Risk & Business

Social media is having a big impact on the prevention of insurance fraud. Here is one example. A worker at a large lumber company claimed he hurt his back while loading lumber on a flat bed truck. The insurance company accepted his work comp claim and began paying for his time away from work and his medical bills. However the claim adjuster was looking at the social media posts of the injured worker and saw that he was participating in weekend martial arts tournaments. The insurance company immediately denied further coverage and opened up an insurance fraud investigation. This is just one story of how social media is playing a role in insurance claims. As people post the story of their lives online, insurance company adjusters can use this information when adjusting claims.  However this opens up a lot of questions regarding privacy. Some states are looking into possible laws to prevent insurance companies from using social media for claim adjustments but until then it is fair ga...

The state of Delaware passed a new cyber security law that will impact all business owners in the state. This new law will be go into affect this August, 2018. Businesses that house “personal” data       ( basically every business) are required to encrypt, protect and notify if there is a breach. Also the law requires the business provide credit monitoring and breach mitigation services for up to a year. If a breach occurs and more than 500 people are impacted , then the state attorney general needs to be notified. So what is a business to do?  Buy a cyber security insurance policy. These policies will pay for the breach notifications and mitigation services. They will also pay for the credit monitoring services that are required by the law. This is here to stay.  Yes it means more costs upon a business, but buying an insurance policy is a small price to pay. Call you insurance professional today to learn how your business can purchase a cyber liability polic...

The direct- to- consumer genetic testing market is expected to expand rapidly over the next decade.  More and more people are using genetic services to test their propensity for diseases and cancer, all in an effort to live healthier and longer lives. In comes the insurance industry, who wants to use the results of these genetic tests to set rates and improve profitability. Life, long term care, disability, work comp, and health insurers all want in on the results. Now you may say,  "wait a minute , this is private info", right?. However did you know, that every state in the US allows Life insurance companies to use genetic testing results for underwriting, so the genie is out of the bottle already. Over the next few years, every insurance company will be requesting and using genetic testing for underwriting. Now this opens up some ethical business issues that will have to be dealt with. I am sure the legislatures will being getting more involved.  Keep a...

There is a truck driver shortage in the US. The booming economy is requiring more delivery and a greater demand for moving frieght. According to the American Trucking Association, we are 50,000 jobs short. In other words we need 50,000 new drivers to cover the demand. Business owners are now faced with keeping thier current drivers and competing against other businesses for the drivers who are still out there looking for jobs.  Some of the reasons for the shortage is a lot of younger drivers are not qualified and have very little experience driving trucks. Also many drivers do not want to spend their week on the road, staying over night and away from their families.  New hour of service rules keep these drivers away. The jobs are paying better. The average pay for a commercial driver is over $53,000 a year.  However this is still not enough money to attract people to want to work driving a truck. So why does this matter?  Well the lack of drivers could put a damper ...

McKinsey and Company recently reported that 5-10% of all insurance claims are fraudulent. This may not seem like a lot but when you add in the costs then you realize it is a big deal. Those costs are estimated at $40 Billion a year !!  Now that gets your attention. ( This from the US and FBI as reported in Rough Notes magazine, May 2018). So the question is can technology stop the fraud?  Blockchain may just be the ticket to put a stop to the fraudsters. Blockchain is the technology that powers bitcoin. Its use as a tool is spreading into various other applications. The insurance industry is no exception. Because of its recorded and public ledger, insurance companies see it as a way to reduce the frequency and severity of bogus claims. The transparency of blockchain will give claim adjusters an easier way to validate true claims and recognize the fake ones. The technology behind blockchain is for another blog post. But you can surely bet that insurance compani...

In the "old days" most businesses had their value wrapped up in buildings, property, vehicles, employees, etc... in other words,  tangible risks. In today's modern, technologically advanced economy,  many businesses have their value wrapped up in intangible risks. What are some of these risks? Reputational damage, loss if intellectual property, political risk, and failure to innovate and change, are just some of the intangible risks that pose a threat to success in business. There is an insurance problem also with these risks, as few options are available when it comes to coverage. In 2017 AON did a survey of Global Risk Management and found only 24% are deemed insurable, with the remaining partially insurable (25%) or uninsurable (51%). To make matters worse these type of risks are hard to identify and monetize. You cannot apply a risk management application until these two items are known. Unfortunately, few business owners will take the time and effort to find o...

