Are you Covered or out in the Cold?

Date Published: 
Original Author: 
George Oberg
Original Publication: 
NAC Sales Management Binder - Speeches

Coverage on property consisting of building and contents:

Basic coverage reimburses for loss by fire, lightning and the hazards of extended coverages.  Extended coverages protects against loss by windstorm, cyclone, tornado, hail, riot, strike, civil commotion, damage by falling aircraft and parts thereof, sudden and accidental smoke damage from any stationary heating unit, explosion other than boiler explosion.
To these coverages can be added additional protection against loss by vandalism and malicious mischief.

On buildings only the insurance can be extended to provide all risks of physical loss coverage. This all risks protection excludes damage by:

1.    Earth movement which would include earthquakes, landslides, mud flow, earth sinking, earth rising, or earth shifting.
2.    Flood, surface water, waves, tidal water, overflow of streams or other bodies of waters, backup of water through sewers and drains, water below the surface of the ground.
3.    Wear, tear, deterioration, rust or corrosion, mold, wet or dry rot defects, smog, smoke, vapor or gas from agricultural or industrial operation.
4.    Animals, birds, vermin, termites, or other insects.
5.    Explosion of steam boilers.

As respects buildings only coverage can be provided for replacement cost.  This means that in the event of an insured loss repairs or replacement will be made without depreciation being taken. To properly insure for replacement cost, amount of insurance must be equal to the present day replacement cost of building - no depreciation being taken for age of property.

CONTENTS - of building includes office furniture, mixtures, machinery, equipment, supplies, records, etc.

Coverage on contents is normally fire, lightning and extended coverages, vandalism and malicious mischief. This can be extended to include Optional Perils protection which covers against loss by:

1.    Falling objects when damage is first sustained to the building.
2.    Weight of ice, snow, or sleet damage to the contents of the building which causes damage to the contents of the building.
3.    Accidental discharge or leakage of water or steam within a heating, plumbing, or air-conditioning system.
4.    Collapse of building.

Outdoor signs must be specifically insured, as they are not considered contents.
As respects the aforementioned coverages, protection afforded for windstorm, hurricane and earthquake varies in each state.

Each building and contents thereof must be specifically insured with an amount of insurance applying to each building and the contents of each building, unless the fire rate published by the Inspection and Rating Bureau is average rated. Average rated risks cover all building and contents thereof on the cemetery property. When equipment or contents values are moved from one building to another during the course of a year, it is best that an average rate be secured, as this provides for movement of machinery and equipment or fixtures regardless of which building they are in at time of insured loss.

Co-insurance clauses of either, 80%, 90% or 100% apply on all of these coverages.  To secure the proper amount of insurance the value is not arrived at by using your book figures. For insurance purposes the value is arrived at by taking present day replacement cost on buildings and depreciating (this can not be done on replacement cost coverage) at the rate of 1% for each year since built, but no more than 50% depreciation. On contents, whether of value or not to the owner, on an insurance claim everything on the premises has value.  Contents valuation is arrived at by securing present day replacement cost of like, kind, quality and age.  To ascertain proper values it is best to have an appraisal made by a certified appraisal firm. These appraisals can be secured at a reduced cost through your insurance broker or agent if he belongs to his local Board of Underwriters.


This covers written, printed or otherwise inscribed documents and records, including books, maps, films, drawings, abstracts, deeds, mortgages and manuscripts.

The coverage of this contract is against all risks of physical loss with the following claims being excluded from policy coverage:

Wear, tear, gradual deterioration, vermin or inherent vice; war risks and atomic fission: loss due to any dishonest fraudulent or criminal act by any insured whether acting alone or in collusion with others; loss to unscheduled property if such property cannot be replaced with other of like, kind and quality; loss to property held as samples or for sale or for delivery after sale.

This contract agrees to pay in the event of loss the actual cost of reproducing or replacing the damaged documents. Such property may be owned by the assured or held by him in any capacity provided the insurance applies only to the interest of the assured including his liability to others.

Under Contents Coverage, Valuable Papers and Records are insured but only to the extent that it would reimburse for cost of the paper on which these records would be reproduced. Under the specific policy providing coverage on valuable papers and records there would be included the expense of additional payroll necessary to reconstruct the damaged or lost records, or the services of an outside firm if this would be necessary to contact and secure from others such as customer's, their portion of the contract with the cemetery for reconstruction of cemetery records.


Coverage of this contract is identical to that of the valuable papers. This policy reimburses for any necessary expense incurred for the reconstruction of accounts receivable, interest charges to offset impaired collections pending repayment of such sums made uncollectable by such loss; collection expense in excess of normal collection cost; other expenses when reasonably incurred for re-establishing records.


All risks of physical loss protection can be written to cover Fine Arts of a cemetery. Property that would consist of Fine Arts and could be insured under this contract would be paintings, etchings, pictures, tapestries, art glass windows and other bona fide works of art, such as valuable rugs, statuary, marbles, bronzes, antique furniture, rare books, antique silver, manuscripts, porcelains, rare glass and bric-a-brac. On this contract each item insured must have a specific amount of insurance. The all risks of physical loss claims would not include damage by:
1.    Wear and tear, gradual deterioration, moths, vermin, inherent vice, damage sustained due to and resulting from any repairing, restoration, or retouching process.
2.    The acts of war.
3.    Damage caused by atomic fission or radioactive force.

To provide coverage against breakage from any cause whatsoever, these contracts must have an additional endorsement attached providing this coverage.


