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August 2012

Aug 01
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DUI – THE TICKET IS ONLY THE START

By Personal Perspective

It begins innocently enough. A hard day at work. A stop to relax on the way home with friends. A couple of drinks. Then the drive home – but you never get there.

Every year police arrest more than 1 million people for driving under the influence (DUI). If all they get is a ticket, they’re lucky. According to the National Highway Traffic Safety Administration (NHTSA), 10,228 Americans died in drunk driving accidents during 2010 (accounting for 31% of all traffic fatalities in that year). The good news: Annual drunk-driving fatalities have fallen by more than half from 21,113 in 1982, the year that NHTSA began keeping statistics). Thousands more suffered injuries – some permanently disabling.

That’s quite a price to pay for a few drinks. However, many drunk drivers were “fortunate” enough to only get a ticket. No problem? That seems to be what thousands of repeat offenders think. Instead of thanking their lucky stars that they caught a break and swearing never to put themselves behind the wheel after drinking again, they go right back to their old habits.

That’s one reason more and more states are increasing the penalties for DUI, regardless of whether there was an accident. These include higher fines, loss of driving privileges, mandatory attendance at alcohol-treatment programs, and/or jail time. All of these penalties usually increase with each offense. We’d be more than happy to explain to you, and your kids, that with the first DUI you can start kissing reasonable Auto insurance premiums (and possibly your ability to get a policy at all) goodbye.

Why take the chance? Preserve your life, limbs, loved ones, driving record, and insurance affordability by being a smart driver. If you’re going to drink, take a cab home, or have a designated driver. Set a limit of how much you’ll imbibe and stick to it — or attend alcohol-free social events.

A word to the wise.

Aug 01
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DEDUCING DEDUCTIBLES? ELEMENTARY, MY DEAR WATSON!

By Personal Perspective

To determine the deductible that provides the greatest value for your insurance dollar, we believe Sherlock Holmes might have made a great insurance agent. Although insurance can sometimes seem complicated, choosing the best deductible for your personal situation can prove an elementary decision.

Deductibles serve a clear purpose. For a given loss, the deductible is the amount you pay out of pocket. The insurance coverage will pay the remainder of the covered loss, up to the available policy amounts. Using deductibles properly can reduce premiums by eliminating smaller claims that most people would never expect their policy to pay anyway. This keeps coverage available as your safety net for large, possibly catastrophic, claims.

How do you decide what’s “small.” How much would you be willing to pay in the event of a claim; and at what point would you want insurance to take over? For some policyholders, especially in tough economic circumstances, this “out-of-pocket” amount might be very small. Recognizing this, the usual Homeowners insurance deductible for many years has been between $250 and $500. The same amounts hold true for Auto insurance.

However, suppose you feel you could comfortably handle a $1,000 or $2,500 deductible? Paying losses lower than those amounts will reduce your premiums — but by how much? Will it put enough money back in your pocket today to make it worthwhile if you file a claim tomorrow?

Before you decide, let us show you what the savings would be. Give our agency a call about your deductibles. If you’re willing to take on a bit more risk today, we can put some money back in your pocket. As Holmes might have said, “It’s a simple premium deduction, dear boy.”

Aug 01
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THE ADA – ARE YOU UP TO DATE?

By Business Protection Bulletin

Although you’re aware of the Americans with Disabilities Act (ADA), you might not understand how to implement it in your small business. The Equal Employment Opportunity Commission (EEOC) can help. The Americans with Disabilities Act: A Primer for Small Business outlines the provisions of the ADA and provides valuable examples, tips, and caveats:

This EEOC publication covers:

  • Who’s protected by Title I of the ADA.
  • How to make ADA services accessible.
  • The use of tax credits and deductions to offset specific costs.
  • How to avoid mistakes when interviewing applicants with disabilities.
  • What questions you’re permitted to ask employees about a medical condition.
  • What to do if safety issues arise.
  • Various aspects of reasonable accommodations requirements.
  • Tax incentives for businesses that hire and retain people with disabilities.

If you provide goods and services to the public, check out the ADA Guide for Small Businesses, a 15-page illustrated guide that presents an overview of some basic requirements for small businesses. It provides guidance on how to make these services accessible and use tax credits and deductions to offset specific costs. You can access the guide at ADA Guide for Small Businesses (HTML) or ADA Guide for Small Businesses (PDF). Spanish, Cambodian, Chinese, Hmong, Japanese, Korean, Laotian, Tagalog and Vietnamese editions are available from the ADA Information Line: (800) 514 -0301 (voice) or (800) 514-0383 (TTY).

Reading up on the ADA can help you avoid costly lawsuits. Get smart on the law — and call us to make sure you have the coverage you need to protect your business against this risk.

Aug 01
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CYBER PRIVACY LIABILITY COVERAGE: A GROWING NEED

By Business Protection Bulletin

In today’s high-tech world, individuals can carry thousands of client files on flash drives in their pockets or purses. People are conducting business on the go and sensitive information is accessible at the click of a button. Managers are using their laptops or tablets through “hot spots” at local coffee shops to access customer databases. Healthcare professionals shopping at supermarkets can get patient files on their smartphones.

