Florida has a new insurance law, and this one is designed to protect consumers. Effective Oct. 1, commercial parasailing operators must have personal injury liability insurance. The policy limit may not be below $1 million per occurrence with an annual cap of $2 million.
Remember, there are two different kinds of coverage: occurrence and claims-made. Homeowners and auto insurance and other “personal” lines of insurance fall into the occurrence category. When the insurer receives the claim, the first thing the claims handler looks at is whether the coverage was in effect at the time of the occurrence. So, if you have a car accident on Dec. 31 and switched carriers on Jan. 1, your old carrier, the company that insured you on Dec. 31, would handle the claim.
Claims-made coverage is found more in commercial lines and business policies. The difference is that the policy covers any claim filed during the coverage period. Using the same fact pattern as above, let’s say a delivery truck is in an accident on Dec. 31. The company changed carriers effective Jan. 1 and did not hear about the accident until Jan. 2. The company files the claim with the new insurer — the date of the accident does not control; the date of the claim does.
With the parasailing insurance law, then, the company must have occurrence coverage. It is a little unusual for a business to have occurrence and not claims-made coverage, but the nature of this business may dictate the switch. The Legislature did not explain its decision in the bill or bill analyses.
There is more to the new law than this, though. We’ll explain in our next post.
Source: Insurance Journal, “Florida’s Parasailing Insurance Law Takes Effect,” Michael Adams, Oct. 3, 2014Share