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Gene McKeeverThe following is a true story. I handle the hull and protection and indemnity (P&I) insurance for an historic tall ship. You would recognize the name of this famous vessel.

Anyway, the president of the non-profit organization that operates the ship was reviewing the insurance coverage with me when he asked if I wrote directors and officers (D&O) liability coverage. I said I did, and that it was a specialty of mine in addition to ocean marine insurance.

I wanted to know why he was asking about D&O coverage. It isn’t something a client will usually ask about.

The gentleman said that his insurance agent was reviewing a renewal questionnaire of his D&O coverage. As they talked, the agent suddenly asked him: “You mean you actually operate your ship? You sail it?” The president of the non-profit group said that they did. The agent replied with a comment that would make the head of any organization cringe: “Oh my gosh, that changes everything. We may have a problem placing coverage.”

It turned out that the insurance agent never knew that the historic ship actually sailed and instead had simply assumed the vessel was simply a relic and was tied to the dock. It most certainly was not, having just returned from an extensive trip.

But there’s more. The president of the non-profit group drives a vehicle owned by the organization. His now ex-insurance agent had insured it as a private vehicle, not a commercially owned one. This meant that the organization head was, without knowing it, driving around without valid insurance. Imagine how he felt about that.

It’s your insurance agent’s job to ask the right questions that will ensure you have the insurance coverage you need for your individual line of work.

Never be afraid to question your agent. You pay dearly for insurance, so make sure your agent is earning the money you pay him. Insist that your agent explain the coverage you’re receiving and make sure he or she uses plain language that you can easily understand.

And never hesitate to ask any question or seek a clarification. Your insurance agent works for you, not the other way around.

This article appeared in the January 2011 issue of WorkBoat magazine, where Gene McKeever, marine insurance specialist, is a monthly columnist.

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