January 2017

In today’s high-tech world, every business depends on increasingly complex electronic and electric equipment to stay in business. But what happens when these systems break down?

Consider this nightmare scenario: You’re facing a deadline under a major contract when a voltage spike surges through your electrical lines, burning out its computers and telephone networks, and shutting down your operations. In addition to lost productivity, you’ll need to spend time and money repairing or replacing the damaged systems – not to mention the revenue you’ll lose until you can get back up to speed. The total cost could easily run into six figures.

Equipment Breakdown insurance to the rescue! “Think of this policy as Accident, Health, and Disability insurance for your equipment,” says Mark MacGougan, Assistant Vice President of The Hartford Steam Boiler Inspection and Insurance Company. The coverage, also known as Boiler & Equipment Insurance, can pick up the tab for:

• Repairs and replacement of equipment damaged due (some policies will cover green construction and disposal and recycling expenses)
• Expenses of limiting the loss or expediting the restoration process
• Income lost when a covered breakdown causes a partial or total business interruption

Many businesses carry Equipment Breakdown coverage under their Commercial Property insurance. More sophisticated operations might prefer a stand-alone policy. Some insurance companies offer such preventive services as infrared scanning technology or onsite inspections to identify maintenance needs.

The coverage you need depends on the nature and size of your operation, the exposures you face, and the type of equipment you use. As insurance professionals, we’d be happy to tailor an Equipment Breakdown policy to fit your needs, at a price you can afford.

In today’s “service economy,” more and more businesses (such as auto body shops, dry cleaners, and parking lot owners) are taking temporary responsibility for property or equipment owned by others. Loss or damage to any property under the care, custody, or control of your firm could cost thousands of dollars — unless you have Bailee insurance.

This Inland Marine policy covers the liability of a business (the “bailee”) for the property of customers under its care, custody, or control. Most Property policies don’t provide coverage for this type of exposure, unless it’s included specifically. You can also purchase Bailee insurance on a no-fault basis to protect customers’ property against any loss or damage and subsequent liability, regardless of negligence.

You should buy enough coverage to pay for the total value of other’s property that might be in your control at any one time. Many types of Bailee insurance are tailored to the specialized needs of a particular type of business (Jewelers Block policies, Furriers Block policies, etc.).

As an alternative to Bailee insurance, you can obtain coverage as part of a comprehensive Property policy that includes a “property of others” clause. We’d be happy to help you evaluate your needs and find a solution to insuring property under your care, custody, and control. Just give us a call.

Most companies insure virtually every aspect of their business. Yet, believe it or not, fewer than l0% of American businesses protect their primary source of income: their outstanding invoices or accounts receivable (A/R) – even though losses from customers failing to pay invoices are more common than those caused by fire or theft and can be equally, if not more, devastating.

The solution: Trade Credit insurance, (also known as Accounts Receivable insurance) which guarantees payment, up to the amount under the policy, of A/R owed by customers whose receivables are past due, are unable to pay or refuse to do so, or who are in default, This coverage is essential if a significant percentage of your sales are credit based and/or you sell regularly to new customers.

• By protecting you against losses from bad debts, it enables you to provide more credit to more customers – which means higher sales.

• A Trade Credit policy protects your company against the financial impact of a customer going bankrupt because the insurance company must pre-approve all orders, carrying Trade Credit coverage provides you with valuable information on the financial stability of your customers. This enables you to offer more aggressive terms and/or solicit larger orders. Trade Credit insurance allows you to increase the size of your working capital. For example, banks might be willing to lend against 90% of your receivables rather than 80%. In today’s restricted financing environment, banks will be more likely to lend to you and to offer better terms.

What’s not to like?

Our insurance professionals would be happy to offer their advice on the Trade Credit policy that’s best for your business. Please feel free to get in touch with us at any time.

It’s a tough marketplace and a rough economy. Corporations that everyone assumed were rock solid have suddenly been shown to be paper tigers. Could it happen to your insurance company? A proven way to checking out the financial health of your current or prospective insurance company is to ask for its Best’s Rating. A.M. Best Co. has been rating insurance carriers since 1899. Although there other organizations offer such ratings, Best’s is still the most widely cited.

After evaluating a company’s balance sheet strength, operating performance, and business profile, Best measures it against a series of quantitative and qualitative standards. This results in the assignment of one of two types of rating opinions: a Best’s Rating (A++ to F) or a Financial Performance Rating (9 to 1).

These ratings tell whether the carrier with which you’re dealing has the size and assets to insure your business comfortably. They also allow you to see how a particular company fits with the remainder of your protection program. For example, many Business Umbrella insurers have set a minimum Best rating requirement that must apply to any other company that provides your basic coverages.

Although a strong Best rating doesn’t guarantee an insurer’s future financial performance, it provides a benchmark that policyholders can use to determine whether they’re dealing with a carrier who’s likely to be there at the time of a claim. For more information about Best’s rating system, go to www.ambest.com.

To learn how A.M. Best and other rating organizations rank the companies that insure you, and the implications of these ratings for your insurance program, feel free to get in touch with us.