To: Our Valued Clients
From: Agency Name
Re: Gap Letter
From time to time, we mail a notice to our clients (past, current, and potential) called a “Gap
Letter.” The purpose of this letter is to inform you of exclusions in your insurance policies.
Exclusions are basically items that may not be covered or if covered, have a limit on the
coverage. Please find enclosed our most recent Gap Letter for personal lines coverage as well as
commercial lines coverage. After reading this letter and the enclosed Gap Letter, please contact
us immediately should you feel that any of these exclusions apply to you or your business. By
doing this, we can address the problem right away. We want for you and all of our clients to be
properly covered should a claim occur. This is VERY IMPORTANT!
(Your Agency Name if you are a member of Trusted Choice) is a full service Trusted Choice®
independent insurance agency. Our agency offers coverage for all lines of insurance including
but not limited to (list lines of coverage). If you have not reviewed your life and health insurance
needs lately, we strongly encourage you to do so soon. There is a good chance we can help you!
We sincerely appreciate your business and it is our mission to provide you with professional,
personalized customer service at a competitive price. Please contact us if you wish to address
these coverage gaps. If you are pleased with our customer service, please tell a friend! They
probably need help with their insurance as well!
Are There Gaps In Your Personal Lines Insurance Coverage?
We call your attention to the items listed below which require your immediate attention. Please
read this important document and call us at once should you have any questions regarding these
coverages.
Flood: Almost all personal lines property policies exclude flood. The only way to protect your home from
rising water is with flood insurance. There is a 30 day waiting period for flood coverage to begin. CALL US!!
Umbrella Coverage: Your homeowners and automobile policies provide a limited amount of liability
protection. However it may not be adequate in cases of catastrophic looses, such as accidental death or a crippling injury. Personal umbrella policies provide additional liability limits from one million dollars and upwards at a cost that is remarkably low. CALL US!
Valuable Items: Homeowners policies have special limits which pertain to theft of jewelry, furs, guns,
cash, stocks, bonds, stamp collections and silverware. Certain types of items – such as antiques, cameras, fine arts, musical instruments and personal computers – should be specifically insured in order for them to be fully covered. CALL US!
In-Home Business: Homeowners polices exclude or limit loses from business activities or to business
property. If you conduct a business “in whole or in part” in your home, or in another building on the premises, you need an in-home business policy. CALL US!
Auto and Homeowners Liability Limits: The limits of liability on your homeowners and automobile
policies may not be adequate if you are involved in a serious accident. You may need to review your liability limits. CALL US!
Watercraft Liability: There is limited coverage on your homeowner’s policy. This is dependent upon the
size of the boat and the horsepower of the motor. CALL US!!
ATV Liability: This applies to four wheelers, jet skis, motor scooters, etc... If you operate these types of
ATV’s off premises, you have no property or liability coverage. Coverage only applies on premises if the ATV is used for maintenance of your property. CALL US!!
Rental Reimbursement: This coverage provides you a rental car if your car is out of service due to a
covered loss. This is an optional coverage under the auto policy. CALL US!!
Renting a Car: Most policies will not cover loss of use for a rental car. Many of the contracts differ and
many have named driver endorsements. In most cases, we recommend that you buy collision damage waiver coverage from the rental company. CALL US!!
Identity Theft: Today’s criminals don’t use crowbars, they use keyboards. This new coverage helps you
Farm Land Liability: If you have a homeowner’s policy and own farmland, you most likely have no
liability coverage under your current policy for the farmland. CALL US!!
Mold: There is very limited, if any, coverage under the homeowner’s policy for mold coverage. There is
no coverage for mold under the flood policy. CALL US!!
Annuities: Some of our insurance companies offer competitive alternatives to Certificates of Deposit
offered by your bank in the form of annuities. CALL US!!
Life Insurance: Is your family protected in the event of your untimely death? We can tailor affordable
insurance packages to help your family cope with the unexpected expenses of a departed loved one, CALL US!!
Disability: Are you and your income protected in the event of a serious loss? Disability coverage
provides protection in the event of injury. This coverage is around the clock protection. CALL US!!
Uninsured Motorists and Underinsured Motorists Coverage: An umbrella policy will not give you
additional coverage in addition to your limits on your auto policy for this coverage. We recommend these limits at least match your primary liability limits. You can purchase up to $1,000,000 in coverage on both of these lines. CALL US!!
Are There Gaps In Your Commercial Lines Insurance Coverage?
We call your attention to the items listed below which require your immediate attention. Please
read this important document and call us at once should you have any questions regarding these
coverages.
Flood Insurance: Almost all commercial lines property policies exclude flood. The only way to protect
your business from rising water is with flood insurance. There is a 30 day waiting period for flood coverage to begin. CALL US!!
Umbrella Coverage: Your commercial policies provide a limited amount of liability protection.
