The retroactive nature of long-tail claims makes occurrence-based CGL policies (comprehensive general liability insurance policies) very valuable to business owners, churches, school boards and landlords. These policies became available on the American market in the 1940's. For an occurrence-based CGL policy to provide defense or indemnity, the property damage or bodily injury that triggers the policy must occur within the policy period. However, where the damage or injury does not become evident until years later (as often is the case with environmental damage, product liability or sexual misconduct scenarios), this insurance policy will still respond to a properly filed claim notice.
The comprehensive general liability policy insures business owners against claims made by parties damaged by the conduct of his employees, his products or his waste products provided that the damage occurs during the policy period and it is not the type of damage excluded under the language of the policy. Even where the employee's sexual misconduct does not become evident some twenty years after the occurrence, this policy can still provide defense and indemnity. Even where the underground storage tank's leak goes undiscovered for thirty years, as of the date the leak is discovered, the business owner can file a claim under his CGL policy issued the date the leak began. Even where the business owner's product is not revealed as harmful for forty years, once its harmful effects surface, a claim can be filed under this policy issued when it was placed in the stream of commerce.
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These are some very good reasons to treat your occurrence based comprehensive general liability policy like a valuable business asset. Yet often, business owners treat the CGL policy as if it had no value after its expiration date and they discard it with expired fire insurance policies to make room for new document storage. Should they try to obtain a copy of the policy at a later date they often find that the insurance broker issuing the policy has failed to keep a copy in his archives. Further, just knowing the identity of the underwriter does not provide the basis for an appropriately filed claim. Insurers receiving claim notices under comprehensive general liability policies without identifying policy numbers and policy periods typically reject the claim because they lack adequate information with which to locate the policy in their files.
Lost or misplaced CGL policies can be located however and their conditions, terms and limits proved by the practice of Insurance Archeology. The Insurance Archeologist searches for and assembles lost policy information in much in the way that an archeologist searches for bone fragments and reconstructs prehistoric skeletons. Once evidence of a policy is assembled, even if the policy itself is not found, the terms and conditions of the policy can be established and a viable claim can be filed.
A well conducted Insurance Archeology project can provide literally millions of dollars in defense costs and indemnity to beleaguered business owners faced with response costs for injuries and damages occurring under previous management but surfacing recently. The retrieval or reconstruction of a lost or misplaced CGL insurance policy can protect a company from serious financial loss and sometimes save a company from bankruptcy.
