CISR Commercial Casualty II cheat sheet

Workers' compensation is a no-fault statutory benefit system: the injured worker collects medical and indemnity benefits without proving employer negligence, and in exchange the employer receives tort immunity for workplace injuries covered by the statute.

Part One (Workers' Compensation) pays whatever benefits the state statute requires, with no dollar limit and no deductible; the policy does not add benefits beyond the statute.

Part Two (Employers' Liability) covers the employer's tort liability to employees for work-related injury or disease that falls outside the statutory benefit system, and it does carry a limit of liability, typically expressed as a per-accident limit, per-employee disease limit, and policy aggregate disease limit.

Part Three (Other States) applies when an employee is injured in a state not listed in Item 3.A of the Information Page; coverage is triggered only if the employer has filed for that state's benefits or the state's law requires the employer to provide them.

Premium components: payroll (per $100 of remuneration) times the classification rate, modified by the experience modification factor and any schedule or retrospective rating plan; minimum premium and premium basis are shown on the Information Page.

Benefits typically include medical care without dollar or time limit, temporary total disability (usually about two-thirds of average weekly wage subject to a state maximum), permanent partial and permanent total disability, death benefits, and rehabilitation.

Employers' liability exclusions include liability assumed under contract, punitive damages, intentional injury, and injury covered by a federal program such as FELA, Jones Act, or Longshore; the policy also excludes penalties for willful statutory violations.

The experience modification factor (EMR) compares the insured's actual losses to expected losses for its classification: an EMR above 1.00 raises premium, below 1.00 credits it; medical-only losses are typically reduced by a state-specific weighting.

Sole proprietors, partners, and LLC members are generally excluded from the definition of employee; corporate officers may be included or excluded by endorsement, and coverage for these individuals must be elected deliberately.

Symbols on the Business Auto Coverage Form (BACF) determine which autos are covered: 1 = any auto, 2 = owned autos only, 3 = owned private passenger autos only, 4 = owned autos other than private passenger, 7 = specifically described autos, 8 = hired autos only, 9 = nonowned autos only.

Liability coverage applies to sums the insured is legally obligated to pay because of bodily injury or property damage caused by an accident and resulting from the ownership, maintenance, or use of a covered auto; supplementary payments (bail bonds, defense costs) sit outside the liability limit.

Garagekeepers coverage insures damage to customers' autos left in the insured's care; it can be written on a legal liability basis or, by endorsement, on a direct (all-risks) basis, and it applies in addition to or instead of other coverage depending on the option elected.

Physical damage coverages are comprehensive (all causes other than collision or overturn), specified causes of loss, collision, and towing and labor; a deductible applies per covered auto per loss, and collision deductibles are commonly written separately from comprehensive.

The who-is-an-insured section varies by coverage: for liability, the named insured and anyone using a covered auto with permission; for physical damage, the named insured and, for covered autos, the owner and anyone holding a security interest.

Fellow employee exclusion bars liability claims brought by an employee of the insured injured in the course of employment, which preserves the workers' compensation system as the remedy; it does not apply to an employee's injury occurring outside the course of employment.

Drive-other-car coverage is not automatic in business auto; the named insured's use of a nonowned auto is covered, but an employee's use of a personal auto in the insured's business is covered only if the required symbol (usually 1 or 9) is shown.

The business auto policy does not cover employees' personal autos used for personal purposes, and it excludes autos used in the business of an auto dealer or repair shop unless declared; mobile equipment is also excluded from the auto definition.

A commercial umbrella provides two distinct coverages: excess over the scheduled underlying policies for losses those policies cover, and broader (drop-down) coverage for some losses not covered by the underlying policy but covered by the umbrella's own insuring agreement.

The umbrella responds only after the underlying limit is exhausted for a covered occurrence; the insured's self-insured retention applies when the loss is not covered by any underlying policy but is covered by the umbrella.

The umbrella's insuring agreement is broader than the underlying policies, but the umbrella generally does not fill every gap: it typically excludes obligations prohibited by law, workers' compensation benefits, and professional liability unless scheduled.

Excess (following-form) policies adopt the terms, conditions, and exclusions of the scheduled underlying policy and pay only after that policy's limit is exhausted; they do not broaden coverage.

Maintenance of underlying coverage is a condition of the umbrella: the insured must keep the scheduled underlying policies in force, and if an underlying limit is reduced or the policy is canceled, the umbrella's drop-down coverage is usually restricted or the insured becomes responsible for the gap.

Defense costs under an umbrella are typically payable in addition to the limit when the umbrella is excess of underlying coverage, but are usually included within the limit (and subject to the retention) when the umbrella drops down to provide primary coverage.

Aggregate limits in umbrella policies usually apply to the total of all covered losses for the policy period, while the underlying policies may have separate general aggregate and products-completed operations aggregates; the umbrella's aggregate sits above the combined underlying aggregates.

Umbrella limits are commonly written in $1 million layers above a $1 million underlying general liability, auto liability, and employers' liability program; the required underlying limits are shown in the umbrella's schedule of underlying insurance.

An umbrella does not automatically cover a gap in the underlying policy caused by an exclusion unique to that policy; the insured should compare the umbrella's own exclusions with the underlying exclusions to identify uninsured exposures.