This article is short, simple, and super helpful for avoiding the pitfalls often created by manuscript insurance policy endorsements.
The Insurance Services Office (ISO) writes insurance policy forms that the majority of insurers either use directly or at least partially.
It is not altogether to think of the ISO forms as the “industry standard” or basic forms.
Some ISO forms offer broader coverage to insureds, and others restrict coverage in favor of the insurers.
In very loose, general terms, ISO forms do tend to extend broader coverage and be more favorable to insureds.
If an insurer takes the time to write (manuscript) their own form, or adapt the language provided by the ISO forms, it is rarely good news for insureds.
If I had to guess, I’d say 95% of time it’s bad news for you as an insured.
Endorsements are forms that are added on to the end of an insurance policy that modify the policy in some way.
Some endorsements are good, and broaden coverage. Most seem to be exclusionary and restrict, limit, and/or narrow the coverage provided by the base policy form.
Manuscript endorsements are notoriously bad, and if all you ever did was pay attention for manuscript policy endorsements you’d likely avoid some serious gaps in your commercial insurance.
Here’s a real-life example:
A concrete subcontractor has a manuscript endorsement on their general liability and umbrella liability that excludes any bodily injury or property damage caused by improper mixing, installation, or replacement of faulty concrete.
Further along in the same policy another manuscript endorsement excludes any bodily injury to any employee of any contractor or subcontractor.
Yes, you read that correctly.
Their policy essentially covers nothing. All thanks to two manuscript endorsements that are a paragraph long each.
Oh, and those two policies together cost the insured well over $100k.
The bottom line: Your insurer, no matter who they are or how good they are, will not often take the time to write a completely different form for YOUR benefit.
They will absolutely do so to avoid paying claims, which is to THEIR benefit.
Read your policy carefully. Read its manuscript forms SUPER carefully.
To Your Success,