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:

• 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 renters insurance, 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.

• 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 insurance policy costs only around $185 a year.

• 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.

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Before you buy this essential coverage, be sure to ask these questions about Employment Practices Liability:

1. Who is insured? This should include the company as an entity, along with officers, directors, and every type of employee (full-time, part-time, temp, leased, loaned and seasonal). The importance of this becomes clear if you’re ever sued for a sexist slur made by temporary receptionist to a job applicant.
2. What claims does the policy cover? You want coverage for every eventuality: monetary damages, all types of legal proceeding from criminal to regulatory, settlements, judgments, lost pay, defense fees and punitive damages.
3. How does the policy define “wrongful employment practices” beyond the obvious (sexual harassment and racial discrimination)? Make sure that you have coverage for violations of federal, state, local and common law on employment discrimination;, deprivation of career opportunities; defamation; retaliation, negligent job evaluation, and failure to have an acceptable written employment policy.
4. What does the policy exclude? Employment Practices Liability Insurance should include wrongful practices that might have taken place before you bought coverage – so you don’t have to worry about a suit by that disgruntled vice president you fired three years ago for pilfering paperclips.

A word to the wise: use EPLI as a last line of defense. Risk management for your business should include diversity and sensitivity training. The U. S. Equal Employment Opportunity Commission offers a wealth of free training resources, guides, compliance information, and links to free training throughout the nation.

As always, we stand ready to offer you our professional advice, free of charge.

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Heavy Equipment & OSHA

What Does OSHA Say? Sadly, the Occupational Safety & Health Administration (OSHA) rules aren’t very comprehensive and can often be vague when it comes to guidelines and checklists on inspecting heavy equipment properly. There are, however, some general guidelines that you should follow:

• Materials and equipment should be inspected by a competent employee on a daily basis, or more frequently if needed.
• OSHA doesn’t have any specific requirements for mechanized equipment and motor vehicles, with the exception of when they’re being transported or used near power lines. That said, OSHA does state that any equipment that will be left unattended at dark should have reflectors, lights, or barricades so that the location of the machinery can be identified easily.
• Off-highway motor vehicles must be inspected at the start of each shift, which should include ensuring all the essential equipment and parts are free of obvious damage that could potentially cause a malfunction or failure and are otherwise in a safe operating condition. The trailer brake connections, emergency stopping system, and hand brake components of the service brakes must be checked. The tires, horn, seat belts, steering mechanism, coupling devices, operating controls, and safety devices must also be checked. Should job site conditions require the use of the defroster, windshield wipers, lights, reflectors, and/or fire extinguishers, these too must be checked. All damaged parts must be repaired properly before the vehicle can be used on the job site, even when the damage is seemingly minor.
• OSHA doesn’t have inspection checklists for earth-moving equipment, such as loaders, scrapers, wheel tractors, crawlers, tractors, bulldozers, off-highway trucks, graders, and so forth, but does state that seat belts must be provided.
• Employers should designate a competent person, meaning someone who has been trained properly in inspection guidelines, to inspect all heavy equipment on a frequent and regular basis. Note that the word “frequently” generally means “daily” in OSHA language.

Drafting Your Own Inspection Checklists. Since OSHA guidelines are so vague on the proper inspection of heavy equipment, safety experts commonly recommend that employers refer to the manufacturer’s manual for each individual piece of machinery being used on their job site and draw up their own inspection checklists using a combination of this information and that from OSHA.

However, heavy equipment manuals rarely include a detailed, comprehensive checklist. For equipment that doesn’t include one, and many likely won’t, you can use the machine’s maintenance procedures and operating instructions as a guide to create your own comprehensive checklist.

You might want to use the equipment’s OSHA inspection guidelines and the maintenance and operating information that you get from the equipment’s manual to develop several different checklists – one for site safety, one for systems, and one of safety equipment.

Once developed and ready for implementation, make sure that you explain thoroughly each of the checklists to your employees. Any employee that operates heavy equipment should be trained on the checklists and the importance of their completion each day before work ever begins.

It might take a little effort on your part, but having comprehensive, easily understood inspection checklists on every piece of heavy machinery on your work site is vital if you want to keep your business operations running smoothly and your workers safe. Don’t forget that having these checklists in place will essentially be pointless if your employees aren’t trained on how to use them properly.

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Wrap Up

Wrap policies usually offer superior coverage, higher policy limits and greater contract certainty than traditional Commercial General Liability, Workers Compensation, and (often) Builders Risk insurance written for individual subcontractors and types of risk. What’s more, Wrap coverage can minimize potential cross-litigation on construction projects.

