©2015, College for Financial Planning, all rights reserved. Session 16 Professional Liability...
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Transcript of ©2015, College for Financial Planning, all rights reserved. Session 16 Professional Liability...
©2015, College for Financial Planning, all rights reserved.
Session 16Professional Liability Commercial Insurance
CERTIFIED FINANCIAL PLANNER CERTIFICATION PROFESSIONAL EDUCATION PROGRAMFinancial Planning Process & Insurance
Session Details
Module 9
Chapter(s)
3 & 5
LOs 9-5
9-10
Explain the different types and characteristics of professional liability insurance.
Explain a characteristic related to commercial property or commercial liability coverage.
16-2
The Planner’s Role
• Identify potential areas of loss
• Quantify risk
• Helping client understand potential risk
• Assess coverage
• Refer to appropriate professionals
• Review annually
16-3
One of the couples you work with just started an accounting practice where he works as the CFO for small businesses that acquire federal and state contracts. His spouse has a successful catering business, employing three full-time employees and 15 contract labor employees; they cater in-home events for wealthy clients, providing the food, bar, and valet services. She has a kitchen in her home, two vans, and a large truck.
What risks could destroy their financial security?
Professional Liability Insurance
Covers failure to use due carein professional practice
• Malpractice: physicians, surgeons, dentistso Can cause physical harm
• Errors and Omissions: insurance agents, attorneys, accountants, etc.o Can cause fiscal harm
16-4
Business Owner Exposures
• Commercial liability• Commercial automobile
o Liabilityo Medical paymentso Physical damageo Truckerso Garage
• Dishonestyo Employeeo Customer
• Property-related
16-5
Commercial General Liability
CGL is designed to protect businesses against non-auto liability, not involvingemployees.• Conditions of premises – customer
slips on a wet floor.
• Business operations – working in a customer’s home, damage is done to the home.
• Product liability – defective product injures a consumer.
• Completed operations – installed electrical fixture shorts out and causes a fire.
• Contingent liability – retailer’s role in selling a manufacturer’s defective product.
• Contractual liability – if a product is not fit for intended use it is a breach of implied warranty.
16-6
CGL Claims
Commercial General Liability availability:
1.Occurrence basis: need only to be in effect on date that an accident causing damage occurs to trigger coverage
2.Claims made basis: trigger for coverage is date claim is made against insured
16-7
Business Auto Insurance
Insured can pick from a wide range of coverage to meet specific business needs:• Any auto• Owned autos only• Specifically described autos• Hired (leased) autos only• Non-owned autos only
Other features are available to business owners to build a policy for their needs.
16-8
Commercial Insurance
• Mostly monoline coverage
• Two primary packageso Commercial
Package Policy (CPP)• larger firms• basic package of
property and liability coverages
• business customizes coverages based on needs
o Business owners policy (BOP)• smaller firms
16-9
Other Commercial Liability Coverages
16-10
Coinsurance for Commercial Property Coverage
insuranceof Amountrequired
eCoinsurancpercentage
cost tReplacemen
amount Maximumrecovery of
DeductibleLoss*required Insurance
carried Insurance
Coinsurance requirement* usually 80% of replacement
cost.This is primarily a concern in
the event of a partial loss.
*Insurance required is generally 80% of current replacement cost, but can vary on a company-specific basis from 70% to 90%.
16-11
Commercial Property Coverages
16-12
Additional Commercial Property Coverages
16-13
Question 1
All of the following professionals would be likely to purchase errors and omissions insurance excepta. financial planners.b. accountants.c. physicians.d. attorneys.
16-14
Want More Review?
Visit eCampus1.Click Programs or Individual Courses tab2.Click Online Classes tab3.Click MyChoice Recordings to expand4.Click Recordings link for your courseFinal recordings contain reviews.
16-15
©2015, College for Financial Planning, all rights reserved.
Session 16End of Slides
CERTIFIED FINANCIAL PLANNER CERTIFICATION PROFESSIONAL EDUCATION PROGRAMFinancial Planning Process & Insurance