BP underwriting guide

14 C INELIGIBILE RISKS Auto Service risks with the following characteristics are ineligible: 1. Any risk with a loss over $2,500 or more than one claim in three years. These risks may be considered upon submission to the underwriter. 2. Any building over 25 years old without verifiable updates to roof, plumbing, electrical and heating. 3. Vacant buildings or those operated from a private residence. 4. Dealers of any kind. 5. Guard dogs or with employees or security services that are armed. 6. Buildings occupied in whole or in part for manufacturing or processing, unless such occupancies are eligible for the Processing/Service Program. 7. Sales of non-automotive products or services that exceeds 15% of total receipts. HOWEVER, these risks may be considered for our Retail Program. Contact your underwriter for assistance. 8. Work on high performance, emergency or police vehicles or heavy truck engines; or on any vehicle used in racing or competitive events. 9. Operations involving any type of rental equipment, car or trailer rental to include tool rental. 10. Towing activities beyond that incidental to the business, auto coverage is not available for tow trucks. 11. Auto Body Shops without UL approved paint booth meeting current NFPA standards. 12. Storage of Paints or other flammable liquids that are not in approved cabinets or containers. 13. Storage lots without fencing and adequate lighting. Customer s car keys must be safely secured inside the office. 14. Risks that offer LPG sales, impound lots, tire recapping, split rim work, 15. Where a majority of their income is derived from brake work. 16. Perform work on emergency vehicles (e.g. police, fire, forestry or ambulance). D SUBMIT ACCOUNTS 1. Accounts with a loss over $ 1000 in the last year or more than one loss in three years. 2. Any account that has been non renewed or cancelled for any reason in the last three years. 3. Risks with less than 3 years experience in the field. E F APPLICATION - An Auto Service Application is required to be fully completed and signed by the agent and insured. An acceptable Industry Application acceptable to the underwriter may be submitted for approval. CLASSIFICATION RULES (See Appendix 1 that follows this guide for all contractor classes.) When classifying the operations include all receipts generated for operations of the insured. If there is a question on how to classify a risk contact United Underwriters. United Insurance Company BP underwriting guide

15 United Insurance Company IV. ELITE BUSINESSOWNERS CONTRACTORS PROGRAM Utah A INTRODUCTION The Elite contractors program is designed to write Artisan type contractors who have no or very little subcontracted work and whose operations do not involve multi-habitational risks or large tract housing projects. The insured must have a minimum of 3 years verifiable experience in his field. Hiring practices should include reasonable verification of experience and proficiency of employees. Loss experience must be Provided on all accounts, those with more than one loss or any loss over $ 1,000 in the last 3 years must be approved by United Underwriters prior to binding. The rates are included in United Underwriters Insur-Pas underwriting and issuance system. B ELIGIBILITY CONTRACTORS 1. Classes listed in the class table are the only classes eligible for the program. 2. No more than $ 500,000 of annual payroll or $ 2,500,000 in annual sales; 3. No work at a height of over 3 stories; 4. The total cost of subcontracted work cannot exceed more than 15% of the contractor's total annual gross sales; 5. No renting or leasing equipment to others; and 6. Sales unrelated to installation, service or repair cannot exceed 25% of annual gross sales. 7. The applicant must have owned or operated the business with continuous insurance coverage for a minimum of 2 years or have a minimum of 3 years verifiable experience in the field. Risks with less than 2 years in business or without prior insurance must be submitted for approval. Currently dated hard copy loss runs are required within 30 days of binding. 8. For premium computation, use a maximum $25,000 annual payroll for individual insureds, copartners, executive officers and employees. Clerical payroll is excluded for premium computation purposes. 9. All subcontractors are required to have liability insurance limits equal to the insured. Any subcontractor work not meeting this requirement will be charged as payroll under the rates then in effect for uninsured contractors for that classification of work. 10. Contractors equipment limits up to the following; blanket equipment per item $ 1,000, total of all blanket equipment $ 10,000. Scheduled equipment $100,000 per item, total of all scheduled equipment $ 250,000. Non-owned tools and equipment rented or leased from others maximum limit is $ 75,000. The maximum for this coverage is $ 300, Combined building, business personal property, business income, extra expense and any additional property or crime coverage whether listed on the declaration or included in the policy form can not exceed $1,000,000 per Location C INELIGIBLITY The following types of contractors and/or activities are not eligible for United Insurance Company contractors program, regardless of whether or not they engage in eligible activities: 1. General Contractors, homebuilders, those involved in new construction of multi-habitational, condominium, townhouse or apartment developments (A General Contractor is a contractor who is responsible for managing an entire project on behalf of the client, rather than just a portion of the project. In addition, a General Contractor hires and coordinates the efforts of subcontractors). 2. Any contractor with excessive prior losses that are deemed unacceptable to the underwriter. United Insurance Company BP underwriting guide

