Fundamentals of commercial insurance in the United States

Insurance regulation

In relation to insurance regulation in the United States, one of the most important aspects to be understood is that insurance is contracts, and, consequently, in a few exceptions the courts will follow the literal sense of their clauses. This greatly favours the insured, but it does not mean that the judge will "re-write" the clause in order to obtain a favorable resolution for the insured. This is why it is very important to understand correctly the content of the clauses and the exceptions of the coverage offered.

In this sense, although there are some lines of insurance contracts in which there is not much variation in their content (e.g., occupational risk insurance, known as "Workers ' compensation"), there are less standardized ones where their content It may vary significantly (especially, for example, principals ' and officials ' policies, "Directors & Officers Liability", as well as technology risk and privacy breaches, "Cyber" or "privacy").

In general, insurance is regulated exclusively at the state level (not the federal government), and significant variations in the insurance laws of the different states can be noticed, depending on the relative relevance of the insurers in the Local economy. It is interesting to note that despite having the insurance field a relatively important level of government intervention, there is no assistance from a public agency in case of a dispute with an insurer, more than anything in the area Commercial.

As a final point, as far as insurance regulation is concerned, as is the case in the United States, the most important regulations do not come directly from a law but from the "market." In this way, although legislation often requires certain coverage (e.g., banks or stock brokers must maintain certain insurance by law), ultimately the practical need for insurance comes from counterparts Of the commercial contracts and, of a general expectation that the companies hire the coverages that correspond to them according to the risks they face.

Basic types of insurance

Basically, there are two types of insurance - insurance of property ("first party insurance"), and liability against third parties ("third party insurance"). The first opera when the insured person or their property suffer direct damage. In that case, to claim the payment of insurance to the insurer, the insured must, after the incident occurred, to present evidence of the existence of the damage and the value of the damaged property.

The second, against third-party liability, offers protection against claims filed by third parties in which claimed damages are covered by the contract. The "protection" here consists of two distinct obligations, on the one hand the hire an attorney to file a defence on behalf of the insured (known as "duty to defend") and, secondly, compensation for the insured in the event of a fault against ("duty to indemnify").


List Insurance

  1. Basic Insurance concepts
  2. insurance commonly seen in the business environment
  3. Other insurance

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