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Monthly Archives

May 2013

May 01
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LIABILITY RATE HIKES: BE PREPARED!

By Construction Insurance Bulletin

Many construction businesses will be paying more for Liability coverage, as insurance companies are raising rates to make up for years of low premiums (during the so-called “soft market”). That’s the conclusion of a recent report by the U.S. Construction Practice of Marsh, the world’s largest insurance broker.

Other factors driving these increases include skyrocketing inflation of medical costs and new laws in some states expanding the coverage requirements for Liability insurance.

The Commercial General Liability (CGL) market for construction firms continues to harden, with rate increases of up to 15%. Businesses with poor loss histories are experiencing even larger hikes, and (in some cases) will not have their policies renewed. Insurance companies are also raising renewal rates by 8% to 10% on Umbrella and Excess Liability coverage.

The report found that Workers Compensation rates are rising as underwriters grapple with flat premiums and escalating medical costs. Upcoming changes to the National Council on Compensation Insurance “experience modification” calculations – which help set rates – could drive up premiums significantly.

On the other hand, Construction Insurance experts expect little change in rates for such coverages as Project-Specific General Liability, General Liability Wraps, Controlled Insurance Programs (CIPs), Builders’ Risk, Environmental Insurance, and Contractors Professional Liability.

The good news, says Michael Anderson, Leader of Marsh’s U.S. Construction Practice: “Construction firms that proactively distinguish their risk profiles from their peers are best positioned to secure more favorable terms, conditions, and pricing from underwriters.”

As professional insurance agents, we can advise you on navigating this challenging environment to obtain comprehensive, cost effective Liability coverage that can help protect your business. Just give us a call.

May 01
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CYBERCRIME: A GROWING THREAT

By Business Protection Bulletin

The more heavily your business relies on electronic technology, the greater your vulnerability to cybercriminals.

Criminal activity conducted through the Internet impacts businesses of all sizes. One study found that companies with 100 or fewer employees accounted for 72% of data breaches worldwide.

Today’s cybercrimes put your grandmothers’ spam email list to shame. According to a nationwide study by Ponemon Institute, the median annual cost of cybercrime for a large company in 2011 came to $5.9 million.

Cybercrime covers a variety of activities, from malicious codes and hacks in which private client or company information is made public or stolen, to disruption of normal operations. Perpetrators include rogue employees, “hacktivists” seeking to make a political statement, or third parties seeking financial gain.

Businesses, such as coffee shops, that allow customers on their premises to use Wi-Fi face unique risks. In one case, a Hollywood producer sued the owner of a restaurant offering Wi-Fi access after a customer used the network to download a film for bootlegging.

To help protect your business against potential losses from cybercrime, here are some recommendations:

1 – Review your specific exposures. For example, if you allow people outside the company to use your WiFi, this can increase your exposure.
2 – Focus on the human element in data security by offering employees effective training and specific guidelines.
3 – Re-evaluate your guidelines frequently.
4 – Evaluate the potential risks of adopting new technology.

Last, but not least, make sure that you carry adequate Cyber Liability Insurance.

Our agency would be happy to tailor cost-effective coverage to your needs, and help you develop and implement a comprehensive program for managing your exposure to cybercrime.

May 01
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SAFEGUARD YOUR KEY PEOPLE WITH DIRECTORS & OFFICERS INSURANCE

By Business Protection Bulletin

In today’s increasingly complex and litigious business environment, your corporate officers and board of directors – the brains of the company – need protection against personal financial liability arising from their corporate activities.

These people are highly vulnerable to lawsuits by investors, employees, vendors, competitors, customers, regulators and others, alleging misconduct for a wide variety of activities, such as:

  • Providing inaccurate or unlawful advice.
  • Fraud and malfeasance.
  • Misrepresentation of company assets.
  • Failure to comply with workplace laws.
  • Poor hiring decisions. (A Towers Perrin survey found that 40% of all reported D&O claims involved flawed employment practices.)
  • Directors & Officers Liability (D&O) Insurance will pick up the tab for legal fees, settlements, and other expenses from such litigation. This gives your officers and directors financial peace of mind in carrying out their corporate activities, and provides a valuable incentive for attracting, and keeping quality people who can help grow your business.

