Entries Tagged 'General Insurance' ↓

When you are thinking about ways to manage risk, you generally believe that the insurance premiums you pay represent the sum total of your insurance costs. You may need to think again.

For example, if an employee rear-ends a vehicle in traffic, seriously injuring the other driver, once your insurance carrier pays the damages you may believe the matter is closed. It’s true that damages paid by your carrier are direct loss costs, but after quantifying the costs of insurance and direct loss costs to your organization, including deductibles or retentions, you can see there are also indirect loss costs.

If you think of a claim or injury as an iceberg, you will find that the majority of the incident’s costs lie under the water’s surface. Experts estimate that the indirect costs of accidents and injuries are actually seven times the direct loss costs.

Direct Costs

Direct loss costs are quantifiable and include insurance premiums; the amount paid to repair damaged equipment or medical costs of injuries; lost wages; fines imposed by regulators; costs to defend the claim; and deductible costs.

Indirect Costs

Indirect costs are more difficult to calculate. In fact, they may go unnoticed by your organization until you wonder what’s happening to your profits.

Indirect costs that may or may not apply include staff administrative time and cost to administer the claim and resulting damages; lost productivity and profits; the cost to hire temporary workers to meet production goals; potential failure to meet pre-injury production benchmarks and replacement or downtime of damaged equipment or tools as well as time lost by other employees impacted by the incident.

Morale suffers

Costs also might include lowered morale that inevitably occurs post-injury, especially when that worker remains off work; staff time spent investigating and defending the claim in depositions, mediations or trial; damage to your organization’s reputation after high-profile adverse events; and business costs to relocate even though you’ve purchased business interruption coverage.

Here are several steps to help you understand these costs and reduce them.

Evaluate your last few claims. Calculate direct loss costs by considering deductibles and payments made by your insurance carrier.

Sit briefly with a few members of your team and ask them to describe the challenges they faced after the loss. It may have been disrupted production, added temporary workers, lowered morale and lost administrative time in handling the incident, which are indirect costs.

Considering this practical information, determine a plan to prevent future occurrences and reduce indirect loss costs should another event occur.

Call my office to help you develop a plan to reduce losses.

Keep evaluating your plan to determine its effectiveness and change it as needed.

Even better … preventing loss-causing incidents from happening can save costs, human as well as the direct and indirect losses that can hurt your bottom line.

The face of the American workforce has been changing. These days many companies seldom see their workers, as most employees work almost exclusively from home. Many managers agree that virtual work saves organizations a great deal of money and actually increases productivity. However, virtual work creates new risks for any organization.

When your employees begin working from home, you must implement new policies and procedures to help keep your virtual workers safe and productive when they’re working at home. Here are seven tips to help you better manage your virtual workforce:

• Update each employee’s job description and include current essential job functions that reflect his or her home-based work. As difficult as it is to police, ensure that you develop written policies and procedures around the use of social media.
• Discuss the appropriate insurance and decide who pays for it. Also, set ergonomic standards for home offices. Visit your employee’s home to ensure that their workspace is appropriate. Is the work area separate from the rest of the family? Is it well designed or is the computer sitting on a milk crate? Your employee’s equipment should be appropriate to the task, so make sure that your employees use appropriate desks, ergonomic keyboards and well-fitted chairs.
• Some companies supply the equipment themselves, however, others want their employees to pay for their own, believing the employee’s initial investment is a trade-off for the savings he or she will reap in reduced gas and vehicle maintenance costs.
• After your initial visit, continue to communicate with your employees and make adjustments as needed. Implement an annual reminder checklist for employees working from home, addressing fire and life safety issues as well as data security or other concerns.
• Do not assume virtual employees work only from home. One survey found that virtual employees worked at three or four different locations. As well as home, these locations might include parks, beaches or coffee shops. Consider potential security issues at each of these locations and develop policies to protect your data and your employees.
• If employees report to the office for any part of the day, for example for a meeting, many managers require them to stay for the entire day. This reduces commuting risks and arguments over whether commuting time is compensable.
• Ensure that virtual workers know what to do if they hurt themselves at home. They should know the location of the nearest industrial clinic and understand your specific injury-reporting requirements. After an injury, the employee’s job description provides the treating physician with critical information to assist his or her return to work in a modified-duty position. It also helps to determine if the injury arose out of his or her work on behalf of the company or whether it resulted from household work. You do not want to pay injury claims if they are not work-related.

In today’s economic environment, the virtual workforce will continue to expand. With some preparation, you can help keep virtual workers safe in their homes and increase productivity as well.

As a business owner, you may not think that insurance fraud affects your business.

While you may not experience fraud directly, you certainly experience it indirectly through increased insurance premiums. As the Federal Bureau of Investigations says on its website: “The total cost of insurance fraud (non-health insurance) is estimated to be more than $40 billion per year. That means insurance fraud costs the average U.S. family between $400 and $700 per year in the form of increased premiums.”

