Evergreen USA

Insurance Terms Made Simple

 

Additional Insured: Adding a party as "Additional Insured" to your insurance policy actually provides protection to that party under your policy. If someone requests to be added as an, "Additional Insured", it means that at the time of a claim, they could share your liability limits. By sharing your liability limits with someone else, in the event of a claim naming both you and the additional insured, you could be decreasing the level of protection that you have.

Example:
You have an LP Gas operation at your park to fill and resell LP gas to campers. As a requirement of your contract with your propane supplier, the supplier requests to be listed on your policy as an additional insured. You carry a $1,000,000 Per Occurrence General Liability limit. An explosion occurs while you are filling a camper's propane tank. The camper is badly burned and sues both you and the propane company for his $800,000 worth of injuries. Both you and the propane company are deemed negligent by courts. You are responsible for $500,000 of damages and the propane company is responsible for $300,000. Your policy would defend both you and the propane company for the entire $800,000 claim. If you don't carry Umbrella Liability limits and the judgment would have been greater than the $1,000,000 Per Occurrence Limit, you would have been responsible for paying the remainder of the judgment out of your pocket. (See also: Umbrella Liability)

Aggregate Limit: The aggregate limit is a limit in an insurance policy stipulating the most it will pay for all covered losses sustained during a specific period of time, usually one year. Aggregate limits are commonly included in liability policies.

Example:
Most Evergreen general liability policies are written with $1,000,000 per occurrence / $2,000,000 aggregate limit. This means that during the one year policy period that up to $2,000,000 in liability coverage is available to be paid out during that year. The most paid for a single claim due to one "occurrence" would be $1,000,000. If a policyholder suffers a $1,000,000 claim, they would have an additional $1,000,000 from their "aggregate" limit to cover any future claims within that policy term.

Authority Having Jurisdiction: A regulatory body that establishes codes or regulations; such as building or electrical codes, playground construction/operation or swimming pool or area requirements.

Examples: Consumer Product Safety Commission (CPSC), Underwriters Laboratory (UL), National Fire Protection Agency (NFPA), National Swimming Pool Foundation (NSPF) and American National Standards Institute (ANSI)

Automobile Insurance:

Example:
You are driving your business vehicle in town to run errands for the park. Suddenly, a vehicle stops in front of you and you are unable to stop in time. You rear-end the vehicle in front of you and cause damage to the vehicle's bumper and injure the driver. You sustain whiplash injuries and have damage to the front end of your vehicle. The business could be considered to be at fault for this accident.

Business Income & Extra Expense: This is business interruption insurance. It would cover your loss of earnings, or the additional expense to conduct your business, should a loss occur based on the same covered perils as your buildings and contents.

Example:
A fire completely destroys the only bathroom building you have and it happens to be your biggest holiday weekend. You insured the building, so the insurance company will help you to rebuild the building (see: Property Coverage), but in the meantime the people in your tent sites can no longer stay at the campground, so you will lose that income. Also, you also have a number of full hook up sites that people are not occupying anymore, because they were right next to the bathhouse and find the mess created by the fire to be unacceptable.

Business Income & Extra Expense will help you in two ways in this situation. The business income portion of the coverage will give you monies for you net loss of income that resulted from campers leaving because of your loss. The extra expense portion of the coverage will help you minimize your lost income. In this example Evergreen would work with the campground or RV park owner to determine if it was feasible to have portable bathhouse units brought in to service the tent sites, or other sites, who wanted to use the bathroom.

With Evergreen's specialized claims department we will be able to assist you as we understand how campgrounds and RV parks work - because that is our business - our only business! So we will be able to work with you to determine if it makes sense to bring in a portable bath unit or not and be able to help you find one that is specific to your business needs.

So while your property insurance coverage covers you to replace the building, Business Income & Extra Expense coverage helps you to minimize your losses of income as a result of the building being destroyed and unusable for some period of time.

 

Captive Insurer: A captive is created by one or more noninsurance companies to insure their own risks.

In Evergreen Indemnity's case, a group of campground owners banded together in the wake of the Insurance crisis of 1986. Because the traditional insurance marketplace was facing a period of turmoil, insurance premiums either skyrocketed, or coverage became completely unavailable. A group of campground owners formed Evergreen to provide a long-term stable insurance program for the long term survival of the camping industry.

Catastrophe: A severe loss occurring within a specific period of time in excess of a certain dollar amount (such as $1 million).

Most commonly associated with property insurance. The most common example of a catastrophic event would be a hurricane or a wildfire affecting a large geographic area.

 

Certificate of Insurance: A certificate of insurance is a one page document providing a snapshot of basic insurance information in force at the time the certificate is issued.

