Related Practices
Do Not Underestimate the OLLE
January 17, 2024By Kristin Cummings and Kiri Deonarine
To read the full article in PDF format, please click here.
The Occurrence Limit of Liability Endorsement (“OLLE” and pronounced “Ollie”) is a hot topic right now in property insurance law as it is being included with increasing frequency in property insurance policies, and many insureds seemingly do not understand how it impacts coverage. Ultimately, many courts that have interpreted OLLEs have held that an OLLE, together with a statement of values (“SOV”) can turn a “blanket” policy, with an overall limit available across multiple items and multiple locations into a “scheduled” policy, which limits recovery for each location (and/or item) to the stated value in the SOV the value of the property the insured reported to the insurer.
By requiring an insured to accurately report the value of covered property, insurers can appropriately assess risk and determine premiums, resulting in a more stable insurance market for all. However, whether an insured (1) fails to read an OLLE in a policy at the time of purchase or (2) intentionally purchases scheduled coverage for lower premiums planning to argue for blanket coverage in the event of a loss, underreporting values in an SOV can have significant consequences. If the insured does not suffer a loss during the policy period, it is possible that the only effect of the insured’s sloppy (or dishonest) valuation and underreporting is that the insurer collects less premium than it would if the values were properly reported. But, if the insured suffers a loss, the insured’s underreporting can significantly limit the amount it can recover under the policy. Acknowledging the existence and application of an OLLE on the front end leads to transparency for all involved.
Read more articles from The Zelle Lonestar Lowdown here.
