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 understand...

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 nex...

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.

If identifying risks wasn't hard enough, add meteors to the list. That's right, I said meteors! After the meteor explosion in Russia and the recent one in the northeast, it is apparent that..."hey, it could happen". The good news is that no fatalities were reported. However, hundreds of people were injured, mainly due to shards of glass. Due to the large amount of broken glass, estimates for damages is to be over $30 million. Wow !  In most case, property policies should cover this type of event. Hopefully, these meteors will continue to be very rare. Let's face it, there's already enough risk to consider so we don't need to worry about falling objects from space. Well, until next time, be careful out there and know your risks. G. Kevin Nemith President, CNC Insurance Associates Proudly serving Delaware, Maryland, Virginia, Pennsylvania, and New Jersey. www.cncinsurance.com www.bizinsurancetv.com 

The Growing Risk Concerns of Nanotechnology Nanotechnology is everywhere. From our cell phones we use to communicate to the shirts we wear on our backs, one can say nano is universal. There are thousands of businesses in the US  that use nanotechnology, and the technology is very big business. However, since nano is relatively new, little is know of the potential risks. Recently, studies have been conducted to determine if there are health risks associated with these materials. While there seems to be some evidence of potential risks, many companies may need to take steps now to guard against the probability of those risks. A large number of those risk would most likely be to the end user of the products that are made and sold. Employees may also be at risk.  As business owners, we need to do our own research into our products and operations to assess the potential risks of nano technology. Well,...

Since September 11th 2001, many things have changed or have been created as a result of the events that transpired on that day. One thing that was created was the Terrorism, Risk Insurance Act of 2002. This act provides insurance protection for business in the event of a terrorist act. Recently, there has been some discussion of ending the program after 2013. If this occurs, insurance companies will need to introduce language in general liability policies that describes in detail, what acts will trigger this coverage. Well, until next time be careful out there and know your risks. K G. Kevin Nemith President CNC Insurance Associates Inc. Proudly Serving Delaware, Maryland, PA, NJ & VA www.cncinsurance.com www.bizinsurancetv.org

Directors & Officers Coverage Directors and Officer policies are not only for directors and officers of businesses, they're also in place to protect volunteers as well. For example, board members of a little league organization could be liable for thier financial and organizational decision making. If a claim is filed on the grounds of negligence or mismanagement of funding, protection is provide by the D&O policy. Furthermore, D&O policies are specific in language and are not written to cover claims pertaining to injuries or property damage. In most cases, those claims would fall under a general liability policy. Check with an insurance professional today to assess your risks and see if a Directors and Officers policy is something you need. Until next time, be careful out there and know your risks. G' Kevin Nemith President, CNC Insurance Proudly serving Delaware, Maryland, Virginia, Pennsylvania, and New Jersey. www.cmcinsurance.com www.bizinsurancetv.com

Delaware Construction Jobs Fall in 2012 According to a report from the Associated General Contractors of America, Delaware   lost 1,100 construction jobs in 2012. Furthermore, these numbers indicate a decline of over 5% according to numbers posted for 2011. While other states have seen far worse, Delaware's numbers for construction related jobs rank low in comparison with this decline. While multiple factors may be driving this down swing, the lack of state/federally funded infrastructure projects, new tax laws, rise in workers compensation costs and even out of state job opportunities, have to be considered as adversely impacting those jobless numbers as well. As 2013 begins, we can only watch and wait to see if there will be any improvement. Unfortunately, the possibility of those numbers rebounding dramatically for 2013 are highly unlikely. Well, until next time, be careful out there and know your risks. G. Kevin Nemith President, CNC Insurance Proudly serving Delaw...