Although they’ve been available for decades, these policies have become widespread in recent years, due to the skyrocketing costs of raw materials, financing, and litigation. There are two types of Wrap coverage: owner-controlled insurance policies (OCIP), and contractor-controlled insurance policies (CCIP). Either variety allows the owner to spread the risk among different parties, while providing a seamless insurance safety net for every company and individual involved – which can translate into profit, based on loss experienced over the life of the policy.

Because of their extensive coverage, Wrap policies are usually more expensive than other types of Construction insurance for the owner or primary contractor, who will pass on the extra cost among the general contractors and sub-contractors on the project. This is a small price to pay considering the peace of mind that comes from having all coverages and insured parties protected under a single policy.

Because of their complexity, insurance companies often tailor Wrap policies for each project, writing them on a customized (“manuscript”) basis. Our agency’s professionals would be happy to work with you and your insurer in creating coverage that’s comprehensive and cost-effective. That’s what we’re here for. Call us today.

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The “coinsurance clause” in a Business Property policy reflects the fact that the coverage divides this risk by setting premiums based primarily on the value of the property. Those who insure their property for less than its actual cash value (ACV) or replacement cost will have to pay the uninsured portion of any covered loss out of their own pocket — in other words, “coinsuring” the risk — which encourages policyholders to buy coverage for the full value of their property.

Coinsurance - How Much?

The coinsurance clause usually requires policyholders to insure their property for 80% of its ACV. For example, if the property of your business is worth $500,000, you would need to purchase a $400,000 policy. If a fire caused $300,000 worth of damage, the insurance company would pay $240,000 (80% of $300,000), leaving you to pick up the other $60,000. However, if you had purchased the full $500,000 in ACV coverage — paying a higher premium — the insurer would cover the entire $300,000 claim.

We’d be happy to discuss the benefits that the coinsurance clause offers. Feel free to give us a call.

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The explosive expansion of Web-based communications and social media has aggravated the risks of reputational damage, while dramatically reducing response time to counter these threats.

According to Reputation Review 2012, a report from Oxford Metrica sponsored by Aon P.L.C., a public company runs an 80% chance of suffering a reputational risk that can cost at least 20% of its equity value in any month over a five-year period. Privately held companies face similar risks.

These exposures can come from a wide variety of sources, from product safety and unhappy customers to regulatory pressures and behavior by managers. Examples include recent massive breaches of consumer data held by major financial institutions, and the effect on companies that faced supply chain disruptions or radiation fears after the Japanese earthquake and tsunami of 2011 — not to mention the impact of that year’s outbreak of listeria in cantaloupes. Although this infection came from a single farm, other producers (and even companies selling different types of melons) suffered a loss of reputation.

With reputational risks coming in various and sometimes unpredictable forms, experts recommend a few things you can do that to help protect yourself.

Reputation Management

• Creating an “early warning system” to monitor print, electronic, and social media for negative references to the company.
• Evaluating whether a negative comment should have a response (not every tweet or Facebook post matters).
• Getting frontline employees involved in responding to reputational threats, rather than having top management and PR staff deal with them.

Our agency’s experts stand ready at any time to help you discuss your risk, review potential scenarios, and then build and test a plan for dealing with events that threaten your reputation.

Having an effective plan to deal with these threats can actually improve your company’s reputation. If you have concerns of the protection of your corporate reputation, don’t hesitate to contact us.

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Although insurance offers one way to manage this risk, it might well be a long time before a company discovers the identity theft — at which point, it would be too late. To avoid or minimize the danger of having your corporate identity stolen, we’d recommend a three-step approach.

Identity Theft: 3 Steps to Protect You

1. Storing sensitive information. Sensitive files and information (credit card numbers, medical data, Social Security numbers, etc.) might be stored on computers, external drives, filing cabinets, or mobile devices. It’s wise to consolidate and secure this data either physically behind lock and key or by using electronic network security measures. Be sure to train employees on handling, storing, and disposing of this type of information properly.
2. Your business documentation. Identity thieves might use highly sophisticated or surprisingly elementary and low-tech techniques for delving into a company’s records and misappropriating them. These might include intercepting paper mail, stealing trash, or physically taking documents. To safeguard this information, determine what records you need to run the business, inventory them, and use electronic statements to limit the amount of mail containing company information. Never share financial details or documents through e-mail!
3. Credit reports. Check your company’s credit reports regularly for unusual charges or bills.

The Federal Trade Commission (http://www.business.ftc.gov/documents/bus69-protecting-personal-information-guide-business) provides a variety of resources you can use to help protect your corporate identity and confidential customer information against identity theft.

