What’s the difference between air travel and insurance policies? Nothing!

Traveling by a scheduled airline will typically not be a pleasurable experience, especially when it removes you from the seat you paid for (or worse).

When this happens, an airline will refer to the fine print of its Contract of Carriage. One major airline has 37,000 words in a 56-page document, but I do not expect any airline passenger will have seen, much less read and understood this Contract, but they surely will be held to its terms if it is convenient to the airline.

Insurance is no different. An insurance policy is a contract and a typical policy has thousands of words. Commercial Property Package, Automobile and Umbrella policies have over 57,000 words with most carriers and I doubt that anyone outside of a few insurance nerds (yours truly) has read and understood these terms and conditions.

Unfortunately, the Michigan Court of Appeals said in Zaremba Equipment, Inc. vs. Harco National Insurance Company that, indeed, you have an obligation to read your policy and the policyholder could be assessed a percentage of fault or not be able to recover at all against an insurance agent or an insurance carrier where they did not read the policies.

In addition, most policyholders, even where they read their policies, are not likely going to understand the nuances of the fine print of the insurance contract or the hundreds of optional endorsements or other policies that may be available to address coverage gaps.

This is why it is important to utilize the services of Property and Casualty attorneys or advisors, or competent insurance agents or brokers, or risk managers who take the time to understand the insurance policy and to be certain that it is negotiated to cover the risk of loss needs of your particular business.

This Special Report was written by Kenneth R. Hale, J.D., CPCU, AAI, LIC of Marsh & McLennan Agency LLC. Mr. Ken Hale can be contacted at 734-525-2412 or khale@mma-mi.com. More Special Reports are available at www.mma-mi.com.





























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