All states in the US have laws on the books allowing telemedicine. Technology has allowed patients to see their doctors “remotely” and it allows for cost and time savings. However adopting telemedicine for work comp injuries has been slow in most states. More and more state work comp statutes are looking to add language to their laws to allow telemedicine in adjusting comp claims. The reality is that many doctors and medical providers have been using telemedicine for work comp for some time without specific language in the state statutes.  The real issue in most of these states is figuring out the fee schedule for telemedicine. There has not been any standards for work comp to follow. Doctors certainly see telemedicine as “just like being there” with the patient and do not feel that is is less quality care. Insurance companies like telemedicine because it points to lower costs of work comp claims. Business owners like telemedicine for the same reason. Lets hope that state lawmaker...

According to the Insurance Information Institute there were 18,522 dog bite claims in 2017. This is an increase from the 2016 year. Also the average cost per claim is climbing. Higher medical costs and jury awards are driving this increase. The canine risk potential is a top underwriting priority for the insurance industry. Many companies are refusing to cover certain breeds, and that list keeps expanding. So what are homeowners to do with mans best friend. Good risk management practices are needed to reduce the potential of dog bites. Keeping control of your dog at all times is the ticket to reducing bite potential. It will also make your homeowners insurance company very happy. Until next time be careful out there and know your risks. G. Kevin Nemith. CNC Insurance Associates/ The Hilb Group www.cncinsurance.com 1-877-262-3276 toll free

No this is not an April’s fools joke. The Chinese Space Station Tiangong -1 is expected to crash to earth tonight or early tomorrow. The whole USA is at risk. However experts simply do not know where it is going to come down. The odds makers say there is a trillion to 1 chance your business will be hit. So the question is, is it covered?  Most property insurance contracts will cover this. If you have special form perils coverage , there is no direct written exclusion. If there is no exlcusion then the insurance company would have to cover it.  The claim report would be interesting and I would guarantee your business would be all over the news. So you can go to sleep tonight with the odds in your favor that the space station will not hit your business and if it does your insurance company will cover you. Until next time be careful out there and know your risks. G. Kevin Nemith- CNC Insurance Assoc. / The Hilb Group www.cncinsurance.com 1-877-262-3276 toll free

As a business owner your insurance portfolio is not complete without an umbrella . This gem of a policy is the best and most cost effective way to increase your protection. First the umbrella will give you extra limits above your liability, auto and work comp policies. Most of the time the cost is one third of the cost of regular liability limits. You can add layers to increase your protection based on the exposures you face. For example, you may be required to have high limits of liability coverage in order to win contracts. The umbrella policy is the ticket to get you to those required limits. Are you exposed to multiple claims in one year? If so the situation is a lot more "comfortable" with an umbrella in the wings.  In some circumstances the policy may even cover items that are not covered in your underlying policies. So add the extra protection,  at a cost that is usually less than your general liability, auto and work comp. ...

Many experts are predicting that over the next decade there will be over 50 billion devices connected to the internet. Business owners will need to adapt their insurance and risk management portfolios to protect themselves from the "internet of things". Here are some thoughts: Who owns the data?  With all the data going from devices to vendors , does the business owner still own that data and is the business liable if that data does harm? The internet is global, is your insurance protection worldwide?  Most will find out that it is not. Does this mean business owners will need global protection? Social engineering fraudsters dupe employees into being unwitting participants in cyber crimes. Does the business insurance policy cover these issues? Is the business owner liable? Denial of Service attacks on businesses is increasing, does the loss of income protection in an insurance policy cover if the business is shut down by a hacker? As you can see , business...

As a business owner you always run the risk of employee theft. Thank goodness most of it is small scale and rarely makes an impact on your bottom line. On ocassion however, a business owner can be victimized by a smart enterprising employee or employees. Let me give you some examples: FAKE VENDOR SCAM- the trusted office bookkeeper set up a bogus vendor account for office supplies (address and all). The business owner authorizsed the paying of invoices from this bogus account for over 5 years. The owner did not realize the invoices were to a fake vendor account until it was too late. When the scam was finally figured out the total loss was close to $100,000 !! THE ONE PIECE AT A TIME SCAM- the owner of a construction company would lose a few pieces of material every week at different jobsites. His crew were not doing a very good job keeping track of the inventory. Over the course of a few years this continued. Finally one of the employees ratted out the others and disclosed to the ...

Ok here is the scoop. If you have an injured employee who is out on a work comp claim, do your best to get them back to work within 60 days. There was a study done a decade ago by the Menninger Foundation that showed the validity of getting workers back before 60 days. I have seen through my experience that this holds true today. So how can employers help get this accomplished? Return to Work Programs , are the best way to get injured employees back on the job. Return to Work Programs - What's in it for YOU the Business Owner? * Reduction of work comp costs as a result of reduced claim payouts *Elimination of costs for recruitment and hiring of replacement workers * Shortened work interruptions due to inexperienced new employees *Positive goodwill between owners and employees * Lower overtime costs to maintain work loads To establish your own Return To Work Program you need to partner up. Call your insurance professional and insurance company to provide guidance and...

