Risk & Business

In Delaware, 831b captive formations have flourished. This IRS approved entity allows organizations or owners to transfer risk into a financing mechanism different than traditional insurance. But what kind of risk is transferred?  This is where enterprise risk comes in. Specialists look at an organization's over all risk and decide which ones can be financed by the 831b captive. For example, warranties that are provided for by a business is an enterprise risk that can be put into a 831b captive. As more and more of these entities are created, the definition of enterprise risk will continue to expand. With the help of actuaries, the specialists that determine these risk as insurable will also become more in demand. Enterprise risk managment is a growing discipline in commercial insurance and is changing the nature of how organizations handle risk. Until next time be careful out there and know your risks. K G. Kevin Nemith. Business Insurance, Small Business Insurance, Enterprise Ri

It is becoming very apparent the value of business income coverage. As hurricane Sandy claims are being adjusted, many businesses are relying on the payments made by this coverage to continue operations. It is the nature of most business owners to think that the time to get back to business after a disaster to be in  months. In reality the time to get operations back to where they were before a catastrophe may be years. This is why business income coverage is so critical. The insurance company replaces the income you lose following a covered event. This coverage can be set up to cover a span of months or years depending on the need. A business owner can expect to be able to keep key employees, vendors, suppliers and customers with this coverage. Though it does not get the attention that property and liability insurance gets, business income coverage is vital to any business owners risk managment plan. Until next time be careful out there and know your risks. K G. Kevin Nemith, Busine

To make matters worse, last week's nor'easter that hit NY and NJ just complicated the claims nightmares that are developing.  Many adjusters had not even had time to get out to see the damage from hurricane Sandy, and now they have new damage to look at. Or do they?  The properties and businesses were vulnerable to new damage because of the hurricane. This may be a chain of causation that can be classified as one occurrence not two. Therefore only one deductible and one waiting period for loss of business income coverage. Again the courts will have to sort this out.  What a mess!   Until next time be careful out there and know your risks. K G.Kevin Nemith,  Small Business Insurance, Business Insurance, Enterprise Risk Management, Specialists serving De, Md, NJ, PA, www.cncinsurance.com www.bizinsurancetv.org .

With an estimated 5 billion dollars of flood claims expected in New Jersey and New York, will the Federal government have enough money to pay the claims?  I am not kidding here folks !  Every year Congress has to vote to continue the flood program and fund it. Records indicate that the NFIP (The National Flood Program) through FEMA only has about 3.0 billion in money set aside to cover flood disasters. With the damage brought on by Sandy, this money may quickly evaporate. My prediction is that a new funding initiative by Congress will be on the agenda after Jan 1st.  Let's hope mother nature coroperates and allows us some time to build up the fund again. Until next time be careful out there and know your risks. K Blog by G. Kevin Nemith,  President CNC Insurance Assoc., Small Business, Business Insurance, Enterprise Risk Management specialist serving Delaware, Maryland, Pennsylvania, & New Jersey. www.cncinsurance.com www.bizinsurancetv.org

Along with the massive destruction that Hurricane Sandy brought to the NJ and NY coastline, it is also bringing a controversy that could cost or save millions for either insureds or insurance companies. Most insurance policies that cover coastal properties have hurricane deductibles. These deductibles are the out of pocket costs of property owners, and they apply when named hurricanes cause damage. Some of these deductibles can be as high as 10% of the property value. The insurance industry uses hurricane deductibles to reduce their exposure to paying out claims. Now here comes hurricane Sandy or.... extratropical depression Sandy..., and the insurance companies are surely going to want to apply their hurricane deductibles. So can they?   Here lies the controversy. Since the National Weather Service changed the description of Hurricane Sandy to Extra-Tropical Sandy, then maybe the hurricane deductibles don't apply. This will most likely go to the courts for a decision since million