Business Protection Bulletin

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.

The holidays are almost upon us and alcohol will be flowing at company parties throughout the land. Beware! If an employee or guest gets inebriated at a social function sponsored by your business and then injures another person, you could be held liable.

Consider this scenario: After polishing off four eggnogs in an hour at the company’s Christmas party, one of your workers toddles off to his car. The employee almost makes it home when he runs a red light and T-bones a car. The car is damaged and injures the driver. The driver then sues your business for negligence in allowing the employee to drive home although he was clearly “under the influence” at the company party.

What’s more, under state and local “social host” laws, your business might face a fine or even imprisonment for continuing to serve alcohol to an adult who is legally drunk.

Under your comprehensive general liability policy is a clause for host liquor liability. The insurance company will pick up the tab for property damage and bodily injuries, up to “each occurrence” or “general aggregate” limits for the CGL. This coverage will also pay for court costs, legal fees, and other expenses – and these payments will not apply to the limits.

Be sure not to confuse host liquor liability insurance with Liquor Liability coverage, which protects businesses that manufacture, serve, or sell alcoholic beverages (such as liquor stores, bars, and taverns) against claims for injuries caused by intoxicated customers. If you’re in one of these businesses, you’ll need both types of policy.

To learn more, feel free to get in touch with our agency at any time.

One of the most cost-effective advances in the construction industry has been the use of concrete pumps. Older style bucket operations took significantly longer and frequently affected the quality of the job. Modern concrete pumps allow crews to move massive amounts of concrete while maintaining the quality of the product. The bottom line: Concrete pumps move concrete quickly and efficiently in a wide variety of applications.

Despite the benefits, you’ll need to make sure that pump crews take special precautions to make the placement of concrete as safe as possible:

• Wear proper personal protective gear, including hardhats, safety glasses, rubber boots, and water-resistant gloves.
• Check that safety pins installed between the discharge hose and the boom are positioned properly.
• Make certain that no one’s working directly under the boom.
• Maintain at least a 20-foot clearance between the boom and power lines.
• Use a signal person if the pump operator can’t see where the concrete is being poured.

Although the pump operator plays an important role in the safety of the operation, job safety is the responsibility of the entire crew. Following basic safety suggestions can make concrete pumps safe to use, as well as cost efficient.

A key question in buying an insurance policy is “How much will it pay when I need it?” For most coverages, such as Property, the answer is fairly clear — the amount listed on the front page of the policy (known as the “declarations page”) for the specified property is the most you can collect for a loss to it. For damage to an auto, the policy usually sets a maximum payment equal to the current “book” value of a similar vehicle in similar condition.

Some policies have another limit — called an “aggregate” — on coverages. For example, your Liability insurance will set an aggregate limit: Basically the maximum amount the policy will pay in a given year for all damages under the policy, no matter the size or number of the claims. Depending on the nature of your business, the amount you’ll consider adequate for your aggregate can differ greatly from what’s enough to cover any single claim. Many policies automatically provide an aggregate equal to double your amount per claim (or “per occurrence”). Is this enough to meet your needs?

Let’s sit down and discuss the aggregate limits under your current policies. If they’re satisfactory, great! For those that don’t meet your needs, due to changes in valuations or business procedures, we’ll work with you to make the needed updates now, before you find yourself falling short tomorrow. Give us a call at your convenience.

Why should every start-up company consider environmental liability coverage?

The harmless products and processes of the past have emerged as dangerous long-term pathogens of the present many times – lead-based paint, asbestos, even cigarettes.

Start-ups begin with a new idea, product or service which cannot, by the nature of business, be thoroughly time-tested. As an entrepreneur, you must decide, with sparse data, to go forward.

Unfortunately, injured parties have the advantage of hindsight and long-term studies.

The period of uncertainty after new launches creates a long-term liability for environmental liability as well as products liability. Think about:

1. What are the byproducts?
2. What is our waste stream?
3. Can our components be recycled?
4. What will be the result of employee exposures?
5. Are there any known potential issues.

Review the history of products liability. Caveat emptor morphed into warning labels which soon became punch lines. “Do not use your lawn mower as a hedge trimmer” or “Do not dive into two feet of water” seem like unnecessary warnings, but the legal cases were lost and money changed hands.

Environmental liability is likely to evolve along this same pathway.

The late seventies brought government interventions like EPA and an environmental Cabinet Post. Since then, public consciousness has risen dramatically and sensitivity towards environmental issues has grown.

Unfortunately for business owners, even the most green-minded, environmental impacts are still not well defined and responsibility not settled.

Unable to reduce or modify the environmental risk, the best solution is transferring the risk by insuring it.

No matter how benign you believe your company’s product, process or service to be, you cannot adequately predict the environmental issues twenty years in the future. Certainly asbestos, a natural mineral, was considered safe by its promoters.

Look into environmental liability insurance for your start-up, or your mature company.

Most business owners would agree that it’s important to maintain insurance to protect business assets. When they think about insurance, business owners generally consider protection against hazards such as fire, flood or theft at their company sites. This is obviously an important protection to have. However, there are other types of hazards that may not be quite as high on the list, but protection could be every bit as important to offset significant financial losses. Here are five examples that underscore the need for comprehensive business insurance protection:

Company vehicle contents: If you operate a business with employees on the road making service calls to customers, chances are there is valuable equipment contained in the company vehicles. But a typical auto insurance policy would probably not cover the contents of a company vehicle if that valuable equipment is lost or stolen.