Under this coverage this insurance applies to any steam boiler, electric steam generator, hot water boiler, fired water heater or fired pressure vessel, including as part thereof (1) any steel economizer used solely with such vessel, (2) any indirect water heater used for hot water supply services which is directly in the water circulating system of such vessel and which does not form a part of the water storage tank and (3) any piping on the premises of the insured or between parts of said premises with valves, fittings, traps, and separators thereon, which contains steam or condensate thereof generated in whole or in part in such vessel and any feed water piping between such vessel and its feed pump or injector. Under boiler explosion the coverage applies to an accident which means a sudden and accidental breakdown of the object insured, or a part thereof, which manifests itself at the time of its occurrence by physical damage to the object that necessitates repair or replacement of the object or parts thereof. In payment of claim under this coverage, the payment is made as follows:

1.    Repairs or replacement to the damaged object.
2.    Reimbursement for repairs or replacement to the insured's building and contents thereof.
3.    Damage to property of others.
4.    Personal injury or death claims sustained by members of the public.

On # 3 and # 4 claims, if the limit of liability under the boiler explosion has been used, this protection would then automatically come under the general public liability and property damage insurance carried on the operation of the cemetery business.

Insurance can be purchased to provide reimbursement for loss of income or necessary extra expense incurred for the operations of the business which is caused because of damage or loss to property under an insured peril of the original contract applying to buildings. This also reimburses for cost in excess of the normal cost of repairs to the damages property for expediting repairs or replacement. Under the cemetery operation extra expense incurred in obtaining property for temporary use during the period of restoration necessarily required for the conduct of the business.

“Extra Expense” means the excess of the total cost during the period of restoration for the operation of the business at the location or on other premises over and above the total cost of such operation that would normally have been incurred during the same period had no loss occurred. The cost in each case to include expense of using other property or facilities of other concerns or other necessary expenses.

As respects another business conducted in the premises of the cemetery,
such as a floral shop, the company shall be liable for the actual loss sustained resulting directly from such interruption of business including reimbursement for continuation of normal charges and expenses, including payroll expenses to the extent necessary to resume operations with the same quality of service which existed immediately preceding the loss and such expenses as are necessarily incurred for the expediting, which would inc1ude overtime pay, to repair the damaged property. This coverage also reimburses for loss of income or profits during the reconstruction period.


This form of contract provides coverage for loss of money or securities due to a dishonest act of an employee. Claims involving the dishonest acts of an employee or employees must be proved by the insured as to the actual persons involved in this type of loss. This could include losses such as monies being taken on deposit, or monies taken for payment of bills which an employee would divert to his personal use; or it could involve payment of nonexisting bills the monies of which would be diverted to the personal use of an employee.

This type of contract can also include holdup of the premises when they are open for business, holdup of a messenger carrying securities or monies of the insured while away from the premises; burglary of a safe or burglary of the premises when they are closed for business.

Under the protection of burglary, reimbursement would be made for loss of stolen securities or monies, or any type of stock of merchandise and would also include payment for any damage to property caused by thieves.

This contract can also include check forgery covering outgoing as well as incoming checks.  Also included under this contract could be securities of the corporation in any safety deposit box of either a bank or a recognized safety deposit company.

This covers the legal liability of the cemetery for injury or death to members of the public which accidents occur on the insured premises, or result because of an action of an employee either on the premises or away from the premises when acting as a representative of the cemetery.

Damage to property of others is covered when the property damaged is not in the care, custody or control of the insured.

Claims that could come up on this type of insurance would be injuries incurred under the “attractive nuisance theory” which could be a pond in the cemetery property which would attract a child and because of the attraction say a youngster would drown in the pond. These claims arise regardless of the fact of whether the member of the public is legally on the property when the premises are open or illegally on the property when the premises are closed and access to the premises is made either through forcible entry or say, over a fence. This type of claim could also apply to any machinery or equipment on the insured premises that would prove to be an "attractive nuisance".

In Illinois, the term “attractive nuisance” is no longer used and the new legal term for this type of injury would be “Forseeability of Injury”. This law varies from state to state as well as the age factor on which these claims can be brought to court. In the state of Illinois these claims have been held up in court to age sixteen.

This policy provides legal fees, court fees, bond release attachment and all necessary expense incurred regardless of whether there is liability on the part of the assured or not. The insuring company provides these services as well as any inspection or investigation of righteous or fraudulent claims.

If there is an elevator or elevators in the cemetery buildings, coverage can be provided for public liability and property damage claims incurred through the operation or ownership of these elevators, as well as elevator collision protection.

This contract can also be endorsed to provide cemetery malpractice coverage which would protect on claims made by members of the public for mental anguish. A mental anguish claim could be presented in the event of some untold or unlooked for occurrence involving the casket which could possible fall or become upset and cause members of the deceased family to claim damages for the shock they received, which could probably go into a breakdown of health. This protection also provides coverage for error or mistake in the embalming, handling, disposition, burial, disinterment or removal of any deceased human body or any conduct of any memorial service by the insured even though no deceased human body actually be present or because of any injury to, destruction of, or interference with the right of burial of a deceased human body.  Coverage also pays on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of urns, caskets, linings, or fittings, casket cases, crypts mausoleums, or other facilities for the care or burial of a deceased human body belonging to others and in the care, custody or control of the insured for the purpose of burying or caring for a deceased human body.
Cemetery Malpractice Protection protects an insured cemetery against claims for injury arising out of malpractice, error or mistake on the part of cemetery personnel.

To the basic policy, can also be attached endorsement providing for personal injury coverage and will pay and defend for the named insured, any suits which are brought against the insured cemetery under the following definitions.

Personal injuries are divided into the following groups:

1.    False arrest, malice, prosecution, willful detention or imprisonment.
2.    Liable, slander, defamation of character.
3.    Invasion of privacy, wrongful eviction, wrongful entry.

Additional insurance coverages that are written for cemeteries and other businesses that are not listed or explained in the foregoing pages are as follows:

1.    Workmen's compensation and occupational diseases.
2.    Automobile insurance.