New Hampshire Liability & Casualty Insurance

Casualty insurance protects individuals and businesses from legal liability for injuries and damage to others. New Hampshire casualty law emphasizes adequate protection while maintaining the state's market-oriented approach.

Commercial General Liability (CGL) Insurance

What CGL Covers

Commercial General Liability protects businesses from:

CGL Coverage Areas

Premises Liability:

• Customer slips on wet floor
• Visitor injured on business property
• Patron hurt in store
• Guest injured at business event

Operations Liability:

• Employee damages customer property during service
• Injury caused by business operations
• Damage from business activities off-premises

Products Liability:

• Product causes injury or damage
• Defective product sold by business
• Product failure causes harm

Completed Operations:

• Injury/damage after work completed
• Construction defect claims
• Service error discovered later
• Installation failure

Exam Tip: CGL policies cover liability for bodily injury and property damage to THIRD PARTIES (others). They do NOT cover the business's own property (need commercial property) or employees (need workers' comp).

Occurrence vs. Claims-Made Policies

Occurrence Policy

How It Works:

• Covers incidents that OCCUR during policy period
• Coverage applies regardless of when claim is made
• Claim can be filed years after policy expires
• Most comprehensive coverage trigger

Example:

• Policy period: January 1, 2024 - January 1, 2025
• Incident occurs: June 15, 2024
• Claim filed: March 10, 2028 (3+ years later)
• Result: COVERED (incident occurred during policy period)

Advantages:

• Long-tail liability coverage
• No gaps if switching carriers
• Claims covered even after policy expires
• Peace of mind for retired businesses

Disadvantages:

• Higher premium (more exposure)
• Unknown future claim costs

Claims-Made Policy

How It Works:

• Covers incidents AND claims made during policy period
• Both incident and claim must occur while policy active
• Requires continuous coverage to avoid gaps
• More predictable for insurer

Example:

• Policy period: January 1, 2024 - January 1, 2025
• Incident occurs: June 15, 2024
• Claim filed: March 10, 2028 (after policy expired)
• Result: NOT COVERED (claim made after policy period)

Retroactive Date:

• Date prior to policy inception
• Covers prior acts if claim made during policy
• Must be continuously renewed with same retro date
• Protects from past unknown exposures

Extended Reporting Period (Tail Coverage):

• Purchased when policy canceled/not renewed
• Allows time to report claims for prior incidents
• Typically 1-5 years or unlimited
• Expensive (often 100-300% of annual premium)

Comparison

Exam Tip: OCCURRENCE covers incidents during the policy period regardless of when claimed. CLAIMS-MADE requires both incident and claim during policy period. Most CGL is occurrence; most professional liability is claims-made.

Workers' Compensation Insurance

New Hampshire Workers' Comp Requirements

MANDATORY Coverage:

• ALL employers with ANY employees must carry workers' comp
• Includes part-time, seasonal, temporary workers
• Even one employee triggers requirement
• No exceptions for small businesses

Excluded Workers:

• Sole proprietors (may elect coverage)
• Partners (may elect coverage)
• Corporate officers (may elect coverage)
• Certain family members working for family business
• Independent contractors (if truly independent)

What Workers' Compensation Covers

Benefits Provided:

Benefits Amounts

Medical Benefits:

• 100% of reasonable medical expenses
• No deductible or copays
• Approved medical providers
• Includes prescriptions, therapy, surgery

Temporary Total Disability (TTD):

• 60% of average weekly wage
• Maximum weekly benefit (set by state annually)
• Paid while completely unable to work
• Continues until return to work or maximum reached

Permanent Partial Disability (PPD):

• Based on impairment rating
• Schedule of losses for specific body parts
• Lump sum or weekly payments
• Does not require total disability

Death Benefits:

• Burial expenses (up to statutory maximum)
• Weekly payments to dependents
• Typically 60% of deceased's wage
• Continues for specified period or until remarriage

Workers' Comp as "Exclusive Remedy"

Trade-Off:

• Workers receive benefits WITHOUT proving fault
• Workers CANNOT sue employer for negligence
• Called "exclusive remedy" provision
• Protects employers from lawsuits

Exceptions (Can Sue):

• Employer intentionally caused injury
• Employer doesn't carry required insurance
• Injury caused by toxic substance employer knew about
• Third-party liability (sue non-employer)

Employer Responsibilities

New Hampshire Employers Must:

Penalties for Non-Compliance

Failure to Carry Workers' Comp:

• Stop-work order (business closed until compliant)
• Fines up to $2,500 per violation per day
• Personal liability for all workers' injuries
• Criminal penalties (misdemeanor or felony)
• Cannot defend against employee lawsuits

Exam Tip: New Hampshire REQUIRES workers' compensation for ALL employers with ANY employees—there is no minimum employee threshold like some states. This is MANDATORY, not optional, and penalties for non-compliance are severe.

