Frequently Asked Questions (FAQs)
ACE Frequently Asked Questions

If this is your first experience buying Commercial Auto Liability, we've compiled a list of Frequently Asked Questions to help you make your decision. Please read them over and see if your question is answered. If not, we invite you to contact us so that we may offer further assistance.
 
Commercial Auto Liability
  • Commercial Auto Liability - Claims Senario

  • Commercial General Liability
  • If claim for U.S. product is brought in foreign court…

  • Is claim for a U.S. product sold in other countries covered?

  • Is occurrence and aggregate limit available higher than $1,000,000?

  • Commercial General Liability - Claims Senario

  • Commercial Property and Business Income
  • Commercial Property and Business Income - Claims Senario

  • Defense Base Act (DBA)
  • Is DBA insurance available to contractors of all sizes, including small subcontractors?

  • Why is the coverage costly?

  • Is there oversight from the U.S. government on claims?

  • Is DBA insurance optional?

  • What types of benefits are provided?

  • How are DBA insurance rates computed?

  • Why do DBA insurance minimum premiums exist?

  • Employers Responsibility
  • When would coverage be needed?

  • What is Voluntary Compensation?

  • What is Executive Assistance®?

  • What is Endemic Disease?

  • Employers Responsibility -Claim Scenario

  • International AD&D and Medical - Employee
  • International AD&D and Medical - Employee - Claims Senario

  • Kidnap & Extortion
  • Kidnap & Extortion - Claims Senario

  • What does K&E Coverage provide?

  • Who handles K&E Incidents?

  • K&E limit options…

  • What affects K&E premium?

  • Who should buy K&E?

  • K&E coverage territory…

  • More Details About Neil Young Associates

  • Marine Cargo Coverage
  • Marine Cargo Coverage for estimated annual premiums greater than $10,000

  • Commercial Auto Liability - Claims Senario
    Real World Claim Scenario Solution
    U.S. Driver Not Covered Under Japanese Policy
    • American manager of Japan branch of U.S.-based business lends car to employee, also an American.
    • Driver causes accident with car carrying Japanese family, resulting in serious injuries and lawsuit against U.S. firm.
    • Event not covered by rental company’s policy.
    U.S. firm’s International Advantage® difference-in-conditions coverage responds to lawsuit, provided vehicle is used for company business.



    If claim for U.S. product is brought in foreign court…
    Yes, if a claim is brought in a foreign court for a product manufactured in the US, the judgment rendered would be held up in the US court even though the Insured had no physical presence in the foreign country. (Physical presence meaning, by either a physical location or legal entity). The US courts may enforce the judgment as if it were rendered here in the US. Of course, the judgment would have to be in compliance with American law.



    Is claim for a U.S. product sold in other countries covered?
    Yes, coverage is provided whether suit is brought in the country where the occurrence occurs or suit is brought within the US court system.



    Is occurrence and aggregate limit available higher than $1,000,000?
    Yes, we can provide limits of up to $5,000,000 for “each occurrence” and Products—completed operations aggregate. We do not provide limits higher than $1,000,000 for Premise Damage, or $10,000 for Medical Expense.



    Commercial General Liability - Claims Senario
    Real World Claim Scenario Solution
    Bodily Injury Liability
    • U.S.-based contractor accidentally tips stack of building materials at Colombian construction site, causing injuries to several workers of Bogota-based sub-contractor.
    • Resulting lawsuits are not covered under contractor’s U.S. GL policy.
    International Advantage® GL policy covers defense costs and judgment against U.S. firm.
    Products Liability
    • Metal disks manufactured by U.S. firm are made into bottle caps by German soda bottler.
    • Cap blinds German child, whose family seeks damages from bottler and U.S. manufacturer.
    • Lawsuit filed in German courts is not covered under U.S. firm’s GL policy.
    International Advantage® GL policy insures U.S. business against costly settlement – pays court costs when case dismissed.
    Premises Legal Damages
    • On trip to South Africa, U.S. exec accidentally allows bathtub in rented high rise apartment to overflow.
    • Resulting flood causes water damage to apartment and several floors below.
    • Premises liability claim is not paid by employer’s U.S. GL policy, which covers loss by fire but not flood.
    International Advantage® GL policy covers premises damage to rented apartment from all perils.
    Contractors Liability
    • U.S.-based contractor is hired to install equipment in Moscow offices of Russian customer.
    • Contractor subs project to Russian firm with low limits of insurance; loss occurs.
    • Lawsuit brought against U.S. firm by Russian customer not covered by contractor’s U.S. GL policy.
    International Advantage® GL policy covers losses occurring in Russia and most other countries.