If you think of information security breaches primarily in terms of malicious hackers cracking the networks of big corporations from thousands of miles away, think again.

The hacking of such corporate giants as Global Payments, Epsilon, and Sony prove that size and sophistication can’t stop data thieves. However any company that stores customer information in electronic format is vulnerable to cyber privacy liability exposures than can cost megabucks – or even put a firm out of business – which means they need insurance against these risks.

Cyber Liability coverage can protect your business against breaches of privacy from unauthorized access, physical taking, or the mysterious disappearance of confidential information that leads to third-party losses resulting from identity theft. Depending on your needs, the policy can also provide a variety of coverages, such as Business Interruption, Cyber Extortion, and Systems and Data Recovery. Other options can cover the cost of contacting those affected by the data breach, computer forensics to analyze the breach, fines and penalties, potential HIPAA (client medical records) exposures, and online activities on your company site.

The development and expansion of Cyber Liability coverage during the past two decades has paralleled the explosive growth of computer technology: Today’s policies are increasingly comprehensive – and inexpensive.

CYBER LIABILITY: SEVEN KEY ISSUES

Before writing Cyber Liability coverage on your company, insurance underwriters will need to know:

  1. Your type of business.
  2. Your annual revenues.
  3. The number of payment card transactions you process each year.
  4. The number of records with sensitive client information stored on your database(s).
  5. Your compliance with payment card industry (PCI) standards.
  6. Whether, and to what extent, you have encrypted your company’s mobile devices.
  7. Whether you have suffered losses from cyber data violations during the past five years.

Contact us for a complimentary review of the cyber liability risks your business faces — and a coverage program tailored to deal with these exposures.

Aug 01
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SET THE RIGHT VALUE ON YOUR ELECTRONIC DEVICES

By Business Protection Bulletin

If your business property is lost, damaged or destroyed, insurance will pay the fair value of the item. Usually, this is relatively straightforward: You determine the replacement cost or current actual cash value, and the adjuster approves a settlement.

However, for certain types of property, the valuation process gets a bit murkier, especially for computers and other electronic devices (such as smartphones). These sophisticated high-tech items are portable and at high risk for loss or damage. For years, the cliche about buying a new car was that it lost a fourth of its value as soon as you drove it off the lot. High-tech devices can make new cars seem like wise investments. When you replace a laptop, tablet, or smartphone, it’s hard to calculate the value of a similar device bought two years ago because a more powerful, less expensive version has probably replaced it.

To value such items accurately for insurance purposes if they’re lost, severely damaged or destroyed, you have three main choices: In the unlikely event that you want to replace the insured property with exactly the same equipment, the cost would be far less than you paid originally. The cost to replace the devices with new equipment of equal capacity, speed, etc. would be higher, but still far less than the original cost of the old devices, due to advances in technology. You might decide you want the best equipment you can buy for the same price you paid originally. Although the “replacement” values remain the same, the new devices would be far more powerful and advanced.

Depending on your decision, the amount of coverage you need will vary and your policy(ies) might require modification.

Our business property specialists offer a valuable resource. They can help you value your current stock of high-tech devices, plan for replacing lost, damaged, or destroyed devices, and guide you in choosing the right policy and coverages – to make sure that your insurance doesn’t become obsolete as fast as your computers.

Aug 01
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‘IMPAIRED PROPERTY’ CAN IMPAIR YOUR COVERAGE

By Construction Insurance Bulletin

You buy Commercial Liability insurance to help protect yourself against regularly occurring events that might strike your business. A client slipping on your steps, an accident involving your vehicle or equipment – these are the types of accidents you hope to avoid and for which insurance can help cushion the blow if the worst happens.

However, your business also operates under certain assumptions; for example, that your work will be done correctly and your products will perform as expected. If either of these is untrue, you’ll create unhappy customers who will either want their money back or seek remedial action. Even though you haven’t injured or damaged their property, they’re just plain unhappy with your business.

Your Liability policy refers to such situations as “impaired property claims” and does not cover them.

For example, if an air conditioning repair service claimed to have finished its task for a client but mistakenly used the wrong part, the client might demand that the contractor come back and do the job right. If there’s no injury beyond the contractor failing to fulfill the original agreement, and everything can be put right by replacing the wrong part with the correct one, the air conditioner would be considered “impaired property” – and a Liability policy wouldn’t pay the additional costs of redoing the repair.

On the other hand, if the faulty part had damaged the air conditioner or dwelling (perhaps shorting out and starting a fire), Liability insurance would cover the resulting property damage claim.

Situations like this reinforce the need to provide ongoing risk management and skills training for your employees. For more information on protecting your business from loss, give us a call.

Aug 01
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LIABILITY INSURANCE: DON’T LET ‘SEVERABILITY OF INTERESTS’ MAKE YOU CROSS

By Construction Insurance Bulletin

Let’s say a general contractor or owner/developer asks you for a “cross liability” endorsement, but you can’t find this provision in the policy itself or as an endorsement. Should you be worried?

