Offering a new comprehensive business policy in just “THREE” pages
Competition for the small commercial marketplace is heating up in 2019. In response to the rising number of insurtechs dedicated to the small commercial marketplace, Berkshire Hathaway has responded in kind with the launch of THREE, its new comprehensive insurance product for small business. In what it is calling a “game-changing” product, it says its new offering will provide “…insurance coverage for workers compensation, multiple liability coverages (including general liability, errors and omissions, and cyber), property and auto” essentially all the insurance any business could need in just a three page policy.
In promising a fully comprehensive and easy buying experience, the insurer is providing the new policy direct to small businesses, bypassing brokers and other third parties.
Insurance is important protection for any business, but few small businesses have the time to actually read through the policy forms that are supposed to protect them.” explained Berkshire Hathaway Chairman Warren Buffett, in commenting on this new product. “With THREE a small business can be confident in the protection it is getting, because the whole policy can be read in a few moments. Every day, America’s small businesses prove that great things come in small packages. Now they can get insurance on the same basis.”
Launching in the summer of 2019, the company will be rolling out the product by state after obtaining the appropriate state regulatory filings and approvals. The website is already live, however, and provides a copy of the policy which we have provided below:
What the policy actually looks like…
Berkshire Hathaway has provided a sample copy of the policy on its website, which has been reprinted, in its entirety, below. To view the original policy on the website, please click on the above link.
Read Our Policy
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The coverage we provide your business under this policy:
This policy only covers your business for loss caused by occurrences during the policy period. An “occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful conditions that begin during the policy period. “Occurrence” also includes an error or omission by your business. Should any part of this policy, on its effective date, conflict with the laws of the state where your business is based, then that part of this policy will be automatically amended to meet the minimum requirements of those laws.
For your business’ property: We cover your business for theft of and physical damage to property your business owns or leases. As a direct result of a loss this policy covers, your business may have increased operating expenses or lose net income. After the Waiting Period on the Summary, we will cover these amounts until your business resumes normal operations (or until either Business Interruption limit on the Summary is reached). “Net income” means (i) net profit or loss before income taxes that would have applied and (ii) the continuing normal operating expenses, including payroll for employees who are not officers, executives, department managers or employees under contract.
For your business’ liability to others: We cover your business for amounts it is legally required to pay others as the result of an occurrence. We will provide legal counsel to defend any such claims. When listed Additional Insureds or employees of your business act on its behalf, they are also covered.
We also cover (i) claims of negligence, errors, or omissions in providing professional services, and (ii) claims against directors or officers of your business arising from their actions taken on behalf of your business. For these kinds of claims, if your business first learns about the claim during this policy, and previously had continuous insurance coverage that would have covered the claim, we will cover that claim even though it is not the result of an occurrence during this policy.
For Auto: We cover damage to or accidents involving vehicles on the Summary the same way we cover property and liability claims, but with the Auto limits listed on the Summary.
For Cyber: We provide your business with crisis management, data and system review and recovery services, breach notification, and credit monitoring, following a data breach or computer system hack.
Workers’ compensation insurance: Every state has workers’ compensation laws that provide benefits for injured employees. We cover your business for and will promptly pay amounts required by state workers’ compensation law. We will pay all installments of the compensation that may be awarded or agreed upon in connection with those injuries.
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If Something Goes Wrong:
If your business has a property loss from an occurrence, we will pay to repair the damaged property if possible, or replace it with something of similar capabilities. We only pay for buildings or vehicles that are on the Summary, up to the Limit or Listed Limit for each. For all other property (other than a building or a vehicle) that is damaged by an occurrence, we will pay up to the amount listed for Other Property on the Summary.
We will also pay necessary costs to keep your business going or to minimize the time it is out of business after a loss that we cover. We will pay these expenses until listed vehicles are repaired or replaced (or until the Listed Limit for that damage vehicle is reached) or your business has resumed at a new permanent location (or until either limit for Business Interruption has been reached).
For liability claims, we will have the right to decide how to prepare for and defend any potential claim, and to decide if a claim should be settled.
For cyber claims, we provide cyber incident response and breach coach services through our selected vendors.
If your business runs out of money (it is insolvent or in bankruptcy) or otherwise defaults after a person is injured by an occurrence, our obligation to pay will not be affected.
