Exclusions

Subscribe to Exclusions

Part II: exclusions, considerations, filing a claim, and tips

This is the second part of a two-part blog series titled, “Music to my ears: Insurance coverage for musical instruments”. Part I covers policy options.

Professional and amateur musicians alike can purchase insurance to cover their instruments.

Musical instrument policies are subject to exclusions and requirements, which may vary. Requirements under the policy are another important component.

Exclusions

Some common exclusions in musical instrument coverage include:

  • Wear and tear, inherent defect, deterioration, and vermin damage.
  • Breakage of strings, reeds, or drumheads while the instrument is being played.
  • Neglect, such as the failure to maintain or properly store the instrument.
  • Loss or damage during maintenance, repair, or restoration.
  • Humidity, aridity, or temperature extremes (unless caused by storm or fire); condensation; dampness; frost; dust; effects of sunlight; fading; and changes in color, texture, or finish.
  • The cost to obtain an estimate or quote to replace or repair the musical instrument.
  • Damage or loss while the instrument is in an unattended vehicle (though cover may be obtained, sometimes limited by the night-time clause, excluding coverage for loss or damage of instruments left in a car between 10 p.m. and 6 a.m. There may be no coverage without forced entry).
  • Transit by air, postal, or other delivery transit.
  • Costs as a result of being unable to use the musical instrument (which may be covered by business income loss coverage under a commercial policy).
  • Unexplained disappearance.
  • Intentional damage.
  • Damage due to pollutants.
  • Governmental or military action, war, and terrorism (though cover for terrorism may be purchased from some carriers as an endorsement for an additional premium).
  • Nuclear hazard.

Some exclusions may include anti-concurrent causation language, precluding coverage when the excluded cause of loss is involved, whether there are other causes or not. In particular, the nuclear hazard, war and military action, and pollution coverages may be excluded regardless of whether any other covered cause of loss is also present.

Other considerations

  • Valuation issues

Insurance carriers providing agreed value coverage require an appraisal for valuation purposes when they issue and/or renew a policy. Appraisals should be reviewed at renewal time, and they should be updated at least every three years. If the instrument is extremely rare, insurers may request their own appraiser prior to issuing coverage.

The value of the insured instruments may be determined at the time of loss or damage, even though an appraisal was required at the time of placement. The insurer may force the insured into arbitration or litigation regarding valuation. If your instrument is more than three years old, the policy should include new for old cover so you can get full replacement value.…

Continue Reading Music to my ears: Coverage considerations for musical instrument insurance (Part II of II)

When is a person an “employee” under one insurance policy but not an employee under another?   Conflicting or inconsistent definitions across multiple policy lines issued to the same company can give rise to significant gaps in insurance coverage, as a recent opinion of the U.S. Court of Appeals for the Seventh Circuit instructs, Telamon Corp. v. Charter Oak Fire Insurance Co., Nos. 16-1205 & 16-1815 (7th Cir. March 9, 2017).

Telamon hired Juanita Berry in 2005 under a series of consulting agreements with her personal communications company, J. Starr Communications. Over the next six years, Berry’s job responsibilities expanded beyond the terms of the consulting agreements, with Telamon eventually naming her Vice President of Major Accounts, the senior-most manager in one of the company’s divisions on the East Coast.  Part of Berry’s job was to oversee an asset recovery program under which Telamon removed old AT&T equipment and sold it to salvagers.  But without the company’s knowledge, Berry personally removed the old equipment and sold it, keeping the money for herself.  By the time Telamon discovered the scheme, Berry had embezzled $5.2 million.  Telamon fired Berry, and the government indicted her on wire fraud and tax evasion charges.  She was convicted and sentenced to five years in prison.…

Continue Reading Schrödinger’s Coverage: When a Risk is Covered and Not Covered by Insurance

Last week, the United States Court of Appeals for the Third Circuit issued a ruling that may make it more difficult for Pennsylvania policyholders to obtain coverage for the misappropriation of advertising ideas under standard commercial general liability policies. In The Hanover Insurance Company v. Urban Outfitters, Inc., No. 14-3705 (Oct. 23, 2015), the Third…

In life, sometimes even the law imitates art. As if copied straight out of the script of “Catch Me If You Can,” the U.S. District Court in South Carolina issued a ruling on October 21, 2014 in which it held that despite a false application for professional liability insurance submitted by an applicant pretending to be a doctor, the insurance afforded to the company and other doctors and nurses identified as named insureds under the policy remained in force and was not void ab initio as to the innocent co-insureds.
Continue Reading Catch Me If You Can: Fake Doctor’s Application Voids Coverage For Himself But Not For Innocent Co-Insureds

The insurance industry reacts not only to real losses, but it reacts with equal concern to perceived risks, particularly where those perceived risks could, at least in theory, amount to significant financial loss for policyholders and/or insurers. The Ebola “crisis” is the latest example of the insurance market reacting to a perceived risk that may never amount to an actual insurable loss.
Continue Reading Perception versus Reality: ACE Adds an Ebola Exclusion Just in Case