Risk & Business

In the aftermath of the terrible bomb explosions at the Boston marathon, coverage under insurance policies will ultimately depend on the definition of terrorism. Many business owners purchased the coverage and many business owners did not. If the bombing is ruled as an act of terrorism that triggers coverage then those that have it can file claims. Those that did not have the coverage would not have the use of their insurance policies. Even though the President ruled it an act of terror, coverage still may not be triggered. Under many policy forms the U.S. Treasury Secretary & U.S. Attorney General also have to declare an act of terror. So right now business owners are waiting to see if this will happen. Small business owners in Boston are on pins and needles waiting for the interpretations and definitions to be clarified so they can determine if they have coverage or not. This is a clear indication that the whole terrorism coverage issue needs to be more concise and understandable

As we said goodbye to 2012 and ushered in the new year, commercial insurance rates were climbing. Now, as we reach the first quarter of 2013, we are still seeing a steady climb. Part of this increase may be due to  more realistic large account pricing. In the past, some insurance premiums were written for large businesses as way to increase growth with little regard to profitability. However, those strategies at least for now, may be a thing of the past. What we are seeing currently in the market is a more even playing field when it comes to underwriting policies and rates. Last year, 2012 brought us many unusual and devastating weather events.  Basically, the monetary reservoirs for insurance companies have dropped below a safe level and the refilling of those reservoirs is required. Could it have been avoided? Probably. Is it necessary now? Yes. As we move into the second quarter of 2013, we will in all likelihood, continue to see rising rate levels. Until next time, be careful out t

With North Korea threatening all kinds of nuclear action against the US, many of my clients have asked if damage from a nuclear bomb is covered under their policy. My response is it depends. Some property forms cover nuclear explosion. Most however do not cover damage that is done because of acts of war. Most likely if there is a nuclear attack on the US then it would be labeled as an act of war and the insurance industry would not have to respond. This was one of the points of discussion after the 911 World Trade Center disaster.  The unfortunate reality is the thought of living through a nuclear war and dealing with damage to homes and businesses that are most likely not going to be covered by the insurance industry is just plain frightening. Until next time be careful out there and know your risks.

The economy is having a major effect on business growth. It is also causing employees to take more from their employer. Everything from office supplies to money, employees are stealing and getting caught more now than ever. Business owners are really going to have to tighten up their risk management practices in order to reduce loss.  Most employers just don't think it can happen to them, but it does and usually at surprisingly large amounts.  Insurance protection can be purchased at reasonable rates and is usually the best way to cover the risk.  Do not think it cannot happen to you. Protect yourself and know your risks. G Kevin Nemith, President CNC Insurance, Business insurance, small business insurance, serving,  DE, MD, NJ, PA and VA.