Members will realize a variety of coverage changes in 2020. The MCIT Board of Directors considered recommended changes by the Governance Committee at the November board meeting. Other changes are due to conditions required by reinsurance partners.
All coverage changes become effective Jan. 1, 2020.* Additional information will be detailed in the MCIT Coverage Review webinars (see more) and the 2020 MCIT Coverage Document.
Auto Physical Damage Updates
Several changes and updates have been made to this section:
- Glass breakage: Members with comprehensive coverage still have the option of repairing damaged glass or replacing it. Because the market and cost for used glass has changed considerably, MCIT will no longer waive the deductible if a member chooses to replace damaged glass with used glass.
- Rental coverage: Coverage for transportation expenses due to the theft of a vehicle relate to the cost of a rental car; therefore, during the period in which the stolen car is missing, MCIT will pay for a rental up to a maximum of $1,500, subject to a rate of $50 per day.
- Concurrent causation exclusion: The exclusion that applies if a covered auto is damaged due to both a covered cause of loss and a noncovered cause of loss is removed.
- Attached equipment exclusion: The exclusion for “sound equipment” is replaced with one for “equipment not attached” to the covered auto. In addition, MCIT is introducing a definition of “attached equipment” to clarify which equipment is and is not covered in the event of a loss.
- Retaining a total loss auto: A new condition is added documenting the process of allowing members to retain a total-loss vehicle after an accident. When conditions are met, the member can retain the auto but future coverage is limited to liability.
Liability Exclusion for Medical Treatment
Two changes were made to this liability coverage section that clarify who is covered for medical services. MCIT does not provide medical malpractice coverage. A definition of “practitioner of the healing arts” is introduced to help clarify who is excluded from coverage.
The exclusion states that any health practitioner who is licensed to diagnose and treat physical or mental health conditions, including physicians, physician assistants, psychiatrists, advanced practice registered nurses, nurse practitioners and dentists, are excluded from coverage, and need to secure separate medical malpractice coverage outside of MCIT.
At the same time, the MCIT Coverage Document clarifies that coverage is extended to the following when not serving in a dedicated assignment to a hospital, nursing home or clinic where medical services or treatments are regularly provided: emergency medical technicians, paramedics, public safety employees, dental hygienists, registered nurses (RNs), licensed practical nurses (LPNs), public health nurses and home health aides while they are acting in the course and scope of their authorized capacities as employees, volunteers or elected or appointed officials of the member.
Coverage changes also clarify that member employees included in the group immediately described above are covered if they have a dedicated assignment to a certified Rule 29 mental health center or Rule 29 mental health clinic operated by the member.
Reduction in Margin Clause for Property
As a condition of coverage by the property reinsurer in 2020, MCIT is reducing the 150 percent margin clause on buildings, contents, property in the open, contractor’s equipment and miscellaneous personal property to 125 percent. This change is in response to the hardening of the reinsurance market, particularly for public entity pools, described in the article on page 1.
For many years, MCIT has offered this coverage extension to members as a buffer when the scheduled value of property is insufficient to repair or replace it after a loss. Instead of covering 150 percent of the property’s value, MCIT will cover up to 125 percent. Although it is still a coverage extension, it is incumbent upon members to take additional steps to ensure that scheduled values assigned to various property is as accurate as possible.
New Look, More Cyber-related Coverage
The 2020 form for cyber-coverage has a new look conforming to the reinsurer’s (Hartford Steam Boiler) updated policy language. With that comes several nice coverage extensions at no additional cost to members:
- Introduction of electronic media liability coverage: This third-party liability coverage responds to claims arising from members posting information on its website that results in unintentional defamation, violation of privacy and infringement of another’s copyright or trademark.
- Introduction of misdirected payment fraud coverage: This coverage is designed to cover claims arising from the member’s or its financial institution’s criminal deception and wrongful transfer of funds when duped by an e-mail (phishing), fax or telephone communication with the goal of diverting the member’s money. Coverage applies to the amount of money improperly transferred with an annual aggregate limit of $25,000 for counties and $10,000 for noncounty members.
- Introduction of computer fraud coverage: Basically the same coverage and limits described above when the loss of the member’s money originates from someone’s fraudulent entry into the member’s computer system, using that access to add or change data so as to send a payment to a fraudulent address.
- Deductible reduction: Noncounty members will see a reduction in their per claim deductible from $2,500 to $1,000.
- Removal of named malicious code sublimits: Coverage for first- and third-party claims arising from named malicious codes has been limited to a sublimit of coverage under the data compromise coverage. For 2020, those sublimits are eliminated, resulting in having the full coverage limit available in the event of a claim.
For more information about coverage, members should view the appropriate Coverage Review webinar. Members can contact their risk management consultant toll-free at 1.866.547.6516 with questions about MCIT coverage.