    Commercial Property and Business Income - Claims Senario
    Real World Claim Scenario Solution
    Commercial Property – Office Equipment
    • U.S.-based service company maintains sales office in France.
    • During severe thunderstorm, building’s windows are blown out and office equipment is damaged by torrential rains.
    International Advantage® policy pays for property damage at covered location.
    Commercial Property – Salesperson’s Samples
    • Employee of U.S.-based medical instrument manufacturer travels to Tokyo for international industry trade show.
    • As salesman attends opening reception, thief enters hotel room and steals samples worth $5,000.
    International Advantage® policy reimburses employer for loss of samples.
    Commercial Property – Cargo
    • U.S.-based manufacturer ships approximately $1million in goods to Europe annually.
    • Cargo ship carrying $25,000 shipment takes on water in high seas, resulting in loss of all merchandise aboard.
    International Advantage® pays for all cargo losses sustained during shipment



    Is DBA insurance available to contractors of all sizes, including small subcontractors?

    Yes, DBA insurance is available in the U.S. insurance market for contractors of all sizes, including small subcontractors, and is generally placed through insurance brokers or agents specializing in international property and casualty insurance. While a number of U.S. insurance carriers provide DBA insurance, some employers can exercise their right to become qualified self-insurers through the Department of Labor, and can thus cover their own losses. 




    Why is the coverage costly?
    DBA insurance coverage may seem costly because DBA insurance losses often apply on a much broader basis than standard domestic workers’ compensation insurance losses. Several insurance professionals see DBA insurance as one of the most comprehensive workers’ compensation benefit programs in the U.S. For example unlike typical workers’ compensation coverage, DBA insurance covers employees who typically work more than five days a week and more than eight hours per day, and employees who work under dangerous conditions. Additionally, courts rely on two legal doctrines when making determinations regarding DBA insurance, the "Zone of Special Danger Doctrine" and the "Reasonable Recreation Doctrine." (Please visit http://www.dol.gov/owcp/dlhwc/lspm/lspm0-200.htm for more information on these doctrines.)

    Compensation amounts for disability are fixed by law; for example, compensation for total disability is two-thirds of the employee’s average weekly earnings, subject in any event to a specified maximum weekly cap. Death benefits, also set by law, are paid based on the number of eligible dependents, again subject to a specified maximum weekly cap.




    Is there oversight from the U.S. government on claims?

    Yes, the U.S. Department of Labor oversees all DBA claims. Initial losses from Iraq are reported to the New York Department of Labor and Office of Workers’ Compensation for oversight and adjudication. The hearing process includes informal and formal conferences and input from a Benefits Review Board and the Federal Court system.




    Is DBA insurance optional?

    No, as a general rule DBA insurance is not optional. United States federal law requires that DBA insurance be purchased for certain situations, including those in which U.S. or foreign-based employers contract with the U.S. Government (USG) to perform certain USG projects or services outside the continental U.S., including public work contracts involving construction and services provided in connection with the national defense or war activities outside the U.S. DBA insurance is also required when such employers contract to perform certain projects on U.S. military bases outside the U.S. Failure to obtain DBA insurance can result in stiff penalties.




    What types of benefits are provided?

    DBA insurance provides for short- and long-term disability benefits and medical benefits to covered employees who are injured or killed in the course of their employment. The coverage also provides death benefits for their eligible survivors. According to the U.S. Department of Labor, permanent total disability and death benefits may be payable for life, and are subject to annual cost of living adjustments.




    How are DBA insurance rates computed?
    Like domestic U.S. workers’ compensation insurance rates, DBA insurance rates are either computed per $100 of payroll or with a minimum premium established, meaning the premium base for DBA insurance is computed per $100 of covered employee remuneration, subject to a minimum premium level. Additionally, policies are calculated using remuneration as the basis. "Remuneration," sometimes referred to as "pay-roll," means the entire payment for services rendered by the covered employee, whether paid in money or some substitute for money. For purposes of computing premiums, remuneration includes regular pay (i.e., salary or hourly), commissions, and bonuses.