Who is committing $40 billion in fraud? It’s true: organized crime rings do commit fraud. However, it’s the high number of ordinary people who commit fraud that may be the most telling. Particularly during tough economic times, many individuals look for ways to raise money by defrauding their insurance companies.

Some of the most common scenarios target auto insurance and worker’s compensation insurance. In these scams, people generally claim larger benefits than they are due. In car accidents, for example, requests for repairs or reimbursements are padded to cover deductibles. Similarly, in workers compensation claims, injuries are exaggerated, so the insured workers are off the job for a longer period of time and collect more than is warranted for the type of on-the-job accident they suffered.

Your best defense is a great offense. Know your executive team and your staff personally. Train them well, and put into place a good system of controls and cross-checks. You’ll feel a lot more confident that you have reduced your risk of experiencing a fraudulent claim.

Businesses handling money need to consider crime coverage as part of their commercial insurance portfolio. This provides protection in eight key areas:

Employee Theft covers any kind of theft by an employee and isn’t limited to theft of cash.

Forgery and Alteration applies to third parties, including contractors who are in your workplace for cleaning, construction or repairs and who steal your checks. Coverage is provided for checks drawn on your account or the account of any party who acts as your agent. Checks include drafts, promissory notes, and orders or directions to pay money.

Inside the Premises – Theft of Money and Securities includes money (defined as currency, coin or bank notes in current use with a face value) as well as traveler’s checks, register checks and money orders held for sale. Cashier’s checks are not considered money.

Securities are defined as negotiable and non-negotiable instruments that represent money or property, including commodities such as grain and tokens and stamps (even stamps in a postage meter). Securities can also be evidence of debt related to credit or charge cards, but only if the evidence of debt is against a card not issued to the insured.

“Inside the premises” encompasses your place of business and your banking institutions. If your bookkeeper is taking checks to the bank and they’re stolen, you are covered.

You are also covered for an attempted or actual theft from locked safes, vaults, cash registers, cash boxes and cash drawers inside the premises as well as for the disappearance or destruction of money or securities.

Inside the Premises – Robbery or Safe Burglary of Other Property covers you against robbery (the unlawful taking of covered property from someone having custody of it, where actual bodily harm or threat of bodily harm is involved). It can also be an obviously unlawful act witnessed by the person having custody of the covered property. Safe burglary requires evidence of forcible entry into or the removal of the entire safe or vault from the premises.

Outside the Premises is literally anywhere outside your business. Coverage is provided for theft, disappearance and destruction while outside the premises and in the custody of a messenger or armored car company. Coverage includes theft, robbery or other instances of accidental loss.

Computer Fraud provides world-wide coverage of money, securities and other property fraudulently transferred by computer from the insured premises or banking premises to a location other than the insured premises or the banking premises. It does not include transfer to a messenger.

Funds Transfer Fraud provides coverage for loss of funds resulting directly from a fraudulent instruction directing a financial institution to transfer, pay or deliver funds from the insured’s transfer account.

Money Orders and Counterfeit Money provides coverage for counterfeit money accepted in good faith in exchange for purchases. It also covers money orders accepted by the named insured in good faith but not accepted when presented by the named insured for payment. The coverage territory is limited to the U.S., its territories and possessions, and Canada.

Ever have a flight delay? Ever have a trip cancelled? Ever have a hurricane ruin the vacation you’ve waited all year for? Lost your deposits on hotels, rental cars, airfare? A quick, inexpensive way to protect your dollars is with Travel Insurance. Click on the link below to see how your vacation money can be saved:

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The really bad thing about identity theft is not simply that your personal information has been stolen; it’s that the thief is using that information for his or her own gain at your expense.

It’s not just your credit card that’s at risk. Hackers can access your Social Security number, medical records, date of birth, driver’s license number, even your eye color.

The identity thief can start new credit card or bank accounts using your name; he can combine your information with his own to create a completely new identity. Thieves also can use your medical information for fraudulent purposes or assume your identity if they are arrested or caught speeding.

The good news is that just as your information can be misused, there are ways to prevent it from happening.

One way thieves get their information is by dumpster diving – gaining access to your mail in the trash. For example, a thief can sign up for a credit card in your name using the application form from discarded mail offers. Shred all important documents, even those annoying credit card solicitations. There also are companies that can remove your name from solicitations’ lists.

Keep important documents, including your birth certificate and passport, in a safety deposit box. Don’t carry your Social Security card or checkbook with you.

Lastly, make sure your computer security software and firewalls are up to date. Encrypting files and using password-protected documents will give you added protection. When shopping online look for https:// in web addresses. The “s” signifies a secure link.

Property managers and boards of directors of a Homeowner Association (HOA) are charged with finding the best insurance coverage for the best price. These are also referred to as Master Policies.