Tech is Changing The Insurance Process: Without a doubt, tech tools are changing the insurance landscape. These tools can now determine the cost of a policy by identifying risks faster and with more accuracy. Some of the ways they are utilized are algorithms that determine businesse size, product(s) it produces, geographical location and claims history. All with a click of a mouse. Does this mean the end of human involvement in underwriting? Who knows, no one can be sure what the future may hold. In my opinion, there will always be a level of human involvement to insure "one size does not fit all" for policy underwriting. Every business is unique and a policy must be written with that in mind. Make no mistake, as tech tools continue to evolve, they will in all likelihood become a staple in the insurance industry. When used in conjunction with human oversight, it should only make for a successful partnership. Well, until next time, be carefu...

During the last two years, the workers compensation rates for Delaware have seen an increase of 26%. In an effort to reduce the rate increase, Gov. Jack Markell and the General Assembly have appointed Lt. Gov. Matt Denn to head a new Workers Compensation Task Force. In 2006, Lt. Gov. Denn who was at that time the Insurance Commisoner for Delaware, worked with the General Assembly to address the same issue. Through the promise of compensation reforms, they cut rates by 45%. Over the past five years these reforms have not worked and now rates have jumped back up. One thing is for certain, the work comp rate increase has the attention of Delaware business owners. For business owners that have been able to weather the economic storm of the past few years, most are still not at a point to absorb such increases. How quickly can this issue be addressed remains to be seen. For now, it requires business owners to remain in a state of "wait and see". Well, until next time, be care...

Try as you might, there is only so much you can do when it comes to risk management. Natural Disasters are a perfect example. There's only so much preparing we can do with regards to these events, with the understanding that we cannot control mother nature. For the things we can prepare for, here are few places to start. Employees are going to be the first priority. Have emergency planning and drills that cover safe locations, exits strategies, even emergency power if necessary. Next, make sure you business's infrastructure is protected. Things like equipment or software, not to mention your insurance policies. By completing periodical insurance policy evaluations, policies can be reviewed and changed if your companies risks have changed. Finally, you will need to get your business back on it's feet. Maintain a list of individuals or contractors that can make necessary repairs. In the event of a supply chain disruption, have an alternative supplier. These are just a few of ...

At first glance, you may think "what is the difference, an adjuster is an adjuster". For insurance claims, they're different in two major ways. Lets start with the in-house adjusters. An in-house adjuster works exclusively for the insurance company. While claims may be settled relatively quickly, you may find the monetary amount from the claim tends to favor the insurance company. Simply because the in-house adjuster is employed directly by the insurance company. As for the independent adjuster, they represent the policy holder. They tend to help cut through the red tape and negotiate claims on behalf of the insured. While both parties tend to represent a side or interest, what usually occurs is a reasonable, negotiated settlement. For small claims under $10,000 an independent adjuster may not be required at all. If you have questions concerning adjusters, contact an insurance professional today. Until next time, be careful out there an know your risks. G. Kevin Nemtih...

I guess when it comes to claims reserves and their fairness, it depends on your prospective? If your the insurance company, setting a higher reserve may be indeed justified if a business's claims history indicates higher risk. On the other hand, should the business have to pay higher rates if the insurance company sets a high reserve? This back and forth goes on every day in the commercial insurance world. In theory, the reserve amount should be enough to cover claims. The insurance company gets the benefit of setting aside earnings and investing them, as claims are rarely paid immediately. In actuality my experience is that most reserves are over exaggerated. Insurance companies every year continue to release reserves back into earnings to bump up their income statements. From the business owners perspective, this just does not make sense. They are charged higher rates on the anticipation of the reserves being paid out, and the insurance companies drop the reserves and put them...

Let's face it, most employees don't want to spend the energy to learn safety procedures. It could be for a number of reasons, all of which may be very valid. Still, what are some things that businesses can do to change that reasoning. In one example, a well known distribution warehouse has implemented rewards programs for meeting or exceeding goals pertaining to safety. Rewards such as paid lunches/dinners or even coupons have been presented for safety milestones that are meet. Also, for some businesses, rewards such as extended holidays, cash bonuses or even gifts are used as well. Positive motivation and recognition can go a very long way, not only for employee safety procedures but employee production as well. Hopefully this information will help you as you move forward with your employee safety program? Well, until next time, be careful out there and know your risks. G. Kevin Nemith Proudly serving Delaware, Maryland, Virginia, Pennsylvania, and New Jersey. www.cncinsura...

