What should I look for in an insuring clause?

Q:

What should I look for in an insuring clause?

A:

Let's first take a look at what an insuring clause is. An insuring clause is one of the most important—if not the most important—elements of your insurance contract because it contains information about the scope of your coverage (learn more about The Key Elements of an Insurance Contract). It basically outlines what the insurance company is responsible for under this contract and its contents are usually legislated by the Insurance Act of your jurisdiction.

Some important bits to look out for include:

  1. Parties to the Contract: for example, the named insureds on the policy (find out Who Is a Named Insured).
  2. Policy Period: this stipulates the start and end time of your policy (it will likely start at 12:01 AM Standard Time at the address of the named insured).
  3. Loss Payees: this is similar to "Parties to the Contract" but it basically enumerates all parties with insurable interest in the object(s) being insured by the policy.
  4. Coverage and Amount of Insurance: this identifies the extent of coverage and the amount of insurance available to pay claims for each coverage category.
  5. Rates and Premiums: this will indicate the cost of your insurance.
  6. Subject Matter of Insurance: this part talks about the item(s) insured and their location (usually in the form of an address).

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About the Author: (Director of Education at PNC Learning)

Jacques grew up around the insurance industry and began actively participating in 2013. Since then, he has gotten a Level 2 license, won Insurance Council of BC awards in 2015 and 2020 for academic excellence in the insurance licensing courses. He educates insurance professionals through PNC Learning and as a Thought Leader at ReFrame Insurance.

In his day job as an insurance broker, he helps businesses with creative risk management solutions and strategic advice when it comes to insurance.

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