All insurance policies are organized by sections and no matter which insurance company you’ll use there are many similarities in the contract provisions. Knowing what the sections are and what they typically are describing will help you in quickly getting the information you need from these contracts which can sometimes exceed 100 pages.
The first section is usually that of the declarations page or pages. These pages declare exactly the name, address, amounts of coverage, and limits that the insurance carrier is providing for you. It is basically a brief summary that highlights the main components of the risk that the insurance carrier is providing coverage for.
Usually the insuring agreement section follows next. This is the contractual legal verbiage that connects the insurance carrier and you as the insured into a binding legal contractual agreement. The two most common forms of insuring agreements are whereby the carrier agrees to pay on behalf of the insured or whereby the carrier agrees to indemnify the insured for covered claims and losses.
There is always a section regarding definitions of words, terms, and clauses. Most of these definitions and terms have been adjudicated in the court systems throughout the United States and the courts have already determined based upon case law what these definitions mean in an insurance contract.
There’s always an exclusions provision section which details the coverages and claims that the insurance carrier does not desire to provide coverage for. While there are generic exclusions that are almost always included in every insurance contract, depending upon your classification of your business there might be specific exclusions for your industry that they carrier in imposes upon you.
The conditions section is also a part of the insurance contract. The conditions usually has to do with the duties of the insurance carrier and the duties of the insured as to what you were required to do before during and after a claim.
Sometimes there is a specific premium section provision page that outlines how the premiums are promulgated. Some carriers are very transparent and there rates in premiums whereas most of the carriers do not clearly defined how the premiums are determined except in a generic sense.
Towards the end of the insurance policy there are categories for special endorsements or manuscript forms that are included within the contract. These are special provisions in verbiage based upon your unique business.
Finally there’s always some kind of miscellaneous provisions section where everything that does not fit cleanly into one of the other categories listed above can be categorized. By having a familiarity of how an insurance contract is laid out can help you when you are searching for specific information within your contract or when comparing other insurance proposals and their specific contracts.
