Risk & Business

In my meeting with business owners, the discussion of loss of income usually comes up. It starts out with a simple question such as this, "How are you going to make income if you lose your store..."? From this point on most business owners will tell me they have friend in the construction business and as soon as they get their claim check from the insurance company they can rebuild in a few months. No sweat, they would only have a short period of  down time and income loss to deal with. This is where a reality check is needed. Unfortunately most business owners think this way but it never happens like that. Most businesses that suffer a devastating loss to their property don't get back in business for 8-10 months, and sometimes even years. The loss of income forces them to lay off key employees, deplete cash , lose vendor relationships, lose customer relationships, and go out of business. This can all be prevented by buying insurance coverage for business inter...

Recently I had the experience of being in a coverage interpretation battle with an insurance company. My client had suffered a major loss to his business. The coverage with an adequate limit was on his policy so I figured the claim would be a slam dunk and be paid. Imagine my surprise when the insurance company denied the claim because of an interpretation of a word in the insurance policy. The debate then began as I unleashed my 26 years of experience and knowledge on the carrier. At first it looked bleak, as the insurance company had adjusted claims similar to my client using their interpretation. The case law was weak on the subject so I was left arguing my point with example after example I had experienced over the years. It all paid off as the insurance company attorney agreed with me and they paid the claim to my client. It just goes to show that in a insurance policy one word can mean everything, or the interpretation of one word. In this case I was fortunate to ha...

Heat exhaustion work comp claims increase during this time of the year. Employers need to take heed and keep your employees out of the heat of the day, especially in the construction trades. Heat related work comp claims can be severe, with long durations of time out. Use common sense and watch the temps. Until next time be careful out there and know your risks. G. Kevin Nemith President CNC Insurance Associates Inc. Proudly Serving , DE, MD, NJ, PA, & VA. www.cncinsurance.com www.bizinsurancetv.org

More and more business owners are going to cloud computing to run their operations.  While the numbers continue to show a steady climb in the growth of cloud services, there are still many businesses unwilling to make the switch. Concerns such as breaches in security, loss of data and privacy are at the top. While there have been incidents that fuel these concerns, there are also many benefits that have to be considered as well. Those benefits include reduced costs, increase control over virus attacks and also more efficiency.  While there may always be some risk associated with off-site cloud services, their popularity is definitely increasing. My prediction is that most businesses will use a cloud service routinely over the next 5 years. Well until next time, be careful out there and know your risk.  G. Kevin Nemith, President CNC Insurance Associates Inc. Enterprise Risk Management Consultant. Serving, DE, MD, VA, NJ, & PA.

I recently saw that Westfield Insurance and Eastern Alliance are entering into a partnering agreement to set up a captive facility. A captive as many of you who read my blog know, is a risk financing mechanism where the owners of the captive are usually the insured's.  The captive space has been growing rapidly across the nation. As they have seen premiums paid into captives,  Insurance companies are realizing that they better get on the train before it leaves the station. Captives are here to stay as many States are passing legislation to promote their formation. I predict that in a decade a large percentage of the insurance business will be in captives where business owners and insurance companies are partners in captive insurance companies. This will be an amazing development for insurance. Until next time be careful out there and know your risks. G. Kevin Nemith, President CNC Insurance Associates Inc. Serving DE, MD, NJ, PA, & VA www....

Smart systems for everything seem to permeate today's society. With the technological advances one would assume that computers could reduce risk or eliminate it. Imagine that anything you want to do or get involved in, you could turn to a computer model that tells you how to succeed with very little risk. Sounds possible right?  Well the fact is risk is increasing. Computers are of some help but risk continues to grow like a weed. The other factor that computers cannot predict is human behavior. It seems that us humans still rule when it comes to creating risk and allowing it to flourish. Maybe one day computers will catch up. Then the risk of computers taking over humans may be the next risk battle. Until next time be careful out there and know your risks. G. Kevin Nemith, President CEO CNC Insurance Associates Proudly Serving DE, PA, NJ, MD, and VA

Recently, I read an article concerning a woman who fraudulently collected $27K in insurance payments. It seems that between 2007 and 2012, over $ 60K in fake claims were submitted to insurance companies. These incidents are not rare and have presented a problem for the insurance industry for decades. Fraud is one of the leading causes for higher insurance rates and increased scrutiny when it comes to new insurance policies. I'm not sure what the solution may be when it comes to reducing these incidents. One thing is for certain though, as long as insurance fraud continues, insurance rates will climb. Well until next time, be careful out there and know your risk. G. Kevin Nemith President, CNC Insurance Associates Proudly serving Delaware, Maryland, Virginia, Pennsylvania, and New Jersey. www.cncinsurance.com www.bizinsurancetv.com

Insurers Of Crops Seeing Worst Underwriting Year Since 1988 For insurers  2012 was the worst drought in the mid-west in 25 years. For some states, 2012 was record breaking. Extended hot and dry periods that had not been experienced since the mid 1930's. Even now, as we begin 2013 spring and summer, the outlook is still to early to tell. With farmers delaying planting and conditions not improving, insurers are anticipating high claims once again. Claims that will be without a doubt, into the billions of dollars. As for insurers, I'm sure I speak for the majority when I say 2012 was not the best of years when it comes to claims. 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

I just got back from a company meet and greet and had a chance to talk with some of my peer agents and brokers in Delaware. I was amazed to find out in conversations with them , that many of their clients still do not have their flood claims settled after super storm Sandy. Delaware was extremely fortunate as we were spared the wrath of the storm, but some flooding damage did occur. The Federal flood program is obviously not up to par like the rest of the insurance industry I also did some research and found that many of the flood claims in NJ & NY are still open. This is totally against best practices, as policy holders deserve quicker claim pay outs. I am not sure the fate of the Federal Flood program but privatizing it may be the right choice. The rest of the insurance industry responded favorably and has paid out and settled most of the claims. The flood settlements are still problematic and may force a re-evaluation of the whole program in the near future. Until next ...

What is "Crowd Funding" and what does it mean for small businesses? Crowd funding isn't a new concept by any means but with the development of social media and networking, it has become a very popular way to raise investment funding. Most crowd funding centers around a concept, product, or idea that people feel so strongly about they donate funds or capital. For small businesses, it allows them to kick start their company much faster. Allowing businesses to keep there start up costs and overhead down dramatically. However, there are risks. Growth can happen too quickly, before all of the business infrastructures are in place. In addition there is no regulation on this fund raising concept. Some would say without those regulatory measure in place, the ability to commit fraud is greater. It remains to be seen if the good out weighs the bad when it comes to crowd funding. I guess it will depend on which side of the fence you're on. Until next time, be careful out there a...

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...