The best types of Master Policies include adequate insurance to cover property and third-party liability damage.

An HOA policy will undoubtedly include Property coverage for the exterior structure and Liability coverage for third-party claims.

But there are some additional types of coverage that are just as important and need to be included on the policy as well.

They are:

Fidelity or Employee Theft Coverage:

This is to protect the HOA from loss by a person handling the association’s funds that are made up of the monthly fees. This coverage is required by law in some states.

Directors and Officers Coverage:

Since the HOA is under the auspices of a board of directors, this is an important piece of comprehensive coverage.

If unit owners are not happy with decisions of the board and feel they are being negligent regarding the best interests of the HOA, they can sue for damages. Directors and Officers coverage will respond to such claims.

Water Damage Coverage:

Since an HOA is responsible for the structure of the building, claims related to water damage fall under its responsibility.

Leaking or burst pipes could cause damage to several units. Coverage can be provided on the property policy.

However, a large number of claims can drive up the ratio of paid-out losses to premium, so the best management technique to use here is prevention. Inspection and maintenance of pipes prior to the cold weather could be a much less expensive way to prevent claims.

These are just some of the areas that my office can help you with when trying to place coverage for your HOA

Inflation – who needs it?

You just end up paying more dough for the same loot
.
When inflation is to our disadvantage, we feel it everywhere.

It hits our pocketbooks at the grocery store and gas pump, and we may not take as many vacations or have as many toys.

But there is one place where you don’t have to feel the ill effects of the rise and fall of inflation. That place is your insurance policy.

Did you know that your property limit can be adjusted to keep up with inflation so that you have enough coverage in case of a total loss?
There is a provision in both personal and commercial policies to adjust the building insurance limit based on a chosen percentage of the current year’s building value.

It is called an inflation guard.

Depending on your insurance company, you can use this to choose between 2% and 8% of the building limit.

The following example illustrates how the inflation guard works.

In year one, if you have a $100,000 building limit with a $1,000 deductible and the building is a total loss, you would pay the first thousand and the insurance carrier would give you a check for $99,000.

In year two, if you carry the same $100,000 limit and have the same $1,000 deductible and there has been a 4% spike in inflation, if your building is a total loss, you would pay your deductible and the carrier would still pay you $99,000.

You would make up the difference of any additional costs after that to replace your property.

However, if there was a 4% inflation guard on the policy, the building limit would automatically increase to $104,000 to account for the increased cost to replace your home or building.

In a total loss, you would pay your deductible and the insurance company would give you a check for $103,000.

Now that’s peace of mind.

The days of having one deductible for all property insurance claims are gone.

Insurance companies have introduced varied deductibles, depending on the type of claim.

Wind/hail deductibles are showing up more frequently on both personal and business insurance policies, thanks to the number of claims from windstorms, hailstorms and hurricanes in the last decade.

If you have any type of claim other than those listed above, you would pay your chosen standard deductible, perhaps $1,000.

When it comes to a wind or hail claim, the deductible is calculated a little differently. It is a percentage of your building limit.

The percentage can be from 2% to 5% of that building limit.

This means that if you have a $100,000 building with a 5% wind/hail deductible, your deductible becomes $5,000 rather than $1,000 for that claim.

A “named storm endorsement” is another option a carrier uses, depending on the hurricane proneness of the state. Here, the percentage deductible would apply for damage as a result of a named hurricane by the National Weather Service. In the event of wind or hail damage in a non-named storm, your deductible goes back to your standard deductible.

The cover or declaration page of your policy will list whether or not there is a separate wind/hail deductible and, if there is, the percentage. Have my office take the time to explain the deductibles on your policy and how they would affect you at the time of a claim.

When it comes to working with an insurance agent, more isn’t better.

Unlike medicine, where a second opinion is often a prudent course of action, insurance is one area where two minds are rarely better than one.

Following are some of the dangers of working with multiple agents:

Higher Prices: The threat to your bottom line is very real. Multiple agents increase the risk of purchasing redundant coverage options. An agent who is familiar with all your insurance needs is able to provide comprehensive coverage without duplicating other coverage options. For example, rather than having to write an entirely new policy, it may be possible to add a rider to an existing policy.

Gaps in Coverage: As if paying for duplicate coverage wasn’t a sufficient threat, the risk of leaving out important coverage is especially high when working with multiple agents. Finding a gap in coverage is one lesson most small-business owners can’t afford.

Claim Complexity: Having a trusted agent to turn to in the event of a claim is often as critical as the terms of coverage. Not only is the agent able to expedite filing the proper forms and to inform you of progress, but he or she becomes instrumental in coordinating the process when multiple policies are impacted.

Lack of Continuity: The more policies, the greater the likelihood of forgetting to pay a premium. When working with a single agent, everything you need is in one place – from annual updates of inventory to a single source of contact in the event of an emergency.