Insurance Insights ~ November 1999

Contractual Liability -- Contracts and Leases

What is contractual liability? One definition is "A non-insurance transfer of risk." One party (indemnitor) assumes the financial consequences of certain liabilities of another party (indemnitee) by way of a contract or lease. Black's Law Dictionary describes an indemnitee as the person who, in a contract of indemnity, is to be indemnified or protected by the other. An indemnitor is the person who is bound, by an indemnity contract, to indemnify or protect the other.

When entering any contract or lease with another party, a number of basic facts can be assumed:

1. Your insurance agent usually is not involved in the drafting of the contract or lease. They are written by attorneys who use legal terms, not insurance terms.
2. Usually indemnitors do not inform their insurance agents, attorneys or accountants that they have entered into a contract or lease.
3. The terms of the contract or lease usually affect the liability and property insurance needs of both the indemnitor and the imdemnitee.
4. Unfortunately, many parties enter into contracts and leases without a full understanding of their obligations under those contracts they have signed.
5. In some instances the obligations assumed under a contract or lease may be greater than the indemnitor’s insurance coverage, or in some cases those obligations may be uninsurable.

A simple fact of life is that business owners will enter into contracts and leases on a frequent basis, especially trade contractors involved in building or remodeling. By following a few simple suggestions, you may avoid problems that arise when entering these contracts and leases:

1. Make sure that you inform your insurance agent of all contract terms and provisions. This is essential in order to provide adequate insurance protection.
2. Give your agent a complete copy of the entire contract or lease, not just the "insurance requirements" section. This will allow your agent to have a complete picture of the agreement and be in a better position to advise you of any insurance needs. Your agent may also be able to alleviate potential problems by simple clarification of insurance terms used in the contract.
3. Finally, have an attorney review any contract or lease before you sign. Don’t seek advice from your accountant or insurance agent on provisions of the contract. They are not attorneys and cannot practice law, and neither should you. An attorney review is essential. Can’t afford one? Think again, you can’t afford not to have one.

Deer Alert

In recent years, accidents involving deer have been increasing at an alarming rate, and the results can be disastrous. The Pennsylvania Game Commission advises that there are over 40,000 deer collisions a year in Pennsylvania. These claims result in an average repair cost of $1500. There is also the possibility of serious injury, if the deer goes through the windshield and kicks the occupant.

Deer are particularly active in the months of October, November, and December, when they are mating, and in early March, April and May when doe and young deer are migrating. As you travel, be more aware of deer crossing areas during this time, and always drive slower through these areas.

Deer usually run in pairs, so if you see one, there's usually more to follow. A driver will generally see the first deer, but it's the second or third deer that gets hit. Another awareness fact is that a car's headlights totally blind a deer, rendering them helpless.

Retail companies are now offering devices called deer whistles. These whistles sell for around $10, and are mounted to the front of the vehicle. Air travels through the whistle emitting sound waves to scare the deer away. Results are mixed on these devices.

If after these precautions, you do hit a deer, there are several safety factors to consider. Do not try to move the carcass yourself. This compromises your safety, as the animal may not be dead, and a wounded animal will kick and act against anyone within reach. Secondly, you are placing yourself in the path of traffic.

You should report the incident to local authorities and then your insurance company as soon as possible. Do not remove all evidence of the deer from your car, since your insurance carrier will want to see proof of the deer collision.

Hopefully, this information will help you avoid an encounter with a deer along our highways. Here's to safe driving this fall.

Long Term Care Insurance

Long-term care (LTC) -- it's not just for seniors anymore. The need for quality nursing home and home health care has crossed all age and economic boundaries. Long-term care insurance has joined the ranks of life insurance, disability insurance and annuities as an important part of a complete protection package. Without LTC protection, a family could drain its entire savings if faced with an illness or accident.

Long-term care has become the single biggest retirement expense, and the one least planned for.

According to the Department of Health and Human Services, about several million men and women older than age 65 needed LTC in 1998. In addition to these senior statistics, many younger people receive care for accidents and illnesses. These figures are expected to continue rising.

Long-term care protection no longer covers just nursing home payments. This protection can be designed to provide care in Assisted Living facilities, hospice care, Adult Day Care, or even care in your own home during a recuperation. Some plans will even pay family members to provide your in-home health care needs.

Many younger people feel that LTC is not for them. By purchasing this important coverage at a younger age, you will pay lower premiums, as well as protect against the worries of how to pay for medical bills if a tragedy does strike.

With many new features available in this market, you can design a plan to suit your individual needs, and relieve your family of the stress that this type of crushing financial burden would bring about.

Don’t wait until tragedy strikes -- call today. G.C. Weimer Associates has licensed, qualified agents that can assist you with questions and develop an affordable, high-quality long-term care plan for your family.

INSURANCE INSIGHTS is an electronic newsletter published monthly by G. C. Weimer Associates, Inc. Information contained herein is accurate to the best of our knowledge and belief as of 11/1/99. If you have a topic of interest for a future issue, e-mail us at info@gcwinsure.com.