Buyer Beware - Does your General Liability Coverage have a manifestation clause?

In the competitive market of insurance, brokers are always looking to come to the table with a lower premium then the competitor. One way they do this is by quoting a General Liability policy with a manifestation clause, but not disclosing the clause!


A normal full occurrence policy as long as the work was done during the insured's policy period a claim has up to 10 years to manifest itself and for claim to be filed. However when a manifestation clause is placed on a policy it limits this to the claim must manifest itself with the insured's policy period. If the claim manifests itself after the policy period the claim will not be covered. It basically turns a policy into claims made policy except they can say it’s an occurrence policy and they usually leave out the fact it has a manifestation clause.

Example:

Full occurrence policy without manifestation clause- June of 2007 a plumber fixes a pipe in a residence. August 2007 their general liability policy expires. Sept 2007 the pipe leaks due to being welded wrong the home owner files claim against the plumber’s insurance company and because they were covered when the work was done in June claim is paid out.

Policy with a manifestation clause- June of 2007 a plumber fixes pipe in residence. August their general liability policy expires. Sept 2007 the pipe leaks due to being welded wrong the home owner files claim against the plumbers insurance company and it is denied because of insured's *manifestation clause*. Although the work was done in June and the plumber had coverage at that time, the cause of claim did not manifest itself until Sept and their policy expired in August. If the pipe had leaked in August they "may* have paid claim.

for a free review of your insurance visit us at www.preferredamerican.com or www.clementeinsurance.com