There’s a widespread need for this coverage. One in six company executives (17%) surveyed by Inc. Magazine believe that their business will experience a D&O-related loss within the next year.

These policies usually offer two types of coverage known as “sides.” Side A protects directors and officers from personal financial liability if the company is unable to indemnify them. (For example, during a bankruptcy or dissolution.) Side B coverage reimburses the company if it indemnifies directors and officers. (For example, when shareholders file suit against them.) A third coverage – sometimes known as Side C – comes into play when both the company and individual officers and directors face lawsuits.

To learn more about how D&O Insurance can help minimize the financial risks of litigation for your company and your top people, feel free to get in touch with us at any time.

May 01
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DON’T LET YOUR PRODUCTS DAMAGE YOUR BOTTOM LINE

By Business Protection Bulletin

Product Liability Insurance helps protect your company from damages for losses related to manufacturing or selling products or other goods.

These claims can, and do, put businesses out of business – just ask the officers of any asbestos manufacturer.

Companies are vulnerable to three types of products claims

  1. Manufacturing or production flaws that create an unsafe defect in the product. For an example, just recall the recent claims against Chinese manufacturers for using dangerous chemicals in their products.
  2. Design defects that make the product inherently unsafe. (The series of lawsuits against Toyota vehicles for defective acceleration controls during the past two years comes to mind.)
  3. Inadequate warnings or instructions, such as failing to label a product properly or advise consumers about potential risks. A famous example is the McDonald’s “hot coffee case.” Damages can include medical costs, compensatory damages, economic damages, and (in some instances) attorney fees and costs, as well as any punitive damages.

Some sellers and retailers choose not to buy Product Liability Insurance because they don’t actually “manufacture” anything. However, most states follow the “stream of commerce” model of liability, meaning that if your company sells a product, you can be held liable for damages to the end user.

“Business Owners” and Commercial General Liability policies usually include some type of Product Liability Coverage (Sometimes known as Product/Completed Operations Insurance).

Premiums are based upon the type of product and sales volume. If you try to reduce premiums by underreporting sales or insuring only a percentage of your sales, you’ll probably face a hefty “underinsurance” penalty. Make sure to identify your products properly, too. For example; if you supply stepstools, you don’t want them categorized as ladders, which have a higher premium because of their greater risk potential.

For more information, feel free to get in touch with our Business Insurance professionals.

May 01
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COMMERCIAL AUTO INSURANCE 101

By Business Protection Bulletin

Nearly six million traffic accidents occur in the U.S. every year – more than 16,000 a day (or one every 10 seconds).

If your company owns, operates, or uses motor vehicles – or if you have employees who use their cars for business purposes – you need Commercial Auto Insurance to provide financial protection against losses from mishaps that occur behind the wheel.

This valuable policy provides these coverages:

  • Bodily Injury Liability pays the cost of bodily injury to others from accidents for which you are responsible. If you’re sued, it also pays your defense and court costs.
  • Property Damage Liability picks up the tab for property damage to others for which you are responsible, as well as defense and court expenses.
  • Personal Injury/Medical Payments usually covers medical and funeral expenses for bodily injury from an accident that involves an insured vehicle.
  • Collision pays for a covered vehicle that is damaged by a collision with another vehicle or object.
  • Comprehensive Coverage pays for a covered auto that is stolen or that is damaged by causes other than collision or reckless driving.
  • Uninsured/Underinsured Motorists covers injuries and, in some cases, property damage, when you’re involved in an accident with another person who either doesn’t have Auto Insurance or carry enough coverage.
  • Before you purchase or renew your Commercial Auto Insurance ask yourself these questions: 1) how much Liability Coverage you should buy, and 2) how large of a deductible should you choose?