As an Evergreen client, you can expect the following service from us when you require certificates of insurance for your business:

• Certificates of insurance for LP Gas and others that have requested proof of coverage for your park in the past are prepared automatically each year at renewal, you don't need to call us each year to request it.

• New certificate of insurance requests are handled within 48 hours.

Crime Coverage: The two types of crime coverage that Evergreen offers are Employee Dishonesty and Money and Securities.

Deductible: A deductible is a portion of a covered loss that the insured retains and is subtracted from the amount the insurer pays at the time of a claim.

Example:
You have insured your maintenance building for $50,000 and you have a deductible of $500. A maintenance person has put a bunch of rags they used to mop up varnish in the garbage can. The rags in the garbage can spontaneously combust. Before the fire department can arrive to extinguish the flames, there is $10,000 of damage to the building. Since the amount of damage is under the limit of your insurance, you are entitled to the entire $10,000 of loss, less the deductible you choose for your maintenance building. So you would receive $9,500 for this loss.

The larger the deductible that you choose, the less premium you will have to pay for coverage. So if you had chosen to have a $1,000 deductible on your maintenance building, you would have only received $9,000 for you loss, but you also would have paid less premiums each year for your insurance.

Directors & Officers Liability: A coverage used most often for associations and corporations that are not closely held, this coverage would protect your business against loss and expense that occurs when a claim or suit is brought against your company, its directors, officers, or trustees for a wrongful act based on an error or omission, negligence, breach of duty, misstatement, or publishers liability.

Example: Individuals who serve as directors and officers of corporations can be sued for breach of their corporate duties by those who claim to be harmed financially by negligent management. Claimants in suits involving directors and officers' coverage are often times stockholders of the corporation.

Due Care: The standard of conduct that a Reasonably Prudent Person would observe in a given situation. This concept is used in tort law to indicate the duty that one would normally owe to others. The failure to use due care is negligence.

Exclusion: The primary function of exclusions is to clarify the coverage that an insurer provides.

Example: A campground buys a hot air balloon to give rides to campers for a cost. When the hot air balloon has an accident and the passengers are injured the general liability insurance policy the campground purchased does not provide coverage for this because "Hot Air Balloons" are excluded on the policy.

Question: But why is this excluded? Can't I just a get a policy that will cover everything that could possibly go wrong. Answer: An exclusion is added to an insurance policy for any number of reasons. One reason is to eliminate coverage for exposures and risks that are uninsurable. Nuclear war is a risk that most insurance companies can not insure, so they exclude it. The biggest reason for exclusions is to keep premiums reasonable. Exclusions allow insurers to preclude risks that would otherwise drive up costs significantly. By keeping costs down, insurers can offer premiums that a sufficiently large number of insurance buyers will consider reasonable. In the example of the Hot Air Balloon, you will find most general liability policies exclude aviation. Certainly an insured may be able to pay to have the exclusion removed or buy a separate policy for aviation, but to include coverage for aviation on every policy would drive up the costs for all policies when only a very small portion of the people are apt to need the coverage.

 

Federal Risk Retention Act: The act allows a Risk Retention Group (RRG) to form as a liability insurance company under the laws of at least one state. Owners of the RRG are required to be policyholders. Filing of annual financial statements with its chartering state and all other jurisdictions in which it operates are also required. The Act also specifically exempts participation in state guaranty funds, therefore, if a RRG becomes insolvent, insureds and claimants have no protection through the fund.

In Evergreen USA's case, the RRG was formed in 1989 licensing originally in Arizona. In 1997 the state of license was moved to Vermont, where it remains today. All Evergreen USA clients hold a minimum of (1) Share of non-assessable stock in the company which proves ownership in the RRG. Although Evergreen does not participate in any state guaranty funds, through strict investment philosophies and reinsurance, our clients should not be left unprotected in the event that they become insolvent.

Fire Legal Liability (also known as Damage to Premises Rented To You): This liability coverage is designed to protect you if you rent a temporary premises for a special event, such as a meeting facility or reception hall, and are held responsible for causing damage to the rented building.

Example: You hold a special training session at a local hotel each year for your employees. During the meeting, one of your employees plays with his lighter and the stack of training material he is sitting next to catches fire. Luckily, everyone made it out of the room safely. The hotel holds you responsible for the fire and smoke damage to the room.

Garage Coverage:

General Liability: General Liability insurance provides coverage for an insured's liability to third parties due to negligence on the part of the insured. The insurance company pays damages to claimants on behalf of the insured if held liable for injuries or damages.

Example: A park employee is mowing the lawn in a common area and rocks are thrown from the mowing deck. A motor home is damaged and a child is struck by the flying rocks. In this case, general liability coverage would apply to the property damage to the motor home as well as the bodily injury to the child.