Probably not. Standard Liability coverage includes a cross-liability provision known as a “Separation of Insureds” agreement, with language that reads something like this: “Every insured claimed against under this policy will be treated, at the time of the claim, as if they were the only insured under the policy.” This clause essentially allows one party that the policy covers (for example, the general contractor) to sue a second party covered in the same policy (you). In this case, the GC is asking to be added to your Liability coverage – while reserving the right to sue you.

If the GC sues you, under the cross-liability provision you’ll be treated as if you’re the only insured under your policy: The insured status of the party suing you is irrelevant.

The Cross Liability endorsement provides an excellent example of the extensive coverage that makes your Liability policy such a valuable resource for protecting the financial assets of your business.

If you have any questions about your coverage, please feel free to get in touch with us.

Aug 01
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IS THAT CONTRACT INSURED?

By Construction Insurance Bulletin

To be in business means to sign contracts – and every one of those contracts requires that you agree to provide some guarantee. A common question is “will my insurance back me up on those guarantees?”

The answer can be complicated. For one thing, it’s essential to determine if the contract is one of the types that your Liability coverage specifies as an “insured contract.” Although other policy provisions can also apply (such as exclusions and limitations), if a particular contract isn’t considered an “insured contract,” look no further – your policy won’t apply.

Standard Commercial Liability policies usually define “insured contracts” to include:

  • Leases.
  • Sidetrack agreements (made with a railroad if you have tracks crossing your property).
  • Easement or license agreements.
  • Obligations required by ordinance to indemnify a municipality.
  • Elevator maintenance agreements.

Almost all Liability policies also include a broader provision that covers contracts under which your businesses assume the “tort liability” of another party for bodily injury or property damage. “Tort liability” is defined as liability that would exist in the absence of a contract or agreement. In other words, the liability you’re assuming must arise from the negligence of the other party to the contract. If the injured person can sue this other party without reference to any contract or agreement (“tort liability”), then a contract under which your business agrees to assume this liability will be considered “insured.”

Although it’s important, the definition of “insured contract” is only the starting point for determining if Liability coverage applies. Instead of assuming that your policy covers your contractual agreements, give one of our specialists a call. We can review the specific provisions of your current coverage as they might apply to your proposed contract and advise you about possible gaps.

Aug 01
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TAKE A WORKERS COMP SHORTCUT – AND WIND UP IN COURT

By Workplace Safety

Employers are often tempted to cut corners in lowering Workers Compensation costs. We’re here to tell you that these shortcuts only lead to legal headaches.

For example, when an employer decides to declare certain employees independent contractors, and thus exempt from Workers Comp requirements, the usual process is to terminate the employees, have them purchase their own insurance, and bring them back onto the job as independent contractors.

However, such arrangements eliminate one of the key advantages of Workers Compensation laws for an employer: The limitation on the right of an injured worker to sue the business. In other words, if the injured person is an independent contractor, they’ll receive no Workers Comp benefits – which means there’s no limit on their ability to sue your company for whatever damages the court might award! Even if you win the case, defending it will cost you time, money, and grief.

When you, as an employer, choose to use an independent contractor instead of an employee in the workplace, be aware that you’re trading immediate and limited savings on your Workers Comp premium for exposure to unlimited legal damages and other hassles.

Think about it, and give us a call whenever it’s convenient to discuss your options.

Aug 01
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HELP KEEP YOUR WORKPLACE FIREPROOF

By Workplace Safety

On an average day, there are more than 200 workplace fires in the U.S. These mishaps kill hundreds of workers a year, injure thousands more, and cost American businesses billions in damage and lost productivity.

An effective workplace fire prevention program should include these 10 essential elements:

  1. Inspect all areas of your workplace for fire hazards on a regular basis. Pay particular attention to areas where fires are most likely to occur. More than half of industrial fires break out in everyday workspaces, while a high percentage start in storage areas.
  2. Educate employees about fire hazards. Use bulletin boards, memos, and safety meetings to distribute fire prevention information. Update your training whenever new equipment or processes introduce new hazards.
  3. Have the right fire extinguishers. Have maintenance check extinguishers throughout your facility regularly to make sure they’re properly charged. If you expect employees to use extinguishers, OSHA requires that you train them to handle an extinguisher effectively.
  4. Store materials safely. Keep storage areas well ventilated and free of ignition sources. Be especially careful with flammables.
  5. Dispose of wastes promptly and correctly. Don’t allow combustible waste materials to accumulate. When disposing of other materials, consider the ease of ignition; For example, be sure to dispose of oily rags in closed metal containers.
  6. Emphasize good housekeeping. Ensure that all work areas are clean and free of fire hazards.
  7. Make sure ventilation systems operate effectively to remove flammable vapors, gases, and combustible dust.
  8. Service machines regularly. Set up and enforce an effective maintenance schedule. Pay attention to electrical safety. Check circuits, outlets, wires, and plugs regularly. If you allow employees to use coffeemakers, fans, and other appliances, require them to do so safely and turn off these devices at the end of the shift.
  9. Enforce fire safety rules to make sure that all employees follow these precautions.

We’d be happy to offer a complimentary review of your company’s fire safety program. Just give us a call.

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