Please help me. Are you REALLY covered?

[Rob Markoff]

To me, having things is writing just makes for good business practice.

While I have been insured with Hartford for many years, I realized that I did not have a complete copy of my policy - so I asked for one with all endorsements and extentions. It is about 1" thick.

While reading the policy, I came across this section:

2. We will not pay for physical loss or physical damage caused by or resulting from:

(6) The following causes of loss to personal property:
(a) Dampness or dryness of atmosphere;

(b) Changes in or extremes of temperature; or

(c) Marring or scratching

3. We will not pay for loss or damage caused by or resulting from any of the following:

(c) Negligent Work: Faulty, inadequate or defective:

(2) Design, specifications, workmanship, repair,.........

This is the standard language of a Business Owners Policy. Please read on-

While others have said that "they are covered" - have you read your complete policy to see what coverages and exclusions you may have?

I asked for written proof of coverage and so far no one has stepped up to show me specific language in their policies that shows that they do indeed have coverage for customers goods while actively being worked on - with specific reference to marring and scratching.

The policy that I have is designed for framers and makes specific reference to:

Customers Goods Extension

"We will pay for direct physical loss or damage to property of others while in the care, custody or control of the Named Insured for framing, repairing, alterations, or processing..........."

"We will pay for direct physical loss or damage caused by:

".......falling objects.....marring; faulty workmanship......"

and the extension also modifies the existing language in the Business Owner's Policy and reads:

Exclusions of the Special Property Coverage form are deleted:

2.c. (6) (c) Marring and Scratching; and
3.c. (2) Negligent Work.

So, without this special customers goods extension, it would appear that a standard Business Owners Policy does not have these coverages included in it - and may, in fact specifically exclude those coverages.

If you do something to a customer's piece and damage it - are you really covered?

PLEASE PROVE ME WRONG-

Look at your policies and tell me who you are insured with - show me that there are other companies that make specific reference to the act of framing in the policy and also specifically cover marring and scratching.

 

[RParrish]

No I am not covered for workmanship and the like, that would be in addition to my business liability coverage. I once had my shop broken into, nothing was taken, but I looked into my coverage and discovered I only covered for about $250.00 worth of OPP, Other peoples property, and only covered in case of fire or acts of god pretty much. I did increase that to over $30,000 and it cost me about $50 a month.

I would guess 99% of us framers are not covered. Based on the the additional cost and actual need it would not make sense. I just replaced a $38 photograph because it was damaged will drymounting, there is now way I would put that through the claims process, no way. I would replace it and take that amount off the final bill.

I take it what you are getting at is basically a type of malipractice insurance.

 

[Rob Markoff]

Randy - thank you for being honest.

I agree that a $38 claim is pointless, especially with a $250 deductible -

I think that the dollar value of what you frame needs to be considered and also your ability to pay for a loss.

We too have replaced lower dollar value items out of pocket. This is our 30th anniversary. The reality is that in the course of doing business mistakes will happen. The more things you frame, the greater your opportunities for loss.

My reputation is such that we see many high dollar value items in the shop. We are not like some of the Big Box framers who have a disclaimer on every work order that limits liabilty.

It is not unusual to be working on a piece worth 5 figures or more. So a $250 deductible on a $15,000 claim is certainly worth having the insurance for. And I sure sleep better knowing that should such a loss happen, I do have coverage.

If you have retained profit of 8 - 11% at the end of the year, (after you have paid yourself a living wage )- how much profitable work would you have to do to earn the $15,000 you would be out of pocket for if you did not have insurance?

Answer - $150,000 if you had a 10% profit. That means you need to gross $150,000 just to get back to zero.

Insurance premiums are a tax deductible expense.

 

[Artrageous]

When I almost had a claim a few years ago, I found out that I was lacking coverage for pottery and porcelain artwork. My former insurance agent was more then happy to write me a new policy covering me for things that they hadn't protected me from initially.

My new agent, made sure I was properly covered, as well as suggesting an umbrella policy.

I also picked up an Inland Marine policy to cover in transit and under construction coverage.

http://en.wikipedia.org/wiki/Inland_marine_insurance

 

[TopGun]

Marring, workmanship, temp and humidity? Seems like all the things that could happen to a framer on a bad day. Like art, a frame job performed is suseptible to the customers opinion and in this biz, claims could be made every day. We try our best, but some customers can be pretty irrational.

 

[Sherry Lee]

Rob, you raise issues that ALL of us should be looking into with a MAGNIFYING GLASS! I changed companies when Hartford raised their rates so much. I need to read the fine print on my new policy with that M.G.!

I would be outraged to think I'm not "fully" covered given what we framer's pay. I must share, my business insurance (NOT AUTO) costs me FOUR TIMES what I paid for my Nursing Malpractice insurance. That speaks VOLUMES!

 

[wvframer]

One more thought about insurance. My agent noted that the company was kind of in the dark and having to estimate about premiums initially because there were not enough frame shops for them to have an experience rating. This probably explains the gradually decreasing premium as they gain experience with me. I spend whatever decreases on increases in coverage on contents, etc. Since it comes right off the top of my schedule C, I don't worry about the amount as much as the coverage.

 

[Rick Bergeron - CPF]

Rob,

We use the PPFA Hartford plan through Meadowbrook and had our first claim in 11 years recently. Last year's premium was $578.

The 35+ yr old LE print just 'bubbled' in several places while in our Care, Custody & Control. We were just in the wrong place at the wrong time; but luckily, there were still copies available. The Meadowbrook/Hartford plan replaced the $3500.00 print, less our $250 deductible with hardly any questions.

Regardless of claims by some people and also some insurance agents that "Bailee's" or Inland Marine endorsement covers the same thing, I haven't ever seen it in print that the piece is covered while actively being worked upon.

I am one who actually reads my policies and have found that it is very important to read the policy again just prior to calling to file a claim. Once the wrong words leave your mouth, even by accident, it is difficult or impossible to change those words.

 

[Jay H]

Eventhough they may cover those items, do you have any indication as to how the value of said items are determined? Is it possible that insurance companies do not value art the same way that your clients do. You may still not be as covered as you believe even with such specific language.

 

[cjmst3k]

What about the other angle of this - having customers insure the items themselves? You could add this to the bottom of your invoices:

"Thank you for choosing ___________ for your framing order. Due to the unique nature of each item brought to us, we cannot assume responsibility for any artwork or object left with us to be worked on or framed. Reasonable care will be exercised against damage or loss while these objects are in our possession. We recommend that the owner cover valuable items with special insurance."

 

[Paul Cascio]

That's an awesome idea. Makes a great addition to the usual disclaimer.

 

[Rob Markoff]

You could add this to the bottom of your invoices:

"Thank you for choosing ___________ for your framing order. Due to the unique nature of each item brought to us, we cannot assume responsibility for any artwork or object left with us to be worked on or framed. Reasonable care will be exercised against damage or loss while these objects are in our possession. We recommend that the owner cover valuable items with special insurance."

Good idea in principle - but even with "reasonable care" things do happen.......and I think that UCC laws may supersede any disclaimer. When a bailment is created there may be obligations one assumes that create specific responsibilities on the part of the merchant.

This will be one of the topics covered in the class. Thanks for bringing it up.

UCC = Uniform Commercial Code Created in 1952, the Uniform Commercial Code (UCC) consists of uniform rules coordinating the sale of goods and other commercial transactions throughout the 50 United States.

Bailment describes a legal relationship in common law where physical possession of personal property, or chattel, is transferred from one person (the 'bailor') to another person (the 'bailee') who subsequently holds possession of the property. It arises when a person gives property to someone else for safekeeping.