    As with domestic workers’ compensation insurance, DBA insurance rates vary depending on many factors, including for example the hazardousness of the work being performed, the insured’s loss or accident experience, the payroll exposure, the insured’s financial standing, the insured’s and the covered employees’ experience, security and safety practices, and covered employee concentration levels (i.e., employees working, traveling, lodging, or eating together).




    Why do DBA insurance minimum premiums exist?

    The minimum premiums for DBA insurance are generally determined by the carrier to cover significant upfront and administrative costs, including without limitation contract administration, underwriting, claims handling, reinsurance, accounting, etc.




    When would coverage be needed?
    If the insured will be on board a vessel in international waters, or working dockside or on board a vessel in a foreign country, MEL [Marine Employers Liability] coverage may be required.


    What is Voluntary Compensation?
    Workers Compensation coverage that is provided voluntarily by an employer in the absence of a statutory requirement to provide workers compensation.



    What is Executive Assistance®?

    Executive Assistance® refers to medical, legal, personal and security services provided by our policy. Some services may be included without charge for our policyholders. Other services may require additional payment. Please refer to the Medical Assistance limit for repatriation and evacuation coverage




    What is Endemic Disease?
    A disease that is constantly present to a greater or lesser degree in people of a certain class or in people living in a particular location.



    Employers Responsibility -Claim Scenario
    Real World Claim Scenario Solution
    Voluntary Compensation
    • U.S. firm hires Mexican national to manage South American sales efforts.
    • During prospecting call in Chile, Mexican national injures back in fall down flight of stairs.
    • Mexican Social Security system does not cover work-related injuries sustained outside nation’s borders.
    International Advantage® policy covers exec with work injury benefit, provided accident occurs on job.
    Employers Liability
    • U.S. contractor hires Australian heavy equipment operator for Middle East pipeline project.
    • Crane malfunction lands Australian in hospital, where medical expenses are covered under local compensation plan.
    • Worker brings multi-million dollar legal action against employer for negligent equipment maintenance.
    International Advantage® policy covers U.S. firm for defense against employee’s suit.
    Repatriation
    • U.S. marketing manager on trip to China suffers broken hip and requires delicate operation to address life-threatening injuries.
    • Evacuation to Hong Kong hospital is medically necessary for the employee to receive proper treatment.
    International Advantage® policy pays repatriation costs under Executive Assistance® service.
    Voluntary Compensation 1
    • U.S. CEO touring company facility in Vietnam sustains serious injuries in auto accident.
    • Since victim is not subject to U.S. workers’ comp laws because of executive officer status, he has no coverage under his company’s domestic workers’ compensation policy.
    International Advantage® covers CEO’s medical expenses via voluntary compensation plan, as long as employer chose to provide benefits prior to accident.
    Voluntary Compensation 2
    • While stationed temporarily in Latin America, engineer for U.S.-based energy firm contracts Hepatitis B.
    • Under employer’s domestic workers’ compensation policy, employee has no coverage for endemic disease.
    Provided Hepatitis B is contracted in Latin America as result of employment, International Advantage® covers medical expenses.



    International AD&D and Medical - Employee - Claims Senario
    Real World Claim Scenario Solution
    Non-occupational Illness
    • Employee of U.S.-based IT firm travels to Australia to conduct audit in Sydney branch office.
    • Worker suffers heart murmur in hotel room, is treated at local hospital, and pays bill with personal credit card.
    • Back in U.S., employee’s HMO refuses reimbursement for extra-territorial medical treatment.
    International Advantage® medical insurance covers expenses and/or out-of-network charges if employee’s does not, and guarantees payment to hospital.
    Non-occupational Injury
    • While in Japan to visit work site of U.S.-based employer, Israeli national slips and falls on wet floor in hotel lobby, injuring back and spine.
    • Worker is taken to Japanese hospital, but has no coverage under Israeli national health plan.
    Because employer has International Advantage® medical insurance, ACE office in Japan makes payments directly to hospital.
    Non-occupational Illness
    • U.K. exec of U.S.-based firm is hospitalized for pulmonary embolism while visiting New York for trade show.
    • Employee’s medical coverage does not extend beyond U.K. borders.
    International Advantage® medical insurance pays all incurred expenses, less deductible.



