Risk & Business

Every business owner has heard from their insurance professional that they should buy an umbrella policy. For those who have one , you are better protected. For all the owners reading this blog that do not have one, lets take a few minutes to try to convince you to buy this important policy. Your business is exposed every day to risks that could occur in your operations, work force, autos, and your products. Your general liability policy and your other liability limits in your auto and work comp policies, are your first line of defense. However what happens when the limits in these policies run out? This is where an umbrella policy kicks in. It provides the back up limits you need to cover the unexpected claims that could exhaust your first line of defense in your underlying policy limits. In addition this policy is 1/4 of the costs of your other policies. You can also add layers with higher limits and each layer costs less the higher you go. Many of thes...

Every business owner at one time or another find themselves having to request a certificate of insurance from their agent. This could be to show coverage for adding a new vehicle, equipment, property, or complying with contract terms, etc... However what most do not know is that a certificate of insurance is not part of the policy. The certificate is just a summary document of what coverage could apply in the actual policies. The certificate itself has bold language on the top of the form stating that the document is issued " as a matter of information only" and "does not amend, extend, or alter" the coverage in the policies. So why are certificates requested and issued so frequently when they are not part of the actual insurance policies? The main reason is that most people do not understand  nor have the time to review insurance policies to determine if there risks and interests are covered. The certificate of insurance was the creation of the industry. It was...

Many business owners get a shock when they find out their general liability policy will not cover damage to their work or product. Unfortunately, many owners find this out after a claim. There are some circumstances that give rise to coverage but in most cases there is not. So let's break out how a general liability policy is put together and how you can expect it to respond to a claim. The policy provides coverage when your business is liable for  property damage and or bodily injury of others. In the course of your business  if you cause damage to another's property or injury to others, then you can expect the general liability policy to respond. However if the property damage is to your own work or product, or the injury is to you or your employees, the policy does not respond. This distinction is what business owners need to understand. When you buy a general liability policy, you are buying protection that your business activities may pose on others,...

In an effort to improve tracking of workplace injuries, OSHA will be requiring business owners to submit injury records online. Prior to this year, most business owners would post at their OSHA 300 logs at their place of business. Effective this year in 2017, those logs will have to be electronically submitted to OSHA.  According to OSHA, this requirement is to "nudge" employers to focus on safety, by making injury information publicly available.  The rule went into effect on Jan 2017, however as of this date the portal is still not up and functioning to meet the July 1 deadline to send in your reports. Not all businesses have to report this year, so check the OSHA website to determine if your business is required. This is going to be a big change for business owners. Having their injury records posted for competitors and the public to see,  could be problematic. Many injuries that happen on jobsites are not necessarily an indication of lack of safety....

If your business suffers a water damage claim, do you know if your property policy will cover it?  Well it depends on whether the water damage is considered a flood, which is usually not covered. Check out our video blog to learn more . https://youtu.be/ee4h8V1dC-U G. Kevin Nemith , President CNC Insurance Associates & The Business Insurance Center www.cncinsurance.com www.bizinsurancetv.org 

Every business owner sign numerous contracts during the course of business. One of the major provisions in most contracts is transfer of risk and or responsibility. What is common is the person or entity that lets the contract is trying to pass risk and liability on to the signer. So before you put your signature on another contract read it and look for  key words that will clue you in on what your agreeing to. Here are just a few. "Any and all": when you see these words it usually is not good for a business owner. Someone in a contract is trying to make sure there are no issues you the signer won't be responsible for. "By any cause whatsoever" : this is easily understood that what ever liability or risk that was being referenced in the contract , you the signer, are on the hook no matter what the cause of liability or risk is. "Hold Harmless" :  this is a fancy way of saying you the signer are going to have to protect the entity that is having you...

It seems that everyday in the news another large company or financial institution is being hacked. Do to the large scale of these cyber breaches many small and middle sized businesses feel that their company would not be the target of professional hackers. This is simply not correct. Many small businesses get cyber attacked every day but never make the headlines. That is why a Cyber insurance policy is so important. I thought I would outline the "meat and potatoes" of this important coverage and then make a pitch on why you should buy a policy for your business.  The basics of cyber insurance coverage is to protect the business (First Party) and the business customers, (Third Party). Protecting the business from unauthorized access, virus transmissions, theft of data, loss of business income,  and cyber extortion are just some of the first party protections a cyber insurance policy can offer. The policy can also cover customers who were financial...

