Companies Sue over Michigan Fireworks Insurance Requirement

Several fireworks companies are suing over what they call Michigan’s excessive insurance requirements under a new state law.

The companies filed suit on Feb. 1 in Detroit federal court seeking to overturn a requirement to obtain $10 million in liability insurance in order to sell an expanded line of fireworks.

A state law that took effect this year allows the sale of more powerful fireworks such as firecrackers and other devices such as bottle rockets and Roman candles

The companies suing the state say the insurance provision is unconstitutional and favors larger companies that can afford the coverage, giving them an unfair advantage in the market.

A spokeswoman for Gov. Rick Snyder says the insurance level was appropriate given safety priorities with the expanded fireworks availability.

Source: Insurance Journal

Driving Agreement For Your Kids

According to the Michigan State Police, Traffic crashes are the leading cause of death and injury for young drivers. In 2008, drivers 16 – 24 years of age constituted 14 percent of all drivers yet were involved in 36.3 percent of all crashes and 31.6 percent of fatal crashes. Along with night driving and number of passenger restrictions, one of the most important tools that parents can use to help keep their young drivers safe is an enforced Driver Safety Agreement. It is important that the agreement is reviewed and discussed not only before it is enacted, but periodically throughout their early driving experience. Below is a sample agreement.

My Driver Safety Agreement

Driving is a privilege that I may lose by violating this agreement or may have suspended for other reasons such as (but not limited to) unsatisfactory school grades and violations of family trust.

I will obey any curfews or restrictions imposed by my driver’s license.

I will obey all traffic laws and speed limits.

I will not drink and drive, or use illegal drugs, or drive if I am taking ANY medication that may affect my driving.

I will not ride with anyone whom I know or suspect is under the influence of alcohol or drugs (legal, or illegal).

I will not permit any open or empty containers of alcohol, or transport anyone who I know or suspect may be carrying illegal drugs in any vehicle I operate.

I will not ride in any vehicle where I know there are empty or open containers of alcohol or where anyone who I know or suspect may be carrying illegal drugs.

I agree not to drive with or transport anyone who is in possession of any weapon.

I will always wear my seatbelt and shoulder harness. I will not ride in any vehicle in which there are more people than seat belts.

I will make certain that I can always hear emergency vehicles and traffic sounds.

I will drive defensively.

I will avoid being a distracted driver, particularly avoiding texting or operating a cell or smartphone

I will not transport passengers unless they are properly secured by a seatbelt.

I will always wear a helmet if I am driving or riding on a motorcycle. I will not transport a passenger unless he or she also wears a helmet.

I will drive in a manner that respects the safety of myself, my passengers, other drivers and pedestrians.

I will ignore peer pressure. While driving, I am in control. I can stop and ask others to leave my vehicle and, as a passenger, I can ask a driver to stop and let me out.

I will not drive unless I feel safe and certain of my ability.

I will be especially alert during dangerous conditions such as rain, snow, sleet, wind, heavy traffic, fog, unlit roads, construction zones, and accident scenes.

I will always lock every door and take the keys when I leave the vehicle. I will park in areas where I believe the vehicle will be safe from damage or theft.

I will obey the driving instructions of my parent(s) and of law enforcement officers.

Additional Conditions Required By My Parent(s):

________________________________________________________________

________________________________________________________________

I have read, understood and I will comply with this agreement.

Signed______________________ Witnessed_________________________

Date:_______________________

---

COPYRIGHT: Insurance Publishing Plus, Inc. 1996, 1998, 1999, 2001, 2006

What is Lloyd’s of London?

Lloyd’s of London is an organization that has provided insurance worldwide for more than 300 years. The organization has a reputation for handling either very expensive or exotic types of insurance. Surprisingly, Lloyd’s is neither an insurance company nor, for most of its history, a corporation. It is made up of more than 3,000 active members. There are well over 10,000 inactive members. Memberships consist of the underwriters, the insurance brokers who bring them business, and the investors known as “names.” The underwriters accept insurance business on behalf of syndicates (groups of “names”).