Our agency’s professionals would be happy to offer their help — just give us a call.

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Concealed weapons and “reasonable care”

A company that allows customers or visitors on its premises has a legal obligation to exercise “reasonable care” in keeping them safe, a responsibility that includes warning them about any hidden dangerous conditions. For example, in states with “concealed carry” laws, a store owner might need to post warnings that sales clerks are armed.

Let’s say that an employee carrying a concealed weapon negligently or deliberately shoots a customer who is legitimately on the premises of the business — and the customer then sues the employer for bodily injury. On the other hand, suppose that an employer forbids workers from carrying weapons on the job. If an employee is attacked and beaten at work, he or she might sue for damages from bodily injury, claiming that the employer’s ban on firearms in the workplace impaired the employee’s ability for self-defense.

Although your Commercial General Liability (CGL) policy should provide coverage against such claims, it makes sense to minimize this risk by taking pre-emptive action. One effective approach: to seek an exemption from the scope of the concealed-weapon law (if one doesn’t already exist), giving you the authority to forbid weapons in the workplace. Make it clear to all employees and potential employees that company policy forbids bringing weapons onto the premises. You might also conduct comprehensive pre-employment screening to help hire stable, sensible people who are unlikely to settle disagreements with lethal force.

To learn more about protecting your business against the potential problems created by concealed carry laws, feel free to get in touch with us.

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• An engineer designs the site and grading plan for a construction project.
• After the project’s completion, the developer finds that the parking lot is not draining.
• In March, the developer writes to the engineer, accuses him of failing to follow recommendations in a geotechnical report, and orders him to create a plan to correct the drainage problem.
• The engineer responds by saying that his design was sound but the contractor’s work was defective.
• The engineer and developer hold several meetings to determine what caused the problem. The engineer sticks with his version of events.
• In May, the developer writes again to the engineer, accusing him of committing design errors and shirking responsibility for the problem.
• In August, the engineer notifies his liability insurance company that the developer is making a claim against him.
• Sometime later, the developer sues the engineer, architect and contractor.

Claim Question:

When exactly did the claim occur, and when should the engineer have reported it to the insurance company? In this case, the company said it did not have to provide defense or coverage because the engineer violated the policy conditions by reporting the claim late. In the company’s opinion, the developer’s March letter was a claim that the engineer should have reported. A court said that the case would have to go to trial, as the report’s lateness was unclear. The policy insured against claims occurring during the policy period and made within 60 days after the end. When, however, does a dispute become a claim, triggering the obligation to report it to the company? The answer turns on the policy’s definition of “claim”:

“ … a demand for money or professional services received by the Insured for damages, including but not limited to, the service of a lawsuit or the institution of arbitration proceedings or other alternative dispute resolution proceedings, alleging a wrongful act arising out of the performance of professional services.”

The court applied this definition to the March letter, asking whether a reasonable person would have considered the circumstances known to the engineer as a possible claim. In the court’s opinion, the answer was no. Until the developer’s May letter, the court said, a reasonable person could have concluded that the developer was unsure as to who was responsible for the drainage problem. The letter ordered the engineer to develop a plan to correct the problem. The engineer believed he would be paid for creating this plan, an assumption the court found to be reasonable. Because one reasonable view of the letter was of a request and not a demand for services as compensation for damages, the court said that the case must go to trial to resolve the question of facts.

This case illustrates a dilemma for all sorts of organizations. If they fail to report incidents that eventually turn into lawsuits, their insurance companies might try to deny defense and coverage because of late reporting. Conversely, if they report every incident, no matter how minor, their companies could eventually decide to drop their coverage because of frequent losses, even if most of the reports amount to nothing. To deal with this problem, some policies permit circumstance reporting. The policy that ultimately covers the claim is the one in effect when the insured reports the circumstance to the company, if a claim results from that circumstance.

Check with one of our insurance agents to find out what the reporting requirements are in your professional liability policy. Know what’s in your policy and what it requires you to do so that you don’t jeopardize your coverage.

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In defining independent contractors you should also:

• Check state law for the definition of independent contractors; if needed, seek legal advice for clarification.
• If the law requires independent contractors to register, check the state’s online portal to verify that the contractor in question is registered.
• Have a written contract with every independent contractor that outlines the relationship and does not restrict the contractor’s freedom to work for others.
• Make sure that the contractor provides their own tools and equipment.
• To avoid the appearance that an independent contractor is drawing a paycheck, provide payment based on completion goals, rather than weekly or bi-monthly — and require invoices for payment.

For more information, please feel free give us a call at any time.

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