The myth of "insurance company requirements"

After reading several comments here, I was curious and looked up this issue on other web forums.
There?s a very common lament among pet owners, trying to find ?pet friendly? private RV parks and campgrounds. It is a widely held belief that these pet restrictions are the result of ?insurance company liability requirements.? This is generally not true.

Owners and management of all types of business often impose their own restrictions under the guise of ?insurance company requirements? presumably to take the heat off and avoid argument.
Ever try using a bank drive up teller on a bicycle or as a pedestrian? They won?t allow it due to their ?insurance company.?
Ever see the sign at your repair shop, ?insurance company regulations prevent you from entering the shop area.?
The list is endless and most all are fabrications.

As a risk manager for over 30 years, I checked with some of my agent/brokers who work in this area. A typical application for underwriting consideration  involves asking the RV park OWNERS if they have dogs, and if so, what breeds.
They have never heard of a coverage limitation endorsement regarding pets of guests.

With that said, there may be rare exceptions for some RV parks due to frequent loss history of pet bites which necessitate some sort of control policy as an underwriting requirement. Regardless, my contacts have never heard of a ?pet bite? exclusion becoming part of the policy negating coverage, much less certain breeds being singled out. Claims in this area are relatively rare.

Similar to the above examples, it?s less confrontational for an park owner to say, ?it?s my insurance company rule? rather than, ?it?s MY rule.?

I have seen lots of these "It's the Law" or "It's the Insurance Requirement" or some such, and in many of those cases I know the law. And I WAS an Insurance agent for a time. Several friends still are.. So I know their requirements as well.

On occasion I have made a complaint, When someone tells me "it is the law"  and I know the law and it's not,  You complain to the Bar association.. You see, when someone says "It is the law" that is legal advice, And they do not like it when people give out legal advice, even if it's wrong, without paying their dues.

What they do about it I do not know.. That long to stick around I did not have.

I basically agree with Binary Bob  that owners/employees often overstate the insurance argument, but I would like to offer a different perspective, gained from several years working in campgrounds and becoming close friends with a couple owners.

Pretty much every year the insurer sends around an inspector-type or requires that a self "risk assessment" questionnaire be filled out. It is very strongly suggested that the policy premiums as well as future renewals are contingent on doing everything possible to minimize risks (potential claims) and that giving false or erroneous answers is insurance fraud.  I've watched and listened and helped fill out assessment forms and they are more than a little intimidating. Standard questions include pet policies and procedures, recreational equipment access and use, staff training on safety procedures and medical help, fuel storage and use, etc.  I vividly recall one onsite inspector saying "I've listed this children's swing set as a risk for the past three years and it's STILL here!"  [The owner had me remove the swing set the following week.]  A bit later the inspector did an extensive write-up on the propane dispensing facility in the park, which he labeled a major risk on his report. Describing it as part of the campground business made no impression - "there are mobile propane services that will deliver to the park to meet their needs". Note the obvious attitude here: the insurer doesn't care if propane is actually dispensed in the park, they just don't want it dispensed by anyone covered under their liability policy. The park owner had the propane facility removed the following year - it was a low usage, money-losing customer service anyway, so it was sacrificed to the insurance god.

At a different park I was escorting the insurer's rep around the property and she commented that the fence around the pool was "inadequate". I replied that the 6 foot chain link fence met the county code, which I was sure of because I had shown the county inspector around the pool facility only two weeks previous and we had measured it at several points, verified gate locks, etc.    Her answer: "It's still potentially dangerous". No doubt any pool is "dangerous" from the insurer's perspective, so they do everything possible to intimidate the client into eliminating them.

Two park owners I became good friends with confided in me that they are pressured every year to make some improvement after the risk assessment, so they hold back and do just one change every year. That way they always look cooperative when the policy is reviewed. The change is often just a rule, e.g. bicycle riders in the park must wear helmets or designating a separate dog walk or play area away from general use areas.

The bottom line is that often these "insurance regulations" are a result of rate intimidation rather than a rigid requirement, but they are no less real for the business owner.

John From Detroit said:

On occasion I have made a complaint, When someone tells me "it is the law"  and I know the law and it's not,  You complain to the Bar association.. You see, when someone says "It is the law" that is legal advice, And they do not like it when people give out legal advice, even if it's wrong, without paying their dues.

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I'd love to be a fly on the wall when someone called the bar association to complain that some average Joe on the internet said something was a law and the caller knew full well that it wasn't and he was reporting Joe for giving out legal advice. I'll bet the office next door comes over to see what the laughter is all about.

When the average Joe says something, it's called an opinion. Lot's of people have them, some are good and some are bad. Mistaking an opinion for "legal advice" is a bad thing. I'm very surprised that you know the law in every jurisdiction, in every state, and in every country. That's an amazing feat. There are thousands of courts, local, state and federal with hundreds of thousands of lawyers that argue exactly what the law says. For one man to "know the law" is truly amazing. My hat's off to you...........