Tenant property improvement insurance: Do you rent space to conduct your business? Have you built out the interior of your space or made improvements to accommodate your business needs? If so, you probably made a considerable investment in the improvements. But many property insurance policies don’t include the value of the improvements made by a tenant to the existing structure. If you’ve invested in improvements, it’s worth taking a look at securing coverage to protect it.

Home-based business equipment: More and more people are working at home at least part of the time, even if they maintain an office or site elsewhere. Most don’t have insurance on the business equipment they keep at home; many assume their homeowner’s insurance would cover it. However, homeowner’s insurance generally does not cover business equipment. If you have expensive business equipment at home, you may want to consider purchasing additional protection.

Business interruption insurance: Remember the series of hurricanes that hit Florida? The wild fires that damaged cities and towns in California? The flooding that disrupted life in the Midwest? In addition to the effect that disasters have on individuals, they can bring businesses to a standstill for weeks or even months. Business interruption insurance can provide a way to get back on your feet.

Key person insurance: In many companies, the knowledge and skills of a single person or a top few are absolutely essential to the enterprise’s success. Key person insurance can help a company recover if an essential employee dies or becomes disabled for a lengthy time. The coverage can provide needed funds that allow the company to continue operating during a search for a successor or until the key employee returns.

As you can see, there are many hazards businesses face that aren’t covered under a typical insurance policy. However, you can get extra protection with the types of coverage outlined here. Since you invest so much time, money and effort into your business, it pays to make sure you have the protection you need.

Martial arts liability insurance is a tricky subject. It can be challenging enough finding a reliable insurer for athletic organizations, but in martial arts, your customers are coming in explicitly to learn how to fight; how to throw a punch, and how to take one. Your students are going to be taking falls, learning to block, kick and roll, and you’re going to see everything from sprained ankles to dislocated thumbs.

Generally when your students sign up, they’re going to be signing a waiver of liability. This will mean that any injuries you can reasonably expect to sustain in class, they’ll be getting it covered under their own medical insurance if necessary, and you’re not going to be getting sued for it. The keyword there is, of course, “reasonably.” This means you might not be protected if, for instance, something can be construed as negligence on your part.

This means that if you’d rather not be seeing a bump in your liability policy on a weekly basis, you’re going to need to do a little base-covering:

• Be reasonable about who you admit to your class (and what you have them do)Martial arts can be a great means of physical rehabilitation, it’s a rewarding pursuit for kids, the elderly, even those dealing with disability. It’s not something to jump into a week after open-heart surgery. Get an idea of every applicant’s health background, and exercise proper judgment in admitting new students. Likewise, be reasonable about what you can expect of each student. A 70 year old woman who’s here becau
  se it’s a fun way to stay fit is not who you want sparring against the 250 pound, weight-lifting security guard.

• Practice proper maintenanceLoose floorboards, cluttered space, bad wiring, slippery mats. If the environment that your students are utilizing is not a safe place to be practicing martial arts, it’s unlikely your waivers are going to protect you.

• Be the best teacher you can beThis, of course, should go without saying. You’re teaching the art because you want to pass it on. Poorly trained students, students who have been advanced to the next belt level before they’re ready, students who are not taught proper stretching and warm-up, are subject to injury that may well be found to be the fault of improper training. The martial arts are known as a means of “self-defense” because priority number one is not getting hurt, be it against an opponent or through improper technique.

The key to protection beyond your waivers are professionalism and passion for the art. Insurance is for when the unforeseen happens. The preventable is your job.

Aquarium insurance is different for every buyer. If you run an aquarium where you feature animals like sea turtles and starfish, then you need a very different policy than you would need insuring an aquarium used in, say, a restaurant or a hotel lobby. Likewise, exotic fish collectors need a different policy in place than either of the above-listed examples. Here’s what you need to know based on what you’re insuring:

Basic Aquarium Insurance

With a basic aquarium, whether it’s a ten-gallon tank to show off your goldfish or a fifty gallon tank to really set a room apart, you’re looking at a policy that will cover basic liability issues. It’s not just the aquarium you’re covering and the fish contained within, you also need to think about the liability involved should the aquarium break, leading to somebody cutting themselves on the glass, not to mention the water damage done to the facilities should the tank spill on antique floorboards or an expensive rug.

Marine Life Aquarium Insurance

Marine life aquariums tend to be the most expensive to insure. A basic liability plan simply won’t cover it. You’re looking at a zoo policy, covering the facility, liability for your visitors, and the animals themselves. These policies tend to cover your basic business risks, such as crime, company vehicles and workers’ compensation, but they also tend to provide extensive coverage for crisis response, emergency vacating and event cancelation and no-shows.

Exotic Fish Insurance

Your basic aquarium insurance typically does not cover exotic fish. In fact, the provider covering your tank and any liability issues attached to it might not even offer coverage for exotic fish. Many collectors of exotic fish take out specialty policies designed specifically for their collection, sort of like an actress having her legs insured. A single fish can cost thousands of dollars and be very expensive to keep healthy, so you’re looking for an insurer that offers high-risk, high-value policies for niche clients. You’re probably not going to get an exotic fish policy through the same people who cover your Honda Civic.

Showing off a bit of sea life in your building can be just the thing to set you apart. Who doesn’t love walking into a Chinese restaurant and seeing foot-long goldfish swimming around in a tank the size of a closet? But, of course, with the spectacle of an aquarium comes the additional liability involved with keeping marine life on dry land.