    Kidnap & Extortion - Claims Senario
    Real World Claim Scenario Solution
    Kidnapping
    • Executive of U.S.-based retailer travels to Panama to visit company-owned facility.
    • On way from airport to hotel by taxi, she is abducted and held for $500,000 ransom.
    International Advantage® policy covers ransom money and related expenses as a result of kidnapping. ACE USA, via Neil Young Associates, provides expert security consultant to evaluate situation, advise on possible options, and coordinate crisis management.
    Product Alteration Extortion
    • U.S.-based manufacturer generates 25 percent of revenues from products sold in Europe.
    • Spanish terrorist group contacts firm’s New York headquarters and threatens to contaminate goods in European supply chain unless company pays $1million.
    International Advantage® policy reimburses extortion money paid by insured to deter terrorists from contaminating supply chain. ACE USA, via Neil Young Associates, provides priority crisis response and expert advice on managing incident to positive outcome.



    What does K&E Coverage provide?

    Ransom & Extortion payments, including: Kidnapping or Alleged Kidnapping for Ransom; Extortion upon you or a covered person(s); In Transit Extortion/Ransom Moneys Loss; Kidnap & Extortion Expenses; Detention Expenses; Legal Costs; Medical/Death or Dismemberment Incident Response




    Who handles K&E Incidents?
    Neil Young Associates, a premier global crisis consultant, provides information services and crisis response to clients.



    K&E limit options…
    Limits start at $250,000 and we can go up to $5,000,000.


    What affects K&E premium?
    Policy limit; Worldwide revenue; Countries of travel; Past incidents


    Who should buy K&E?
    Corporations, for their key executives and employees, and their families; Nonprofit organizations, for their benefactors, key employees, and their families; Schools and Universities for their faculty members and students traveling overseas on school sponsored trips; Churches for their members traveling on church sponsored trips.


    K&E coverage territory…
    Territory for automatic $50,000 K&E coverage:
    • Worldwide but excluding the following countries: Afghanistan, Algeria, Angola, Brazil, Chad, Colombia, Cuba, Georgia, Indonesia, Iran, Iraq, North Korea, Liberia, Lybia, Mexico, Nepal, Nigeria, Pakistan, Peru, Philippines, Saudi Arabia, Sri Lanka, East Timor, Russia, Sierra Leone, Somaliz, Sudan, Syria, Venezuela, Yemen, Zimbabwe
    Territory for optional K&E coverage:
    • Worldwide unless modified by endorsement



    More Details About Neil Young Associates
    • Founded in 1990, operates on a global basis.
    • Particular expertise in advising corporations on prevention of & response to kidnap & extortion.
    • International 24 hour response line.
    • Broad range of clients, including foreign gov’ts, oil & construction, airlines, trading consortia, media & communications, banks, mining.



    Marine Cargo Coverage for estimated annual premiums greater than $10,000
    Real World Claim Scenario Solution
    Goods on Board Ocean-going Vessel
    • U.S.-based manufacturer ships goods on regular basis to Europe.
    • Fire breaks out in cargo ship’s hold, destroying manufacturer’s entire shipment of containerized goods.
    ACE USA Commercial Marine Cargo policy pays for all losses to goods in transit.
    Goods in Temporary Storage
    • U.S.-based retailer imports retail goods for sale at various locations throughout United States.
    • While shipment is in transit from overseas, goods are stored temporarily at stateside distribution center.
    • Warehouse roof collapses under weight of heavy snow, damaging entire shipment.
    ACE USA Commercial Marine Cargo policy pays for all damage to goods in transit.
    Goods in Transit to Port for Shipment
    • U.S.-based manufacturer ships high-end consumer goods on regular basis to all parts of world.
    • Criminals hijack truck carrying goods to port facility for transport overseas, resulting in theft of entire shipment.
    ACE USA Commercial Marine Cargo policy pays for all theft of goods in trans







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