Risk & Business

Recently the Delaware Compensation Rating Bureau (DCRB) announced that it is going to be requesting higher work comp rates next year. After getting approval to raise rates 14% last year the DCRB is looking for another whopping 40% increase !  This obviously is going to open up debate in the halls of the Delaware Insurance department and the legislature. The facts  are not looking to good for the State. The insurance companies faced with reduced profits, need rate increases to keep the market viable. The economy in Delaware is ranked as one of the poorest in the nation and small business just can't afford another increase in work comp. So the State's work comp market is on a collision course.The legislature put some reforms in last year to keep rates in line but the effects have yet to show results. Small business absorbed the increase last year but have no ability to take on another increase. It is going to be interesting how this all plays out. I am sure t...

The sad devastation of mountain homes, roads, businesses, and properties in Colorado, shows the unpredictable nature of flooding. Most business owners don't worry about buying flood insurance unless they are near large bodies of water or on the coast. After the events in Colorado, business owners are re-thinking their need for flood insurance. No one could have predicted that 17 to 18 inches of rain would fall so suddenly in the Colorado area. This resulted in massive flooding which caused major damage. The Flood insurance program can cover this type of event. Groundwater and rain runoff are covered by flood policies. The mistake that most business owners make is thinking their property policy would cover this type of event. Unfortunately this is not the case. The same goes with homeowners insurance policies, groundwater and rain water runoff is not covered. Flood insurance should be part of every business and personal insurance portfolio. The unpredic...

The health insurance exchanges begin signing up people October 1. Many of these Federal and State exchanges do not have enough commercial health insurers to write policies with. Now, enter the health Co-Ops.  These non profit health insurers are jumping in the fray in an effort to compete with the big commercial health insurers. Promoting low overhead and quicker reimbursements to physicians,  these Co-Ops are hoping to attract customers, and win over doctors in order to be viable for the long term.  These new mini health insurers will have the financial backing of the Federal government and will be able to take on sicker patients since they are less risk adverse and profit is not the objective. Quite frankly, I see these entities overtaking commercial health insurers over time because they could potentially lose money and still operate. Or maybe these exchanges will run in the black and create a new model for the future of health insurers. Only time will tell. Until next...

Many times in consulting with my clients, the question comes up on how to break down risks in a more understandable way. Though complex there is a way to make sense out of risks by establishing categories.  The four main categories of risk are Property, Liability, Human, and Net Income. Lets talk a little about each of these. Property risks are fairly self evident. Risks of loss to buildings, contents, equipment, fleets, etc..., are easily identifiable and can easily be managed when it comes to risk of loss. Liability is a little more difficult because of the contract issues that businesses can get involved with and the unknown of juries and judges. Human risks are very complex because human beings are complex. This boils down to employee issues on the job and off the job. Finally Net Income risks are the most insidious because it takes professionals, like accountants and finance people to identify net income risks to the organization. For a business owner, by starting with th...

After last years hurricane Sandy, the northeast sustained major damage. The national flood insurance program has paid out billions in claims. Now the federal government realizes that in order for the flood program to continue rates have to go up, especially in coastal areas. Currently the flood zone maps that determine rates are being re-drawn and reconfigured. No doubt this will result in increased premiums. So what can business owners who are close to the shore expect?  The same, higher rates and possibly less coverage.  It is extremely hard to risk manage the powerful forces of a hurricane so the only thing a business can do is buy insurance to protect its property. Too bad the only place to go is the federal flood program.  So the end result is to budget for higher flood insurance costs next year. Until next time be careful out there and know your risks. By G. Kevin Nemith President of CNC Insurance Serving DE, MD, NJ, PA, and VA www.cncinsurance.com www.bizinsura...