We’d be happy to help you choose the most cost effective policy for your needs. Just give us a call.

May 01
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THE BETTER YOUR CREDIT, THE LOWER YOUR AUTO PREMIUMS

By Personal Perspective

Your credit scores help determine what you’ll pay for an auto loan – and Auto insurance.

Studies by state regulators, universities, and independent auditors show that such credit information as how often you’ve paid a bill more than 60 days late can predict your probability of making an Auto claim and its cost. Insurance companies use this data to help set premiums.

However, one study found that 96% of Americans don’t review their credit report once a year, even when they can do so for free. According to the Federal Trade Commission, one in four consumers had errors on their reports that could affect credit scores – and 5% of these mistakes could mean that they’re paying more than they should for Auto insurance and financing.

To make sure that your credit report is accurate, improve your score, and keep your Auto premiums down, experts recommend these guidelines:

  • Order free reports from the three credit reporting agencies (Experian, TransUnion and Equifax) through AnnualCreditReport.com , one every four months. Correct any errors immediately.
  • Pay your bills on time. Payment history counts for 35% of your score.
  • Keep your credit card balances below 20% of available credit.
  • Monitor your credit history. Because credit bureaus look at how long you’ve had an open and active line of credit, the worst thing you can do for your credit score is to close credit card accounts. Not only do you lose your credit history for that card, but your overall utilization ratio goes up.
  • Don’t open new accounts in quick succession. This represents a greater risk, especially for people who don’t have a long credit history.
May 01
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ONLINE CONSUMER REVIEWS, SLAPPS – AND INSURANCE

By Personal Perspective

After a dispute with a local home contracting firm, Jane Perez of Fairfax VA posted reviews on Yelp and Angie’s List accusing the contractor of, among other things, damaging her home.

The contractor filed a $750,000 lawsuit against Perez alleging defamation. Although the suit hasn’t been settled, it serves as a valuable reminder: If you write a negative review about a business, don’t be surprised if you face a lawsuit – and make sure that your insurance protects you.

Such suits are becoming increasingly common, as people use sites such as Yelp to voice their gripes about everything from restaurants to dentists. Although many defamation lawsuits have merit, others – called “strategic lawsuits against public participations (SLAPPs) – are being filed primarily to silence consumer criticism. While some states have anti-SLAPP laws, they’re often weak, which encourages plaintiff to sue.

If you get SLAPPed, insurance might not come to the rescue. Liability coverage under the basic Homeowners policy does not pay legal costs for defending lawsuits for defamation of character, slander, and copyright violation claims. However, for a few dollars, you can purchase a Personal Injury Liability endorsement that covers these exposures. Some Umbrella Liability and high-end Homeowners policies include Personal Injury coverage.

But just because you have coverage, don’t start blogging, tweeting, and posting whatever you want. Intent matters; so if you knew what you were doing was wrong, your policy might not cover you. Although you have a legal right to share your personal experiences as a consumer, use common sense when writing reviews: Be accurate, avoid embellishment and generalizations, and describe only what you know from personal knowledge.

P.S. If you’d like to post a review of your experiences with our agency, please feel free.

May 01
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RENTERS INSURANCE: REALITY CHECK

By Personal Perspective

A recent nationwide survey found that only 34% of tenants carry a Renters policy which means that most renters are taking a financial gamble with all of their belongings.