What we do not cover:
We do not cover any occurrence(s) that start or take place outside the policy period on the Summary. To be covered by any of this policy’s Coverages, the damage, liability, or injury must be caused by or arise from an occurrence during the policy period on the Summary. For any claims that we do not cover, we will not provide legal counsel to defend those claims.
We do not cover any company other than those named on the Summary, and we do not provide cover that is personal to you (or anyone) independent of your business. We do not cover damage to any building that is not listed on the Summary. We do not cover damage to, or accidents involving, any vehicle owned or leased by your business that is not listed on the Summary. We do not cover any Additional Insured for any claims that are unrelated to your business. We do not cover any claims between your business and any Additional Insured.
We do not cover any damage to property (or Business Interruption), nor any claim made against your business, that is caused by pollution, asbestos, or a nuclear event. Pollution means damage caused by the spreading or escape or presence of any contaminant (whether it is solid, liquid or gas), including chemicals and waste. Asbestos means the presence or escape of any asbestos at all. Nuclear means nuclear reaction or radiation or radioactive contamination, however caused.
For property claims, we do not cover, (i) lost or misplaced property, money, securities, or stock certificates; (ii) any property that is illegal or damaged during illegal transportation; (iii) land or water or things growing on or in them like crops; (iv) animals; or (v); any costs or damage to property caused by a law or ordinance or other legal requirement, which includes any zoning change or government action. We also do not cover (i) ordinary wear and tear; or (ii) deterioration that happens because the property is old or not maintained properly, or (iii) equipment, machinery, or listed vehicles that stop working without being involved in an accident as these are not occurrences.
For liability claims, we do not cover claims based on (i) damage or occurrences that were expected or intended (in other words, it was not accidental); (ii) a contract; (iii) warranty claims, or (iv) any promise of financial performance or return.
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Deductibles and Limits:
Except for workers’ compensation, which is governed by your business’ state’s laws, your business will be responsible for a portion of each loss, commonly known as a deductible, and we will be responsible for the amounts of loss above the deductible, up to the limit of what we will pay under this policy. The type of loss will determine how much the deductible will be, and when it is paid. The amounts of the deductible for each loss are listed on the Summary. For liability claims, we will pay the deductible portion and bill your business for it later, since we need to appoint counsel right away in order to protect your business.
Except for the workers’ compensation insurance, which is governed by your business’ state’s laws,there are limits to how much we will pay under this policy. Listed separately on the Summary is the most we will pay for (i) any one occurrence to your business’ buildings, (ii) any one occurrence to your business’ property (other than buildings and listed vehicles); (iii) net income and business interruption expenses ; (iv) any one liability occurrence and in aggregate for any and all liability occurrences; (v) for the repair (and any related expenses) of listed vehicles; (vi) any one occurrence for liability arising from accidents in which listed vehicles are involved, and (vii) for cyber incident services for any one occurrence involving data breaches or hacking of computer systems.
What Your Business Needs To Do:
You expect us to be fair in meeting your business’ needs. For us to best meet our responsibilities under this policy, we need your business to meet certain requirements as well. First, we need openness and honesty about all the information provided to us in connection with this policy. We will rely upon that information to give a premium estimate, and we also use it to protect ourselves in the event of fraud or efforts to abuse our policy and the promises we make in it.
Second, we need your business to report to us as quickly as possible about anything that could give rise to claims, and cooperate with our requests. We ask that your business take all reasonable steps to protect itself and its property after a loss. Your business must file a police report following a theft. If you have any questions or concerns, the earlier you report to us, the faster we can act to cover your business. We may need to ask additional questions to process claims, and your business must answer those promptly and truthfully. After your business reports a claim to us, we will promptly investigate, and will promptly pay claims when liability has become clear and your business has provided us with proof of loss. Your business cannot give up claims it might have against others for the losses covered by this policy without our permission.
Third, keep us updated. If any of the information given to us changes, such as adding a new property to the business, let us know so that we can keep our records up to date. Some information we may seek to confirm in any event. For example, after this policy expires, we will likely ask for confirmation of payroll so we can confirm workers’ compensation data. For this and any other information requests relating to this insurance, we will be relying on your business to provide accurate information. These requests may include audits of books or physical inspection of your business’ operations. We will also use the information to adjust the premium (up or down) so it accurately reflects your business’ risks. All premium for this policy will be determined by our manuals of rules, rates, rating plans and classifications. We may change our manuals and apply the changes to this policy if authorized by law or a governmental agency regulating this insurance.
If your business does not meet its obligations to us, your business may lose some or all coverage under this policy.