Second Example: As a part of your "Family Fun Day" event, you offer hayrides on your premises. The tractor you are using severely malfunctions and the trailer carrying 15 children overturns causing one death and multiple injuries.

Inland Marine: Inland marine insurance is a derivative of one of the oldest forms of insurance, ocean marine insurance. Almost every business has items that could be insured through inland marine insurance. The two most common forms of inland marine coverage that Evergreen offers are for campground equipment and computers.

Liquor Liability Insurance: Liquor liability insurance provides coverage for bodily injury or property damage for which an insured may be held liable by reason of the following:

• Causing or contributing to the intoxication of any person

• Furnishing alcoholic beverages to a person under the legal drinking age or under the influence of alcohol

• Violating any statute, ordinance, or regulation relating to the sale, gift, distribution, or use of alcoholic beverages.

This coverage is necessary for businesses involved in the following activities:

• Manufacturing, selling, or distributing alcoholic beverages

• Serving or furnishing alcoholic beverages for a charge, whether or not such activity requires a license or is for the purpose of financial gain or livelihood

• Serving or furnishing alcoholic beverages without a charge, if a license is required for such activity

Loss Reserves: Loss reserves are an estimate made by an insurance company of the total amount they expect to pay for a claim when it is settled.

Example: As a part of your "Family Fun Day" event, you offer hayrides on your premises. The tractor you are using severely malfunctions and the trailer carrying 15 children overturns causing multiple injuries.

An insurance adjuster investigates the scene, and based on the evidence he collects he must determine whether or not he believes you are liable (at fault) for the accident. Because it appears you are at fault for this case, he must estimate the potential claim amount based on the severity of injuries of each person involved in the accident.

Material Safety Data Sheet (MSDS): A material safety data sheet (MSDS) is a form containing data regarding the properties of a particular substance. An important component of product stewardship and workplace safety, it is intended to provide workers and emergency personnel with procedures for handling or working with that substance in a safe manner, and includes information such as physical data (melting point, boiling point, flash point, etc.), toxicity, health effects, first aid, reactivity, storage, disposal, protective equipment, and spill handling procedures. Under OSHA's (Occupational Safety Hazard Authority) Hazard Communication Standard, employers are required to provide employees with access to MSDS sheets at all times for any chemicals they may be working with, or are exposed to, in the course of employment.

Named Insured: The named insured can typically be found on the first page of an insurance policy, also known as the "declarations page". The first name listed on the policy, or the "first named insured" is, in effect, the authorized contact person. The first named insured is responsible for paying premiums. They also have the right to request cancellation of the policy, receive notice of cancellation from the company and receive any return premiums.

Non Assessable Stock: A class of stock in which the issuing company is not allowed to impose levies on its shareholders for additional funds for further investment. Non-assessable stocks typically have the words "fully paid and non-assessable" printed on the stock certificate.

Occurrence: An occurrence is an accident, including continuous or repeated exposure to conditions, which result in bodily injury or property damage that was neither expected nor intended from the standpoint of the insured. Often referred used in liability policies, the "Per Occurrence Limit" is the most paid for the total damages for bodily injury or property damages arising out of any one "occurrence". (See also: Aggregate Limit)

Example:
Most Evergreen general liability policies are written with $1,000,000 per occurrence / $2,000,000 aggregate limit. This means that during the one year policy period, up to $2,000,000 in liability coverage is available to be paid out during that year. The most paid for a single claim due to one "occurrence" would be $1,000,000. If a policyholder suffers a $1,000,000 claim, they would have an additional $1,000,000 from their "aggregate" limit to cover any future claims within that policy term.

Pollution Liability: Pollution Liability provides coverage for defense and off-site clean-up costs for pollution incidents that you become legally responsible for.

Example: You provide gasoline at your boat dock and your containment system fails. The lake, owned by the town, is contaminated. You are sued by the town for negligence as well as clean up costs. Your pollution liability coverage would defend you for the lawsuit and cover the clean up costs up to your limit of liability.

 

Pre-Existing Condition: A term often used when relating to health insurance, a Pre-Existing Condition is a condition that began earlier than the date that insurance became effective.

Example: Individual health policies generally only cover injuries from accidents or sicknesses which occur after the health policy becomes effective.

 

Premium: The amount of money that is charged by an insurance company to a policyholder for their insurance policy.

While shopping for insurance, comparing premiums is certainly a factor in the decision making process. A common mistake made when shopping for insurance is relying solely on price as a factor in the purchasing decision. Many factors, including coverage and additional benefits, need to be heavily weighed as part of your final decision.