Ken

Something comes to mind... OSHA.. Now I realize OHSA has nothing to do with this but.. Well, they employ INSPECTORS.

So do dairy companies.  And as it happens I have some first and second hand experience with both.  (Grew up on a dairy farm).

Many times one of these inspectors will find fault with something,, So the company, or farmer or in this thread campground owner. Fixes it per the inspector's request and recommendations.

Then another inspector comes by and finds fault with EXACTLY THE SAME ISSUE, and demands that it be fixed the way it was when the first inspector showed up.

There is an OSHA rule that I know best.. This has to do with the mounting of fire extinguishers.

They have to be mounted at Eye Level.

Now, My brother does not work for OSHA (he is in fact a retired truck driver) but he's 6'6 1/2" tall, Imagine an inspector his height, or Taller (Humm, Billy King, one of my commanding officers,, Was at least that tall) He wants them moved UP to eye level.

Now imagine Rubin (one of my co-workers, formerly the smallest trooper in the department) at about Five foot Three is the next inspector......

This is why you now find extinguishers in plants and above them is a sign pointing down that says Fire Extinguisher (That way the bottle itself is eye level for Rubin and Mary (Who took the Smallest title from Rubin) and Billy (One of the tallest in the dept)  By the way... Mary is not someone I'd care to tick off,  Though she's small she'd have no problem tossing 300 pound me around like a basket ball.  And she is very well trained. (They all are).

So the insurance co "risk assessor" comes around and makes recommendations.... Many of which his company may not require at all.. Then the park owners.. Believing the assesor..  Parrot him to the park's clients.

Or thusly  goes the tail, (line from a song) er, thory.

After 30 years in the insurance business I have seen numerous occasions where the lines between , Policy Language and Company underwriting rules are very much blurred. for example,
1. If you let an unlicensed driver drive your car there is No coverage. Not sow there is nothing in the policy that says the driver must have a license. In my career I remember paying two claims regarding a 2 and 3 year old., (Mother parked on hill and left child in car for "a few seconds"  child pulled car out of gear and rolled down hill striking another car.) Thankfully in both instances the liability  and collision was paid.
Depending on the cirumstances the claim will be paid once, but the cancellation notice will get there about the same time as the check.
2. Another involves dog bites. If a company issues a homeowners policy with a bred specific exclusion they probably
could deny a claim , but if it just involves an underwriting rule they are stuck unless they can prove fraud.

3 Earley in my career I worked for a company who insured mostly Auto dealer , we gave away those "We are not allowed to loan vehicles by the dozens. Dealers loved them, it took the monkey off their back. But under the terms of the policy there is coverage. Although in some states it may be restricted to State Minimum.

This discussion is moot. If the CG owner does not want pets does it really matter if he says it is due to insurance? If the owner does not want pets that is his right! You also have a right. If you don't like the rules just try a different CG.

Interesting perspective Gary RV.
My work involves school districts, medical facilities and large non-profits. I have never consulted for an RV park, but the headaches you describe seem universal.
The brokers I consulted on this topic use a specialty market. They forwarded me a copy of the facilities questionnaire that includes questions regarding every conceivable amenity that may be part of an RV park -  from boat and jet ski rental to to propane to climbing walls to bingo parties on Sunday nights. Nothing is excluded, but everything must be disclosed for rating purposes. The incidents you describe in your post with insurance company inspectors are called ?post policy issuance underwriting? and simply should not happen. If the risks are disclosed in the application there should be no surprises later.

Granted, company inspectors try to come up with ?something? to justify their existence, but if they get all in a wad over a swing set or a pool fence (presumably one that?s not falling apart), then a meeting is necessary between underwriting and the broker.

Bottom line ? if nothing has materially changed operationally between the time of disclosure on the application and the time of the insurers inspection, the inspectors ?requirements? need intervention from someone who knows how to intervene in the silliness.

I don't have your insider knowledge, Bob, but it was my understanding these assessments were purported to affect the next year's policy/premiums and were not retroactive. In any case, the point is that RV park (and other business) owners get pressured by their insurers in various ways and not just by written underwriting rules or policy exclusions. And small business owners don't have much clout when it comes to negotiating with insurers either. They can accept the restrictions and pay the premium or they can look for another insurer, so they tend to yield to the pressures. From the business owner's perspective, he made a new rule or reduced services "because the insurance company made him do it".

Having served 31 years in the fire service and having inpsected thousands of buildings and thousands of fire extinguishers, it is important to know that I've never found ANY recommendation to mount ANY fire extinguisher at eye level.

OSHA's website https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=STANDARDS&p_id=9811 says: 1910.157(c)(1)
The employer shall provide portable fire extinguishers and shall mount, locate and identify them so that they are readily accessible to employees without subjecting the employees to possible injury.