16 3. Submit any risk with a loss in the last 3 years over $ 1, Contractors who use cranes in their operations. 5. Contractors who repair, install or service or previously repaired, installed or serviced boilers, burglar alarm systems, automatic fire extinguishing systems, elevators, escalators or computers. 6. Contractors with products manufactured or sold under the insured's name. 7. Contractors who engage in or previously engaged in: a. Demolition, blasting, wrecking, high pressure boiler work or liquid petroleum gas (LPG) work; b. Insulation work other than fiberglass only; c. Lawn chemical spraying operations, except with respect to the operations of a landscape gardener, (not pest control) provided that such landscape gardener operations meet all standards of any statute, ordinance, regulation or license requirement of any federal, state or local government that apply to such operations; and d. Hazardous material or pollution abatement operations, including but not limited to: i. Asbestos; Lead; and Radon mitigation and testing. 8. Contractors who engage in: a. Sales, service or installation of any kind of automatic opening doors or garage doors (residential or commercial). b. Heavy construction, including but not limited to: i. Bridge, caisson, cofferdam, dam, dike, dry dock, jetty, levee or pier construction; ii. Cable laying and cable installation; iii. Crane or derrick installation or rigging; iv. Dredging; v. Drilling; vi. Excavation; vii. Grading of land; viii. Iron or steel erection; ix. Pipeline construction; x. Sandblasting; xi. Scaffolding, hoists, tower erection; or xii. Tunneling; c. Installing, repairing, or servicing hot tubs; d. Ship repair or painting work; e. "Shop-only" carpentry or sheet metal work; f. Installing and repairing swimming pools; g. Tree service or removal contracting work; h. Waterproofing contracting operations; and i. Installing wood and coal stoves. 9. Any contractors not specifically provided for in the appendix B contractors classes as acceptable. 10. Contractors sub contracting more than 15% of their work D E APPLICATION A completed signed Contractors Application is required on every risk. CLASSIFICATION RULES (See Appendix 1 that follows this guide for all contractor classes.) When classifying the operations include the payroll for all operations the insured does in his business. If there is a question on how to classify a risk contact United Underwriters. United Insurance Company ELITE BUSINESSOWNERS V. BUSINESS ELITE PROGRAM Utah United Insurance Company BP underwriting guide