The process of hiring and firing employees has become a risky endeavor for business owners. Employers are finding out the hard way that by not following good risk management protocols, their chance of lawsuits from disgruntled employees increase. The risks also increase if you have over 50 employees as this triggers many federal laws and rules that could trip up employers. So what does a business owner do to better protect themselves?  Along with a good risk management process, the next step,would be to buy a Employment Practices Liability policy (EPL).  This insurance policy will protect the employer from hiring and firing claims. For example, if a fired employee sues their employer for wrongful termination, this policy will pay defense costs and also cover any judgements. Another example would be if the business was being sued because it hired one person over the other, again the EPL policy would cover the employer. In addition to the protections of hiring and firing,  ...

One of the biggest gaps in coverage occurs when business owners have vehicles on their fleet policy that do not match the name insured on the policy. How does this happen ?  Here is the scenario. A business owner buys a new vehicle for the company and they title the vehicle in their name personally. They decide they want to use it for personal and business. They call their broker to add it on the business policy but never mention that the vehicle is titled personally. A potential coverage gap can occur if the business auto policy is not endorsed , or set up , to cover vehicles with different titles.  Other situations occur when titles are changed for various reasons during the year but the business owner forgets to tell their broker. The fix is fairly simple as there are many endorsements and change requests that can be added to a business auto policy to cover vehicles with different titles. The lesson here is to make sure you communicate with your insurance professional when...

Here is the scenario, your best driver in your company got a DUI on the weekend after leaving a restaurant and blowing a .08 at a checkpoint. This driver has had a excellent record up till this unfortunate situation. Now he has lost his license and cannot drive for your business for 6 months. Its a tough burden on your company but you make arrangements and keep the driver on as an employee waiting for the suspension to end. Finally the day arrives and he gets his license back. You notify your insurance company that you wish to add him back on as a driver in your fleet. The insurance company refuses to allow it and tells you he cannot be a covered driver for another 2 years!! This scenario is happening more and more as insurance underwriting standards have become tougher than state driver licensing laws. This usually adds up to more headaches and higher premiums for business owners. The reason for this can be found in the courts. Insurance company claim payouts...

A recent survey of  business owners on what they felt were their top risks, found that the risk of business interruption is feared the most. With tight margins and a continued sluggish economy , business owners know that they cannot afford for their companies to be down for any amounts of time. With this in mind,  let's take a look at the top 5 risks of business interruption.  Supply Chain issues tops out as the number one concern. Most businesses depend on just a few main suppliers or vendors. This dependency has a major financial risk to the business if the flow of goods or services were to be interrupted or stopped all together. Cyber Crime falls in as the second biggest risk. This is a growing problem that does not show any sign of slowing down. Rounding out the last three are Fire, Natural Catastrophes, and Machinery Breakdown. Keeping the business open needs to be a main talking point for insurance professionals as they discuss risk management strategies with owner...

There is a lot of talk about the sharing economy. Businesses that share resources with other businesses for money, is rapidly increasing. An example of this would be Company A  allowing a salesmen from Company B to share a ride in a company auto, for a small fee. Property and equipment sharing is also another example. This isn't new. Businesses share things with other peers all the time. What is different is money is now exchanging hands. When money is involved you create contracts. When there are claims involving these sharing situations standard business owners policies may not cover the contractual relationship a sharing risk creates.  The insurance industry is starting to respond to this trend but not as fast as it is growing.  Make sure you contact your insurance professional and check your policies if you are sharing your business resources.  It may seem like a great way to make extra profits, but you could be risking more than you realize. Until next time be c...

Many business owners allow some personal use of company vehicles by employees. Mostly this is for minor business type activities after hours, emergencies, or general accommodations. However in the age of big data, business owners are getting a wake up call.  A quick review of an employee motor vehicle record (MVR), an employer can assess if  fines, accidents, or other violations were after hours in a company vehicle. What is being revealed is that employees are driving a lot more with business autos, than was even expected. One example, is when a DUI shows up on an employee MVR. Employers find out their employee stopped on their way home to a local bar or restaurant and registered a DUI in a company truck.. The bad part about this is the business owner now has a driver that can no longer drive for work and also the business was exposed to high risk due to the driver's irresponsibility. There are many other examples of the ...

The value of mandatory post accident drug testing as a safety and risk management strategy, has been clearly demonstrated for many years. These policies have helped business owners protect employees from injuries and also reduce the costs of insurance and risk. However this has now changed. OSHA has put into effect a new rule that protects employees from actions by employers deemed to be retaliatory. Mandatory drug testing is one of those actions. OSHA wants employers to have a more balanced approach which limits post accident drug testing to situations from which drugs would have likely been involved in the accident. In other words the employer should at least suspect a reasonable possibility that drugs caused the accident. This may be simple in theory but in practicality it will be extremely difficult for employers. Training employers to accurately spot drug use between injured employees so as to determine who gets the drug test and who does not, is a recipe for problems. Mandatory d...