Professional Liability Insurance

Errors & Omissions (E&O) Coverage

Who Needs Professional Liability:

• Insurance producers
• Real estate agents
• Accountants and CPAs
• Consultants
• Engineers and architects
• Medical professionals
• Attorneys
• Technology professionals

What It Covers:

• Errors in professional services
• Omissions (failure to act)
• Negligent advice or counsel
• Misrepresentation
• Breach of duty
• Legal defense costs

Insurance Producer E&O

New Hampshire Producers:

• Not legally required BUT highly recommended
• Protects from allegations of:
  • Failing to obtain adequate coverage
  • Misrepresenting policy terms
  • Failing to process applications timely
  • Errors in coverage recommendations
  • Omitting important information

Typical Coverage:

• $1 million per claim
• $1-2 million aggregate
• Claims-made form
• Defense costs in addition to limits
• Covers settlements and judgments

Common Claims Scenarios:

• Client has loss not covered—claims producer said it was
• Producer failed to obtain requested coverage
• Application errors led to coverage denial
• Failed to recommend appropriate coverage
• Missed renewal, client had lapse

Claims-Made Nature of Professional Liability

Why Claims-Made?

• Professional liability has long "tail"
• Claims can surface years after services provided
• Insurers prefer known exposure period
• More affordable than occurrence form

Maintaining Continuous Coverage:

• Keep same retroactive date
• Never let policy lapse
• Purchase tail coverage if retiring
• Notify insurer of potential claims immediately

Exam Tip: Professional liability (E&O) for insurance producers is not legally required in New Hampshire, but is HIGHLY recommended. Claims-made policies require continuous renewal with consistent retroactive date to avoid coverage gaps.

Personal Umbrella Liability

What Umbrella Covers

Excess Liability Coverage:

• Sits above underlying policies (auto, homeowners)
• Provides additional liability limits
• Broader coverage than underlying policies
• Covers gaps in underlying coverage

Typical Structure:

• $1 million, $2 million, or $5 million limits
• Requires underlying auto (100/300/100 or 250/500/100)
• Requires underlying homeowners ($300,000 or $500,000 liability)
• Relatively inexpensive ($150-300 per $1 million)

When Umbrella Applies

Scenario 1: Excess Over Underlying

• Auto liability: $250,000
• Claim: $500,000
• Auto policy pays: $250,000
• Umbrella pays: $250,000

Scenario 2: Gap Coverage

• Injury not covered by auto or homeowners
• But covered by umbrella
• Pay self-insured retention ($250-500)
• Umbrella pays remainder

Recommended For

Individuals with:

• Significant assets to protect
• Higher liability exposures (pools, trampolines, boats)
• Rental properties
• Teen drivers
• Professional reputation to protect

New Hampshire Consideration:

• Higher uninsured motorist rate
• Personal asset protection essential
• Relatively inexpensive coverage
• Covers worldwide

Commercial Auto Insurance

New Hampshire Business Vehicles

Coverage Requirements:

• Business vehicles NOT exempt from financial responsibility
• Must prove 25/50/25 ability after accidents
• Most businesses purchase commercial auto insurance
• Similar to personal auto but for business use

Commercial Auto Coverages

Hired and Non-Owned Auto Liability

Hired Auto:

• Vehicles rented/leased by business
• Short-term or long-term rentals
• Business liable for use

Non-Owned Auto:

• Employee vehicles used for business
• Employer vicarious liability
• "Running errands" for business

Why Needed:

• Protects business from employee accidents
• Covers gaps in employee personal policies
• Essential for any business where employees drive

Exam Tip: Even if a business doesn't own vehicles, it needs hired and non-owned auto liability if employees EVER drive for business purposes (even running to post office). Employer can be liable for employee accidents during business use.

New Hampshire Liability Law Concepts

Negligence

Elements Required to Prove:

1. Duty - Defendant owed duty of care to plaintiff
2. Breach - Defendant breached that duty
3. Causation - Breach caused the injury
4. Damages - Plaintiff suffered actual damages

Example:

• Store owner (duty to maintain safe premises)
• Fails to clean up spill (breach)
• Customer slips on spill (causation)
• Customer breaks hip (damages)
• Result: Negligence proven, store liable

Defenses to Liability

Common Defenses:

New Hampshire Uses:

• Modified Comparative Negligence (51% bar rule)
• Plaintiff can recover if less than 51% at fault
• Damages reduced by plaintiff's fault percentage
• If 51%+ at fault, no recovery

Example:

• Total damages: $100,000
• Plaintiff 30% at fault: Recovers $70,000
• Plaintiff 50% at fault: Recovers $50,000
• Plaintiff 51% at fault: Recovers $0

Exam Tip: New Hampshire follows modified comparative negligence with a 51% bar. Plaintiffs can recover as long as they are 50% or less at fault, with damages reduced proportionally. At 51%+ fault, they recover nothing.

Additional Casualty Coverages

Liquor Liability

For Businesses Serving Alcohol:

• Bars, restaurants, liquor stores
• Liability for serving intoxicated persons
• Injury/damage caused by intoxicated patron
• Excluded from CGL—separate policy needed

Employment Practices Liability (EPL)

Covers Claims of:

• Wrongful termination
• Discrimination
• Sexual harassment
• Hostile work environment
• Retaliation

Not Covered by CGL:

• Employee claims against employer
• Need separate EPL policy
• Claims-made form
• Increasingly important coverage

Cyber Liability

Covers:

• Data breaches
• Cyber attacks
• Privacy violations
• Network security failures
• Business interruption from cyber events
• Costs to notify affected parties

Essential For:

• Any business with customer data
• Online businesses
• Healthcare providers
• Financial institutions
• Retailers with payment cards