The word "Biology" is the study of living organisms  physiology, origins, and behavior. I am taking some blogosphere liberty by using it in the same sentence with business life insurance. Life insurance when used correctly, can "come alive" and help a business to thrive. No, I have not lost it, so let me explain. Life insurance can be used in a business to protect a key person and the revenue they bring to the business. If the key person dies, so could the income they make for the business. A  life insurance policy owned by the business can keep the revenue "alive" even if the key person is no longer living. Life insurance can help a business perpetuate to new owners. One of the major obstacles in a business perpetuation is funding buy sell agreements or contractual agreements to purchase. Properly constructed, life insurance can help facilitate these arrangements and keep the business "alive" for future owners. Life insurance can help reta...

It seems logical that most business owners would report their General Liability claims to their insurance companies quickly. Unfortunately this sometimes does not happen. In some circumstances the business owner does not even know they have a claim.  General Liability claims do not always ‘reveal” themselves. With this in mind it is imperative to report your claim as soon as you think you may have one. The reason for this is in the insurance policy. Many policies have a reporting requirement built in. If you do not report the claim within the policy period there would be no trigger of coverage. Other policies have clauses that just state “as soon as practical” or “as soon as possible”. These phrases are so ambiguous and could cause you trouble as the insurance company is in control of what they mean.  Other language in the policies state conditions that the insured ( business owner) must do in order to have coverage. Allowing the insurance company adequate time to investigate ...

Usually I focus this blog on business insurance topics. Today however I thought it would be interesting to bring to your attention a couple of interesting endorsements and exclusions available on the new personal auto policy that Insurance Service Office (ISO)  is set to release in late 2018. Even as business owners, this will most likely affect you as you buy personal auto insurance. Covering injuries to pets in the car is an available endorsement that can be added to the new personal auto policy. This is way overdue as pets have become very mobile as they ride along more than ever, with their owners. For the millennials that still live at home and need personal property coverage, the new personal auto policy will allow it to be added. However it is only on an actual cash value basis and there is no liability coverage. Exlcuding flying cars is also in the new personal auto policy. That’s right, flying cars !  ISO has looked into the future and feels that if a policy holde...

As a business owner you most likely have insurance policies that cover your buildings, contents, equipment and other property assets. These policies insure up to a value that is stated on the insurance policy. This requires you to keep up with the values to make sure your policy is adequately covering you. If you do not update your values at least annually you could fine yourself under insured after a loss. A simple call to your insurance professional to review and discuss changes or amendments could save you a lot of headaches.  Call today !  Until next time be careful out there and know your risks. G. Kevin Nemith President/Managing Director CNC Insurance Associates/ Hilb Group www.cncinsurance.com

The economy is growing and getting better. This means that opportunities will abound for your business. If you decide to expand your business and do new things, make sure you call your agent. The business insurance policy that was set up by your insurance professional  may need to be updated or changed. Insurance policies may not cover or inadequately cover your new operations. Many business owners forget to contact their agent and this can be problematic. So don’t hesitate , call today. You want to make sure that your business is protected for the growth you will most likely have this year. Happy New Year ! Be careful out there and know your risks. G. Kevin Nemith. President CNC Insurance Associates/ Hilb Group www.cncinsurance.com

In the course of business, you may find yourself thinking that certain situations or incidents may require you to call your insurance broker. The incidents go by and seemingly they resolve themselves and you go about running your bsuiness and never make that call. Fast forward  a couple of years from now and that incident that you thought was nothing has now turned into a claim or legal action against your company. Now you make the call and your insurance agent turns in the claim to the insurance company. The insurance company then denies coverage because you did not report it in a timely manner.  You cry “foul !”, and find yourself out in the cold and in a battle with your insurance carrier. This situation does happen , although very infrequently. Most insurance company policies have provisions in them that require policy holders to report “claims”.  Since the definition of what costitutes a “claim” varies from one policy to the next, the safest thing to do is call your...

The word “disrupters” is being used quite frequently in the Insurance industry today. There are many tech companies trying to figure a way to change and disrupt the way the insurance consumer utilizes insurance. Most are looking to make insurance transactions easy and mobile. It is only a matter of time your cell phone will be the common  starting point for buying, transacting, and claim making. It is already happening.  Technology, coordinating with your local agent, will also be the norm. However as I right this blog, the technology wave is slow to progress. Most of delay is caused by state regulators whose job it is to protect the consumers. Making sure technology does not hurt the insurance buying public is paramount to make it all work for the future. States have done an excellent job in holding the insurance industry accountable to their policy holders. The last thing that regulators will want is technology eroding those protections even it if does mean making the consum...