Nothing said about eye level.

NFPA which is the code most municipalities adopt as their guiding authority says:

NFPA 10 - Standard for Portable Fire Extinguishers, 2002 Edition / Chapter 1 Administration...

1.5.10 - Fire extinguishers having a gross weight not exceeding 40 lb (18.14 kg) shall be installed so that the top of the fire extinguisher is not more than 5 ft (1.53 m) above the floor. Fire extinguishers having a gross weight greater than 40 lb (18.14 kg) (except wheeled types) shall be so installed that the top of the fire extinguisher is not more than 3 ft (1.07 m) above the floor. In no case shall the clearance between the bottom of the fire extinguisher and the floor be less than 4 in. (10.2 cm).
Source(s):
http://www.nfpa.org

So, if someone can cite me a reference for eye level I'd love to see it. OSHA and NFPA don't advocate it, probably for the exact reason John talks about, people are of different heights.

Ken

PS, when adopted by an authorized government entity adopts a code or set of codes such as NFPA standards, they
become law. I know that law......... ;-)

I have a sign in my motorcycle shop near the entrance to the service department....

It says........" For insurance reasons employees only beyond this point"

It's there for customers that go into the service department uninvited and stop production,

I will throw them out on their butts........ and they better have medical insurance.

TonyDtorch said:

I have a sign in my motorcycle shop near the entrance to the service department.... It says........" For insurance reasons employees only beyond this point" It's there for customers that go into the service department invited and stop production, I will throw them out on their butts........ and they better have medical insurance.

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Very cute.  And I'm sure you're quite smug about your little sign.

But there's no legal basis for the sign, obviously.  And you place yourself on some pretty shaky legal ground with what you say you'd do, if anyone ignores your "sign".  Can you say, "assault and battery"?  Think about it, tough guy. 

sorry my sign offends you .....(actually I'm not)

you would likely be stopped by the sign in the entrance of my shop that says.....

"We reserve the right to refuse service to anyone like you" 

Our homeowners liability insurance does have a Dog Exclusion Endorsement that specifically exclude four breeds of dogs.  Below is the wording.

"The policy does not provide for and will not cover any loss caused by any of the following breeds of dogs or dogs having any mix or portion of the following breeds whether owned by you or in your possession or control.
Excluded breeds of dogs:  Rottweiler
                                          Pit bulldog or Staffordshire terrier (or any other breed referred to as such)
                                          Chow
                                          Doberman"

Since we don't have any of these, it really hasn't made any difference.  If we wanted to have one of those breeds, we'd have to look around for different insurance.

Racklefratz said:

Very cute.  And I'm sure you're quite smug about your little sign.

But there's no legal basis for the sign, obviously.  And you place yourself on some pretty shaky legal ground with what you say you'd do, if anyone ignores your "sign".  Can you say, "assault and battery"?  Think about it, tough guy. 

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there doesn't need to be any "legal basis" for my little sign.....It's my rules, my shop, and my service department.

I'm not worried,    I've been in several good fights, and I've been stabbed, arrested, and sued before in my life......but, I'm still here  :-*

In the case of a repair shop... Insurance company regulations may say anything the insurance company wishes.

But in a shop where power tools are used, where stuff is held alof by things and can fall,  OSHA regulations may well restrict access.

And as noted the owner of the shop has the right to restrict as well.

Blaming the insurance company is often used to avoid at the scene conflict,  but there are other laws that may well restrict.

I often see signs quoting this or that law that does not exist.. But then I had access to a law library when I was working.

Many golf courses have a rule of "no coolers" or "no alcohol may be brought on premises" and they blame it on their insurance company. Fact is they obviously have Liquor Liability coverage since they have a bar/restaurant and will sell you a 6-pack for $14 to take on the course with you. Their insurance company would charge them more if they allowed outside alcohol since the course owners have less control over how much a patron drinks if he brings his own. As mentioned for other situation, is this "because of insurance company regulations"? No, it's just a cost savings for the owner and it's easy to explain this way. It is what it is.

Joezeppy said:

Many golf courses have a rule of "no coolers" or "no alcohol may be brought on premises" and they blame it on their insurance company.

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Here in Texas a sign is posted that the Texas Alcohol and Beverage (TABC) commission rules prohibit bringing coolers and alcohol on the premises where alcohol is sold. (haven't questioned their posted rule, but can't find rule in the actual TABC law).

big Larry, we have the same "dog" clause in our home owners policy.

Marsha~

That is the kind of thing I was talking about Bob,,, Stores claiming "Laws prohibit" or "Laws require" when in fact no such law exists.

Now if a store says Our Rules exceed state law in that we require........

Well, best example.... I bought a can of spray paint at a K-mart,, They insisted on my showing ID to buy it, claimed it was a state law.  Had they said Store Rule, I'd have had no complaint, but as they said State Law I reported them for practicing laws that do not exist.