Supply chain disruptions are one of the leading causes of lost revenue for businesses. For some businesses, that lost revenue may take months or even years to fully recover. How can businesses reduce their risk when it comes to supply chain? To start with, risks have to be identified. It may be a suppliers geographical location, or a severe weather event, or even a shortage of raw material. No matter what the issue, once the risks are identified, a business can manage it's risk more efficiently. Planning for these events and having an alternative when they occur, will only benefit your business in the long run. Well, until next time, be careful out there and know your risks. G. Kevin Nemith President, CNC Insurance Proudly serving Delaware, Maryland, Virginia, Pennsylvania, and New Jersey. www.cncinsurance.com www.bizinsurancetv.org

If your business maintains a fleet insurance policy, there are many steps you can take to minimize your risk. Management/CEO positions are ultimately responsible for overseeing fleet safety risk, so lets start there. A starting point would be to record and update vehicle accidents. Analyse and review those accidents to reduce the risk of similar accidents reoccurring. Create a "driving for work" policy that states the responsibilities and expectations of fleet operation. Have regular inspections of your fleet by a certified technician. Also, create an operator log for each vehicle to insure pre-trip inspections. Consolidate trips if at all possible. By consolidating your fleet operation, you minimize risk by reducing the opportunities for accidents. Please keep in mind, these are just a few ways to manage, maintain and reduce risk involving fleet management. If you don't have a fleet management policy in place, speak with a risk management professional today to get one st...

There are many businesses out there that use social media outlets to network and advertise. Many of which may be at risk and are not even aware of it. A bar owner may post a photo advertising a special event for a football game. In the photo, the group is wearing the jerseys of the teams that will be playing. Sounds harmless right? Here is the problem, without written permission from each teams franchise, you may be at risk of copyright infringement. The same applies to audio and video recordings where permission was not obtained. If copyright infringement has actually occurred and your business is found liable, damages could be a few hundred dollars to many thousands of dollars. The first step in minimizing your risk is understanding exactly what copyright infringement is. If you don't completely understand what constitutes copyright infringement, speak with a professional today. Well, until next time, be careful out there and know your risks. G. Kevin Nemith, Small Business Ins...

What does Employment Practices Liability Insurance provide? EPLI provides protection against lawsuits filed by employees. It covers employers for wrongful termination, sexual harassment, and discrimination lawsuits by employees. As an employer, why do you need EPLI? If  you are served with an insurance claim or lawsuit, EPLI will provide you with legal defense costs. An EPLI policy also provides coverage in the event of a settlement entered against the company. Keep in mind, some businesses may not qualify for EPLI coverage. Factors such as the number of employees, previous suits, and even the business type can effect eligibility. If your considering EPLI, speak with an insurance professional today. Well, until next time, be careful out there and know your risks G. Kevin Nemith Specialist in Business Insurance and Risk Management Serving DE, PA, NJ, MD & VA www.cncinsurance.com www.bizinsurancetv.org

What is a "captive"? A "captive" is a "in-house" insurance company. That's right, businesses now can write their own coverage. What companies are finding is that by creating a "captive", it allows for quicker claims response, less red tape, and in many cases, increased profits when claims are low. Of course there's more than just waving a magic wand to create a "captive". As is in most things, there is some cash needed up front. Well to be honest, a lot of cash . Therefore making it unobtainable for some smaller business. However, given the opportunity and financial means, companies can have much more freedom when it comes to financing their risk. Well, one thing is for certain, we'll be hearing much more about "captives"in the very near future. We will surely keep you posted. Until next time, be careful out there and know your risks. G. Kevin Nemith President, CNC Insurance Proudly serving Delaware, Maryland...