In Evergreen's experience, we find that in most cases that we are competitive on price but it is certainly true that there are times we are not because of things such as our exacting rating system or because another company is trying to 'buy' their way into the camping industry. Over the years we have recorded many campground insurance programs that have come and gone. These companies are often under pricing their policies to get into the business only to find that it is not a viable type of business for them to write at that price, so they exit the market.

We work hard to provide long term stable pricing. We also work hard to make sure to support the industry and our clients. Some of these things include:

• Giving back to the camping industry financially is important to us. We only serve the camping industry so we make certain that some of the monies we receive for premiums are given directly to organizations like ARVC and state and regional camping associations.

• Providing the only exclusive risk management program for our clients. We have a staff of three risk managers who inspect only campgrounds and RV parks, and they can therefore offer practical solutions to campgrounds to minimize their exposure and increase the safety of their guests.

• Our clients receive training videos that we produce exclusively for their industry.

• We work hard to make sure that our service is the best it can possibly be. We are always looking for ways to improve, but we have a set of service standards that all our employees live by to make sure our customer's needs are met in a timely manner.

• Offering a discount to clients who belong to their state association. Whether this is looked at as a discount to those who belong or a penalty for not belonging, it allows us to help drive campgrounds and parks to become association members, which is something we strongly believe is very important for them to do. There is no doubt that they will be more successful if they are association members.

We work hard to be competitive both in terms of price and also in terms of benefits and services.

Property Insurance: Property insurance is often referred to as "fire" insurance although it generally covers more than fire losses. Property insurance is designed to provide coverage for your buildings and contents.

Reinsurance: Reinsurance is insurance purchased by an insurance company (primary insurer) to reduce their risk.

Example:

A large building in a newly developed RV resort is worth $5,000,000. A primary insurer may be willing to accept the first $3,000,000 in losses, then cede the rest to a reinsurer. The building is completely destroyed by fire. The primary insurer will pay the first $3,000,000 and the reinsurer will be called upon to pay the remaining $2,000,000. However the client never has to worry about collecting from the reinsurer as this is the responsibility of the insurance company. The client will receive the entire amount directly from the company.

 

Risk Management: The assessment and monitoring of activities that could present property damage, injury or death.

As applied to Evergreen, our risk management inspectors visit each of our insured parks on a bi-annual basis to review safety procedures, release & waiver forms, as well as to act as a second set of eyes when reviewing areas of a parks operation which may be more susceptible to losses.

 

Risk Retention Group: Similar to a captive (see also: Captive Insurer) A risk retention group provides liability coverage for its members.

In Evergreen USA's case, a group of campground owners banded together because the traditional insurance marketplace was facing a period of turmoil. Insurance premiums either skyrocketed, or coverage became completely unavailable. A group of campground owners formed Evergreen USA to provide a long-term stable insurance program for the long term survival of the camping industry.

Spoliation of Evidence: This term refers to the intentional, or negligent, withholding, hiding, alteration or destruction of evidence relevant to a claim investigation. Any action an insured does, or fails to do, which compromises any evidence in their control (prior to a full investigation) will be viewed as tampering and will hinder any attempts to defend the insured on that claim.

 

Subrogation: An insurance carrier may reserve the "right of subrogation" in the event of a loss. This means that the company may choose to take action to recover the amount of a claim paid to a covered insured, if the loss was caused by a third party. After expenses, the amount recovered must be divided proportionately with the insured to cover any deductible for which the insured was responsible.

Example: You are involved in a minor automobile accident where you are not at fault. Your bumper needs replacing. Instead of going through the at fault party's insurance, you put a claim into your own insurance. Because you went through your own insurance, your insurance deductible was applied to the claim. Your insurance company has the right to subrogate against the at fault party to recover the cost to replace your bumper and you have the right to recover the deductible.

Trailer Spotting Coverage:  Trailer Spotting coverage provides protection if you help direct someone onto a campsite or in launching their watercraft and they damage their unit.  It also provides protection if you or your employees drive the camper’s RV onto the site and damage the unit. 

Example:  Your campground employee directs a camper driving a motorhome into a site that is surrounded by large oak trees.  The employee is “spotting” and while signaling to the driver the direction the motorhome should turn, a miscommunication occurs.  The driver misjudges the turn and a limb scratches the custom paint job on the motorhome.   Trailer Spotting coverage would pay to repair the paint job on the motorhome.

 

Underwriters Laboratories Inc. (UL) is a U.S. privately owned and operated, independent, third party product safety testing and certification organization. UL develops standards and test procedures for products, materials, components, assemblies, tools and equipment, chiefly dealing with product safety. Any product stamped with the UL means it has been approved by them through a rigorous testing process.