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Showing posts from October, 2007

California fires will "spark" questions on coverage

While the embers are still smoldering, business owners in the area are getting a chance to find out if the policies they purchased will actually take care of their various claim situations. While some may have experienced property losses due to the fire, many others were likely forced to close down due to the evacuation orders from civil authorities. When this happened their incomes were severely affected. When a business owner is faced with this dilemma the main problem is that daily expenses are still accruing. In most cases creditors aren't going to give you a break from paying just because you were closed, the money is going to have to come from somewhere. An important part of any business owner's commercial insurance policy is coverage for loss of business income. When the policy is initially written it is important that the insured review with their agent the most important expenses that will need to be covered in the event of a covered loss. The major expenses fo…

Further thoughts on risk appetite

In my previous post I discussed risk appetite and options to consider as it relates to your business. Something else to consider when putting together an insurance program for your business is risk transfer. This is something that large companies do all the time but the small business owner might not even be aware of this useful tool. Ask both your subcontractors and suppliers to name you as an additional insured on their policies. Make sure that their limits are at least equal to yours. Some of them may be hesitant to comply but you'll find that most will willingly do so as it has become a fairly common practice across the industry. By making this simple request you have in effect given yourself an extra layer of coverage than just the limits you carry on your own policy. It's best to create a tickler file to follow up every year at their expirations to ensure that an up to date certificate is provided to you. The one thing you'll really appreciate is that this is …

What's your risk appetite?

When setting up a program of insurance for a business the one factor most commonly not addressed is the proposed insureds appetite for risk. In other words, how much do you want actually insured, property and liability, and how much do you want to take on your own, self insure. To be sure, when starting up a business, every dollar counts. Unfortunately, while looking for ways to save on initial expenditures important areas of coverage are often sacrificed. Let's be sure to look at our product, what type of exposure does it represent? Take a look at your industry to find out what types of litigation, either liability of otherwise, have been brought against it. This is an area of utmost importance. Don't skimp on your limits, and seriously consider an umbrella in addition to your sub limits of coverage. While you must also pay careful attention to your property coverage, your liability is most often your greatest exposure. What was the old saying, "penny wise…

Delaware Legislature Preparing To Revisit Dram Shop Liability

Here we go again. Representative Peterson is preparing to introduce limited dram shop liability for consideration. The legislation caps the liability at $250,000 but, as is usually the case, this creates a starting point where limits are eventually increased once it's decided by the powers that be that the current limit is too low. This also puts restaurants, bars, etc, at an increased risk due to the vague wording of the legislation, specifically "reckless" sale of alcohol by the business. Also, you can be sure that if this legislation is passed, that rates will go up commensurately for not only Liquor Liability coverage, but if actual damages begin to be paid out under this law, that insurance rates on the whole will see an increase.

Insurance Companies Waging War Against Increased Punitive Payouts

It looks like insurance companies are keeping a close eye on a referendum in Washington state this fall that, if passed, would require them to pay out vastly larger punitive damage awards in the event they are found to have denied a claim that otherwise would have been covered. Should this referendum pass it would have a chilling effect on the rest of the country, most likely spreading to the rest of the states once passed by the voters up there and withstanding subsequent legal challenges. Say what you will about insurance and the companies that provide it, this is a perfect example of how government profoundly impacts the dollar amount the average business owner pays for their insurance coverage. We're all for holding a company's feet to the fire for our client's when the company misinterprets what should be a paid claim, but punitive damages as a whole, except in the most egregious of circumstances, end up hurting more than helping to keep insurance companies honest.…