17 RATING for all United Insurance Company programs will be accomplished by accessing Insur PAS rating/issuance system. A INTRODUCTION The Mercantile/Service Businessowners programs are designed for retail mercantile and service operations with limited off-premises exposures. Those occupancies listed in the classification table are eligible for the Mercantile/Service program. Additionally, those classifications noted in bold in appendix C with are eligible for the Preferred Mercantile/Service program; please refer to the Preferred Mercantile/Service section of this manual for complete eligibility rules. Definitions: Mercantile is defined as an establishment in which the principal business is the retail buying and selling of merchandise. Service is defined as an establishment in which the principal occupancy is the providing of personal or commercial service. B ELIGIBILITY BUSINESS ELITE 1. Retail mercantile/service and selected in home business class occupancies up to 25,000 square feel per location are eligible. Storage buildings occupied by the insured, which are incidental to an eligible mercantile/service occupancy up to 25,000 square feet, may be included. Do not use basement areas closed to the public in computing floor areas. 2. Combined building, business personal property, business income, extra expense and any additional property or crime coverage whether listed on the declaration or included in the policy form can not exceed $1,000,000 per Location 3. Individual condominium units that are used for eligible mercantile/service occupancies are eligible. (Building coverages are not eligible except for Improvements and Betterments.) 4. Wholesale operations are not eligible unless incidental to the overall retail operation. 5. Eligible service/processing operations may have no more than 25% of gross sales from off-premises operations. 6. Beverage Stores and Convenience Stores requesting Money and Securities coverage must have drop safes or similar devices. 7. The Limits of Insurance must be at least 80% or more of the replacement cost or actual cash value based on the coverage selected. Building values will be verified based on the replacement cost guide used by the company. Other building replacement cost guides may be used by the agency to determine building values if a copy of the building replacement cost guide is provided to the underwriter. 8. Applicants with prior adverse loss histories must show appropriate corrective action. Please document corrective action taken on the application and/or a separate attachment to the application. 9. Please see below for preferred properties additional eligibility rules. C INELIGIBILE RISKS 1. Any risk with a loss over $ 1,000 or more than one claim in three years. These risks will be considered upon submission to the underwriter. 2. All risks over 25 years old without roofing updates within the last 15 years will have the roof covered on an ACV basis. The roof must meet acceptable underwriting standards. 3. Buildings under construction; 4. Vacant buildings. 5. Please see below for preferred pricing additional ineligibility rules. 6. Any risk in a building over 60 years old. United Insurance Company BP underwriting guide

18 7. Any risk not specifically listed in the list of eligible classes. D PREFERRED MERCANTILE-SERVICE - ADDITIONAL REQUIREMENTS A 10% credit is available on those classes designated as eligible in the class schedule that meet the criteria outlined below. ELIGIBILITY 1. Buildings must be constructed within the past 25 years. 2. Proactive management attitude toward preserving property and preventing injury to persons. 3. Previous losses must be reconciled by specific, corrective action to prevent recurrence. 4. Excellent housekeeping, building condition and maintenance. 5. Security and protection must be commensurate with values and nature of property insured. 6. The applicant must be in business for at least two years and have at least three years management experience in a similar business operation. 7. Three year hard copy loss runs are required to qualify for preferred. E INELIGIBILE RISKS 1. Buildings having restaurant, manufacturing or painting exposures in same fire division except within an enclosed sprinklered mall. 2. Buildings having deep fryers or grills. 3. Selling of alcoholic beverages. 4. Drugstores located in hospitals, clinics or laboratories. 5. Wholesale operations. 6. Occupancies with woodstoves. 7. Occupancies with gasoline sales. 8. Applicants with non-standard previous carriers. 9. Applicants canceled, non-renewed, or declined for underwriting reasons. 10. Vacant buildings. 11. Applicants with past history of bankruptcy. 12. Applicants with loss frequency or severity problems. F APPLICATION Submit a completed signed United Insurance Company Elite Business application, or an acceptable industry application. If supplemental questionnaire is required it must be completed prior to binding any risk. G CLASSIFICATION RULES (See Appendix b that follows this guide for all Elite Business classes.) When classifying the locations the governing factor is the "kind of business" conducted. If there is no specific "kind of business", the location shall take the classification comprising the majority value of the property at that location. United Insurance Company ELITE BUSINESSOWNERS VI. POLICY FORMS Utah United Insurance Company BP underwriting guide

19 The Businessowners based products will utilize ISO forms with the addition of our own company forms as needed. (See United Underwriters website for commonly used forms and applications) United Insurance Company ELITE BUSINESSOWNERS VII. APPENDICES Utah See the attached classification lists with associated underwriting requirements. A. Businessowners classes, rates & underwriting notes B Premium development - (all rating and policy issuance shall be accomplished using the InsurPas policy administrations system) United Insurance Company BP underwriting guide