However, it may not be adequate in cases of catastrophic losses, such as accidental death or crippling injury. A commercial umbrella policy provides additional iabili8ty limits. Limits exceeding five millions dollars are available. CALL US!
Employment Practices: Employers of all sizes face a critical issue: employees filing suit for alleged
wrongful employment practices – such as wrongful termination of employment, employment discrimination, sexual harassment, wrongful failure to employ or promote, negligent evaluations, violation of the Americans with Disability Act or the Civil Rights Act, etc. If a suit is filed – even if you’re innocent – the cost to defend yourself could endanger the survival of your business. Employment Practices Liability Insurance provides legal defense for such incidents. CALL US!
DOC (Drive Other Car): If you do not have a personal automobile policy and drive a company car
insured on a business auto policy, it is imperative that you have this coverage added to your business auto policy. This gives you personal automobile coverage when driving a vehicle belonging to others. CALL US!!
Contracted Labor: If you are giving your employees a 1099 form, they may still be covered under your
Worker’s Compensation and General Liability Policy. Unless that employee has his or her own respective policy, he or she is an employee from an insurance perspective. What your accountant is telling you may not apply to your insurance policy. North Carolina law mandates you carry Worker’s Compensation insurance if you have 3 or more employees. CALL US!!
Ghost Policy for Worker’s Compensation: This policy provides no benefit coverage for the owner of
the business. It will provide benefits for any employees, subject to audit. Be sure to notify us if you hire any employees during the policy year. Minimum premium for these policies is $850. CALL US!!
Employee Benefit Liability: This is a safeguard endorsement to protect you should you make an error in
the administration of your employee benefit program. CALL US!!
Pollution Coverage: There is very, very limited coverage under standard insurance contracts. This can be
purchased through specialty insurance carriers. CALL US!!
Business Income: After a property loss occurs, this is money that will pay for continuing expenses (rent,
Cyber Liability: Today’s criminal doesn’t use a crowbar. He or she uses a keyboard. One of your biggest
assets is the information that you keep of others. This coverage provides defense in this growing unauthorized exposure to your computer system. CALL US!!
Directors and Officers: Members of profit and not-for-profit boards can be held personally liable for
decisions that adversely affect the business entity. If you sit on any type of board of directors, you need this coverage. CALL US!!
Equipment Breakdown: This provides special coverage for perils not found under a standard property
policy. Coverages include breakdown, electrical arcing, and power surges. If you have any type of mechanical equipment, this coverage is very necessary. CALL US!!
Data Recovery: If your business suffers a loss to property, there is a limit of money to help recreate the
data lost due to the claim. CALL US!!
Electronic Data Processing (EDP): Your computer system, including both hardware and
software, has additional exposures to loss that are not covered under a standard property policy. These exposures can be insured with specified insurance on the EDP components in your office. CALL US!!
Home Business Pursuits: If you have any business operations in your home, there is very limited, if any,
coverage under a homeowners policy. There are various ways in which you can get the necessary property and liability exposures covered. CALL US!!
Hired and Non-Owned Automobile Liability: If your employees use their own personal vehicles on
business for you, this is a most important coverage. If the employee causes an accident, the employer can also be brought into a lawsuit for damages to the injured party. CALL US!!
Annuities: Some of our insurance companies offer competitive alternatives to Certificates of Deposit
offered by your bank in the form of annuities.
Key Employee Life Insurance: Your company should protect its most valuable asset—your employees!
Your company may purchase life insurance on key employees to help weather the storm after the death of that employee. CALL US!!
Long Term Care: Long term care insurance may be purchased by the company for its employees,
particularly the owners of the corporation. Furthermore, the purchase of this insurance may be tax deductible based upon the formation of the business entity. This option is particularly good for asset protection of the owners should they need around the clock care.
CALL US!!
Disability: Are you opting out the owners of your company from Worker’s Compensation? If so,
disability insurance may be a good alternative that would give around the clock protection in the event of injury. CALL US!!
Professional Liability: Malpractice is not restricted to doctors or dentists. Any professional (CPA,
Employee Dishonesty: Employees can and do steal from their employers. If convicted in a court of law
for wrongdoing, an employer can re-coup its losses with this very important coverage. It is often the most-trusted employee that causes these kinds of claims. CALL US!!
Mold Exclusions: Mold and Fungus losses have proliferated in the construction industry over the past
few years. These losses are NOT covered under standard General Liability policies! The coverage can be purchased. CALL US!!
Claims Made V. Occurrence: General Liability policies are written two different ways: claims made and
occurrence. The occurrence policy provides coverage when the event occurs. The claims made policy provides coverage when the claim is reported. Often there is a time delay between an “occurrence” and when the “claim is made.” It is very important to review this discrepancy when changing carriers, especially when the previous policy is “claims made.” CALL US!!