The three leading reasons that respondents gave for not buying Renters insurance show that many people don’t understand what this policy covers – and doesn’t cover:

  1. Nearly three in five (57%) felt that their rented home has such effective security that they don’t need protection against losses from theft.
    However, without a Renters policy, tenants still remain highly vulnerable to other risks. A fire could damage or destroy their possessions, requiring replacement at a high cost. An accident might leave the unit temporarily unlivable, costing hundreds or thousands in living expenses. An injury to a visitor on the premises could result in costly medical bills – not to mention a lawsuit. The typical Contents policy will provide protection against these losses – and a wide variety of other risks.
  2. More than half (52%) believed that they couldn’t afford the coverage. Among respondents, 21% estimated the annual premium at $1,000 or higher, while another 60% pegged the cost as $250 a year or more.
    However, according to the National Association of Insurance Commissioners (NAIC), the average Renters policy costs only around $185 a year.
  3. Nearly half (48%) thought that the landlord already had coverage.
    Although the landlord carries insurance in the building itself, the policy does not cover risks to tenants’ property and liability.

For more information on how Renters insurance can protect you, feel free to get in touch with us.

May 01
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AUTO INSURANCE: SAVING $$ IN YOUR GOLDEN YEARS

By Personal Perspective

Your Auto insurance rates are based on a variety of factors such as your driving record, mileage, the car you drive and your age.

Rates are highest for drivers in their teens and early 20, tend to fall for those aged 30 to 60-something, and then start climbing again around age 70. Although drivers in this age range tend to drive less and are more mature, their vision and reflexes are declining. They’re also more likely to be injured in an accident than their younger counterparts, and to suffer more severely because they’re physically weaker. Also. They often drive smaller cars, which are more vulnerable to damage.

Here are five ways that senior drivers can keep their Auto insurance rates affordable:

  1. Update your mileage. You can get a discount of 5% to 10% if you no longer commute or drive long distances.
  2. Use a telematics device. A usage-based or pay-as-you-go Auto insurance program can reduce premiums by 5% to as much as 40%.
  3. Take a class. Most states require Auto insurers to offer “mature drivers” (who can be as young as 55) a discount of 5% to 15% for completing an accident-prevention course.
  4. Exclude a driver. In some states, you might be able to drop coverage on a driver who no longer gets behind the wheel.
  5. Make your car safer. Some insurance companies offer discounts for anti-theft devices, airbags and anti-lock brakes.

Bear in mind that drivers can use some of these methods at any age and save on Auto insurance by raising their deductible or reducing coverage.

To make sure you get the protection you need at a cost you can afford, just give us a call.

May 01
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ALZHEIMER’S: PAYING THE PRICE

By Life and Health

Alzheimer’s disease and its hefty price tag can be an increasingly scary prospect for seniors and their families.

This incurable condition affects about 5.4 million Americans, making it the nation’s sixth leading cause of death.

A recent study by the Alzheimer’s Association estimates the annual cost of the disease at nearly $57,000, 60% of which falls on the family’s shoulders. Because roughly 90% of Alzheimer’s patients are over 65, they and their families rely on Medicare and other insurance to cover costs – which means you it’s essential to understand what Medicare does and doesn’t pay for:

  • Doctor visits and other outpatient medical services are covered by Medicare Part B.
  • With traditional Medicare, patients pay 20% of the cost of outpatient visits; supplemental insurance, such as Medigap plans, can help cover this extra cost. If you have Medicare Advantage, which usually covers hospitalization, outpatient care and prescription drugs, make sure your doctors are in your insurer’s network to avoid excess costs.
  • Drugs are usually included under Medicare Part D. Make sure that insurance covers the drug(s) needed and that you know the co-payment.
  • Medicare will not cover long-term nursing home care (this often comes as an unpleasant surprise to patients and their families).
  • Medicare will pay for up to 100 days of short-term nursing care following a three-day inpatient hospital stay.
  • Medically necessary services provided in your home are sometimes covered, if they’re scheduled at least once a week and are provided by skilled healthcare workers (such as nurses or therapists).
  • Help is available. Check with the State Health Insurance Assistance Program for free and unbiased advice. The Alzheimer’s Association, the Medicare Rights Center and the Center for Medicare Advocacy all provide information about this disease and other long-term conditions.

The best defense is to understand your Health insurance benefits and prepare for the future possibility of illness. As always, we’re here to help you.

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