Our marketing contractor recently (unbeknownst to us at the time) put a couple of someone else’s photos (without their permission) on our website to promote an event that we were producing. We are now attempting to settle with this photographer (and avoid litigation). She (the photographer) wants an $18K settlement.
My question is, if we go through our general liability policy to cover this fee, will that cause our insurance premiums to increase in the future? Will we have trouble obtaining coverage in the future? We have no other claims in our whole 6-year history as a company.
Thanks for your help.
.JPG){kind=avatar}
The frequency is the number of claims that you have and how often they occur. Also are your claims predictable or are they unforeseen. Severity refers to the size or dollar amount of the claim. All of these factors and more will go into the decision to change your premium. If it is a claim that can happen again and there are no risk management procedures in place at your business, that is not in your favor. If you have a rather large claim that exceeds your premium that is also not in your favor. If you shop insurance companies every year and have no loyalty to the carrier, that is not in you r favor. If you are late paying your premium or have minimum coverage limits that can also be viewed negatively.
Conversely, if you do the opposite of the above mentioned, then a single claim maybe considered a rare occurrence and not worthy of effecting your premium the following year. The best thing to do is get with your agent and discuss all the facets of the claim and what best course of action to take.
1. Notify company of occurrence
a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include:
(1) How, when and where the "occurrence" or offense took place;
(2) the names and addresses of any injured persons and witnesses: and
(3) The nature and location of any injury or damage arising out of the "occurrence" or offense.
b. If a claim is made or "suit" is brought against any insured, you must:
(1) Immediately record the specifics of the claim or "suit" and the date received: and
(2) Notify us as soon as practicable
If you read the "Obligations at Insureds Own Cost" condition it says: "No insured will , except at the insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent."
There are many questions that would need to be answered, but if I were you I would put my insurance carrier on notice that there has been an incident and let them take the reigns. Please contact me if you have any additional questions or concerns about this claim. I would be happy to help guide you in the right direction. Have a great weekend.
Best,
Josh DeBoer
The worst case scenario, the claim will be denied.
Based on the information provided in your question, whether the carrier covers the claim or denies coverage, it is unlikely your policy premium will increase with the renewal.
However, depending on your carrier's loss experience with insureds with similar to your business operations and/or number of claims filed under similar conditions, the insurance company has several remedies:
- to increase rates for your class of business. That means the carrier won't debit your individual policy, instead they will increase rates for every business that provides same products or services.
- to send you a non-renewal notice. The carrier simply stops entertaining coverage for you, based on the loss experience.
-to exclude related exposures from future coverage. That means any future claim involving similar exposures likely won't be covered.
I suppose no insurance agent is able to give you a certain answer. Because the carrier's decision on claim and future plays with many facets, including policy wording interpretation, and also based on the actuarial data of the given insurance company. A simple web search can reveal countless stories of claims denied and then accepted, bad face lawsuits, etc.