760 



HORTICULTURE 



HOW MUCH INSURANCE MONEY 

 IS WASTED. 



lieiiders of these ankles know that 

 from time to time I break out with 

 something about the great need of 

 knov.'ing the provisions of an insur- 

 ance policy and following them. As a 

 matter of fact, these outbreaks aro 

 practically all aroused by cases whirh 

 have been brought to me, whenin 

 somebody has failed in his duty, and is 

 confronting a loss in consequence. It 

 seems so exceedingly plain that any 

 business man paying good money tor 

 Insurance should know enough to be 

 able to realize upon his investment, if 

 the occasion arises, that I cannot get 

 it through my head that there is the 

 slightest excuse when these things 

 happen. 



One of the most expensive forms of 

 Insurance is indemnity insurance, 

 such as is carried by firms using de- 

 livery wagons, more particularly mo- 

 tor delivery wagons. It is astounding 

 how many men carrying this form of 

 insurance fail to comply with the in- 

 variable provision that the company 

 must be immediately notified of the 

 accident if there is one. Every indem- 

 nity insurance policy contains this 

 provision, usually in the following lan- 

 guage: 



tipon the occurrence of au accident the 

 assured shall give Immediate notice In 

 writlne of such accident, with the fullest 

 Information then available, to the Company 



at Its head office In . If a claim Is 



made on account of such accident, the as- 

 sured shall give like notice thereof with 

 full particulars. 



I was sitting in the office of another 

 attorney only yesterday when a client 

 of his — a large wholesale house— tele- 

 phoned in about a suit that had appar- 

 ently just been begun against it. The 

 attorney was inquiring about the facts 

 and after listening for a time said 

 this, which tells the story of another 

 case precisely like those I am discuss- 

 ing: "Did you notify your insurance 

 company when you first heard about 

 the accident?" * * * Well, then, 

 your chance is gone. You're too late 

 now. Didn't you know the policy said 

 the company should be notified right 

 away?" • * * "Well, too bad, but 

 you'll have to stand the brunt of it 

 yourself now." 



It was really that which inspired me 

 to write this article, coupled with the 

 fact than an appeal court about the 

 same time handed down a decision In 

 a case of exactly the same kind. In 

 that case the court applied the above 

 provision of an indemnity insurance 

 policy, which is in practically general 

 use throughout the entire United 

 States. One of the delivery teams of 

 a business house had run down and 

 killed a 3-year-old child. The parents 

 sued the driver's employer and recov- 

 ered heavy damages, about $2,600. 



June S, 1916 



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The employer in turn sued the insur- 

 ance company in which he had an in- 

 demnity policy, to recover the above 

 amount, the company having refused 

 to pay because it was not notified of 

 the accident when the policy said it 

 should be. 



I reproduce the following from the 

 court's decision, upholding the insur- 

 ance company in refusing to pay: 



On October SOtli. a throc-ycar-old child 

 was accidentally injured hy one of the lu- 

 surcd teams, which was In charge of its 

 driver. The fact of the accident was known 

 the same day, liy the Immediate superior 

 oi the driver, a Mr. Clark, who represented 

 the Insured in the county where the acci- 

 dent occurred. On January 27th, nearly 

 three months after the date of the accident, 

 the insured was notllied l>y a firm of law- 

 yers that a claim for damages rcsuUIng 

 from the accident had heen placed in their 

 hands. On April Ist. an action to recover 

 was conmmenced. and the summons was 

 served on Mr. Clark, the insured's repre- 

 sentative, on April 7th. It was not until 

 April 20th that the plaintiff gave to the 

 defendant, at its head office, any Informa- 

 tion concerning the accident which had oc- 

 curred on October 30th of the year l>efore. 

 or as to the claim made therefor by the at- 

 torneys in January. Consul f()r appellant 

 contends that this was not Immediate no- 

 tice, such aa was plainly reiiuired liy the 

 contract. We think his contention is well 

 founded. The provisions regarding the 

 giving of notice to insurance couip.-inies 

 upon the happening of an accident are valid 

 and of the essence of the contract, being 

 designed to enable the company to In- 

 vestigate the circumstances of the acci- 

 dent while the matter Is yet fresh In 

 the minds of all. and to make timely de- 

 fense against any claim filed. It was the 

 plain duty of plalntilT to report the accident 

 ts soon as it had knowledge of its occur- 

 rence. 



So that the business house in ques- 

 tion was obliged to pay out probably 

 $3,000, counting attorney's fees and 

 costs, merely because it failed to com- 

 ply with the simple provision of its 

 policy that when an accident hap- 

 pened, the company which is supposed 

 to pay for it should be immediately 

 notified. 



There were some features in this 

 case which show how slip-ups often 

 occur in the giving of notice. It ap- 



peared that the man named in the 

 above extract from the opinion, Clark 

 had known of the accident shortly 

 after it happened, but had failed to tell 

 his employer. That often happens. 

 There should be a standing order in 

 all establishments carrying insurance 

 of this character that immediate no- 

 tice of all accidents must be given to 

 some responsible head whose business 

 it is to look after such, things. In this 

 case when Clark was asked why he 

 didn't report the accident, he said: 

 "He did not know he was supposed to, 

 and he thought nothing would come 

 of it." 



The business house in question 

 also claimed that it did give notice — 

 to the insurance company's local 

 agents. Tliis, too. often happens, al- 

 though the |)Olicy almost always pro- 

 vides that the notice must be given to 

 the company's head office, as did this 

 ixjlicy. Therefore the court said "this 

 was not in compliance with the policy, 

 either as to time or i)lace." 



(Copyright. May, 1916, by 

 Elton J. Buckley.) 



TO 

 TH 



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