The history of Lloyd’s begins at Edward Lloyd’s coffeehouse in 1688, where he attracted a clientele of merchants, particularly ship owners with vessels and cargoes needing protection. Mr. Lloyd’s establishment quickly evolved into a meeting place where businessmen sought brokers to place insurance with wealthy, reputable men. Character and integrity were important because the persons (called underwriters) who agreed to invest in the ships and cargoes put their personal fortunes at risk in order to pay their share of any claim. If a ship’s voyage was successful, the underwriter would share in the profits.

Note: The term underwriter came from the practice of persons agreeing to insure a ship and/or its cargo by placing his signature under the name of the vessel he was willing to sponsor.

Lloyd’s of London has long been identified with British history and the growth of worldwide commerce. It is an international insurance market, located in London, whose members cooperate with each other, compete with each other and, of course, compete against other insurance organizations. There are four major markets at Lloyd’s: Marine, Non-Marine, Aviation and Motor. Lloyd’s also has a smaller market that handles short and long term life insurance.

Insurance is not placed with the Corporation of Lloyd’s, a society incorporated under Act of Parliament of 1871. The Corporation provides the premises, shipping information services, administrative staff and other facilities that enable the Lloyd’s market to transact insurance business. The actual insurance transactions are handled by thousands of Lloyd’s members. About one-third of the membership is actively engaged in the market. The remaining members provide capital, but do not actively place business in any of Lloyd’s insurance markets. Only the underwriting members may accept insurance business on behalf of a syndicate.

Historically, a policyholder with a valid claim could be certain that the claim would be paid, whatever the cost to the member who accepted the risk. Formerly, every underwriting member was responsible up to the full extent of his personal assets for his share business. If his personal assets were not enough, Lloyd’s would make any deficit out of its reserve funds.

Today, Lloyd’s liability is more conventional, limited in the same manner as traditional insurance companies. The change was necessary due to its long-term problem in handling losses associated with asbestos claims. Lloyd’s created a separate entity to handle that large source of loss and many organization members became inactive (no longer writing new business) in order to meet their payment obligations.

While the number of active memberships have substantially decreased; they are made up of, primarily, corporate entities, so Lloyd’s capacity to write business in the global marketplace is still substantial and makes it likely that Lloyd’s will continue to be an important part of the insurance market.

Are Fireworks Accidents Covered?

A longtime, extremely popular summer rite is to enjoy setting off fireworks. However, it’s important to think before striking a match or using a lighter on your first firecracker, sparkler, smoke-bomb or bottle rocket.

For all their fun, fireworks are capable of causing serious injuries persons and substantial damage to property. If you cause a fireworks accident, are you insured? In most instances, if you carry a homeowners policy, you are protected. For instance, imagine you are setting off some fireworks in your driveway for your children and their friends. Suddenly, a sparkler you gave to a neighbor’s child violently flares up, burning her hand and face. Your policy could cover her injuries a couple of ways. If the injuries are minor, her medical treatment could be handled under the Medical Payments portion. However, if the child’s injuries are more serious and her parents sue, your policy’s liability portion should handle your legal defense as well as a legal judgment.

Here’s another example of a loss that could be covered. While setting off some bottle rockets, one smashes through a window of a house across the street. The rocket sets the home’s living room curtains on fire. It then spreads to the carpeting and the room’s furnishings. The neighbor is able to put out the fire with a garden hose, but the result is thousands of dollars in damage caused by fire and water. Your policy should handle this damage.

Coverage Shortfalls

There are instances where your homeowner policy does not offer coverage. If it’s illegal for you to set off fireworks, this legal hurdle could result in any loss being excluded by the policy. Since a homeowner is meant to handle losses related to owning and living in a home, there’s no coverage for a person who uses their home for making, selling, storing or distributing fireworks. Any business activity involving fireworks is going to cause a big problem if a loss occurs.

Injuries to yourself or others in your household are not covered because Medical Payments and Liability coverage is designed to handle loss suffered by persons outside of your household. Also, if the injury was not an accident, there’s no coverage. Playfully tossing a firecracker or aiming a bottle rocket at another person could be considered intentional, even when no injury was intended.

So when dealing with fireworks, make sure they’re legal, that they’re used carefully and only for entertainment. Then your chances are good that any loss may also be covered.