There is a new sheriff in town when it comes to catching insurance fraud. Social media has become a fraud investigator's best friend.  Over and over individuals who have claimed work comp injuries or disability injuries are getting caught by their posts on social media. Even the courts are agreeing with the insurance companies ability to use social media against claimants. Critics however,  are saying that it is an invasion of privacy. In addition there has been some question of the ethics of "spying" on claimants in order to deny their claims or arrest them for insurance fraud. These questions are not stopping the industry as they are now using social media investigative software to track people. This is going to get interesting as this type of crime stopping continues to develop. What is amazing is the amount of fraudsters who continue to expose their true intent on social media with no worries about getting caught. Keep your eyes on this one folks. Until next time be c...

The experience, of buying business insurance, has been the same for over 100 years.  Most business owners look at it as a necessary evil, and something they hate doing.  Well, times are changing. With many of the biggest insurance companies in the world investing in tech, buying business insurance on your cell phone is not to far away. In fact there are platforms right now that allow you to do it. The insurance buying process will get easier and more efficient over the next few years. Small business owners will be able to utilize their mobile devices to interact with their agents and brokers , who in turn will connect seemlessly with the insurance marketplace. In addition the role of the insurance agent/ broker as a trusted advisor and "go to"  professional  will still be in high demand. However they will need to be tech enabled to allow for an easier communication and processing experience in order for consumers to find them valuable.  All this innovation will...

Hiring employees and managing them to help your company grow is a daunting task. A strong insurance portfolio and good risk management is needed especially when you have to fire someone. Most business owners work in States that have employment "at will" which many believe make it easier to terminate an employee. This is just not the case. Federal laws and regulations have set up protections for many employees. FMLA, Anti-Discrimination Laws, and Fair Employment Standards Act, are some of the laws that protect employees from "wrongful termination". Also,  many states have their own protections.  Firing can be even more problematic when you take into consideration the employer's responsibility in managing the run off of the health and benefit plans. To have employees work for you, means that you need a good insurance and risk management strategy. The risk of a wrongful termination lawsuit is greater than its ever been. Make sure your work comp and Employers ...

Many business owners are using drones in their daily operations. Surveying job sites, properties, and aiding in repairs, are all practical uses of drones. However there could be problems with insurance. The Federal Aviation Administration now requires any drone .55lbs or greater to be registered. In addition pilots must be certified if the drone is to be used commercially. This is where the insurance issues come in play. Most commercial liability policies exclude damage caused by aircraft. Once a drone becomes registered it is now classified as an aircraft. Business owners are using their registered drones and not realizing they have no coverage if the drone was to damage something or someone.  Also, the property policy will not cover physical damage to the drone itself. There is good news however. The insurance industry is responding with endorsements that add coverage for the use of drones. Also there are special insurance programs that c...

The state of Texas currently allows qualified employers to "opt out" of the work comp system. This allows  businesses to take care of worker injuries outside of the rules and regulations of the law. Proponents of this option are testing other state legislatures in an effort to mirror Texas. Recently, Oklahoma courts declared this to be unconstitutional , but the fight for "opt out" goes on. Work comp laws were put in place many years ago to make sure employee work related injuries were taken care of and the employers were protected from injured worker lawsuits. This was deemed the "exclusive remedy"  between employees and employers. It has worked well for almost a century. However businesses have been plagued with skyrocketing work comp premium costs and rising medical costs. So business owners are looking for a way to control these costs and feel that opting out of the work comp system may be the ticket.  The risk for  business is they no longer get the ...

In a recent report from the National Society of Actuaries, the life expectancy for Baby Boomers, GenX and Millenials has dropped 6 months. Now I know what you're thinking, "who are these actuaries and what do they know?"  Actuaries are those people that take all of the big data that is out there and figure out insurance rates as well as life expectancies for the insurance industry. Currently a 65-year-old man can be expected to live to his 86th birthday. A woman at the same age gets a few more years, to 88. For Millennials, a 25-year-old man has a 50/50 chance of seeing age 86 and 11 months and a Millennial women has a 50/50 chance to see age 90. Here is the bad news. These projections are 6 months less than the same projections from last year. The actuaries have seen the numbers decline because the health of people overall has deteriorated. Obesity, liver disease, stressful living, are all factors that are reducing life expectancy. It remains to be seen if this is a tre...