The loss of a key employee can be a major blow to any business if that person is the primary contact for customers and suppliers, or if he or she fills important management roles of the business. Loss of the key person may also decrease efficiencies in running the business and result in a loss of capital.

Losses caused by the death of a key employee are insurable through coverage called key employee life.  Here are a few things you should know about this coverage:

• Key employee life pays a death benefit to the company if the key employee dies.
• The policies are normally owned by the company; thus the company pays the premiums and is the beneficiary. 
• Key employee life policies will compensate the business against covered losses that result from that person’s death or disability.
• The amount and cost of insurance needed for a particular business depends on the situation as well as the age, health, and role of the key employee.

If you are interested in this coverage for your company, please contact us for a consultation.








What you should know about D&O coverage:

• Coverage for directors and officers is only for non-bodily injury claims.  This includes claims of financial loss resulting from mismanagement.
• D&O coverage typically excludes intentional dishonest acts as well as property damage claims.
• D&O policies may be broadened to include coverage for employment practices liability.
• There are no “standard” D&O policies.  Many versions are available, thus it is essential to review the policy wordings and endorsements with professional advisors, including legal counsel, to ensure the coverage you are acquiring is suitable for your needs.

There are a variety of D&O coverages available, 
including the following:

Corporate reimbursement coverage indemnifies directors and officers of an organization for claims resulting from their acts on behalf of the organization.  The corporate charter or by-laws usually state the obligation for the corporate organization to indemnify its directors and officers.  In some cases it is mandated by state statute.

Side-A coverage provides D&O coverage for personal liability when directors and officers are not indemnified by the firm. This coverage is needed when the corporation is either financially unable to indemnify its directors and officers or when it is prohibited from doing so.

Entity coverage is designed to cover the organization directly in addition to its directors and officers.


Source:  www.irmi.com 

Have you considered how you would manage if a fire or other disaster damaged your business premises?  To quickly resume business after a disaster, business interruption insurance is key.  Here are a few things you should know about this essential coverage:

• Business interruption typically covers loss of income and continued business operation expenses.

• There is generally a 48-hour waiting period after the loss before coverage is effective

• Think about the amount of time you will need to get your business up and running again, and consult with your agent to make sure your limits are sufficient.

 

In the event of a natural or man-made disaster, have a plan in place to execute the recovery of your business.  Here are some tips for developing a plan:

• Client retention plan
Decide on a communications strategy to prevent loss of customers. Post notices outside your premises; contact clients by phone, e-mail, or regular mail; place a notice in local newspapers.

• Back-up resources
Consider the resources you may need during an emergency.  Do you need a back-up source of power? Do you have a back-up communications system?

• Business-to-business coordination
Even if your business escapes the physical damage of a disaster, your operations may suffer significant losses due to the inability of suppliers to deliver goods or services, or from a reduction in customers. Businesses should communicate with their suppliers and markets (especially if they are selling to a business as a supplier) about their disaster preparedness and recovery plans so that everyone is prepared.

• Protect your building
Conduct regular inspections of your business property to identify potential hazards.  Look for signs of defective electrical wiring, leaky gas connections, and structural defects.  By identifying hazards ahead of time and making necessary repairs, you can reduce the threat of injury or death and minimize property damage in the event of a disaster.  

• Continued business activity
Identify critical business activities and the resources needed to support them. If you cannot afford to shut down your operations, even temporarily, determine what you would require to run the business at another location.

For guidance on generating your business recovery plan, check out the Business Recovery Checklist at www.fema.gov.


 

Employee or claimant fraud accounts for about 20 percent of all workers compensation claims paid.* Protect your company from costly claims by recognizing the following signs of insurance fraud:

• There is no witnesses of the accident or it happened outside normal working hours.
  

• It is difficult or impossible to reach the employee.

• The accident wasn’t reported until days after it happened.

• The employee changes his or her story about the accident.

• The employee shows no interest in returning to work even when accommodations to the injury are made. 

• The employee frequently changes physicians.
  

•  The employee has a past history of workers compensation claims.

In times of economic uncertainty, many employers face the possibility of workforce reductions. Though increases in layoffs could lead to an increase in workers compensation costs, there are preventative measures that can be taken. These include preparation prior to the layoff, appropriate assistance for affected employees, and proper management of records. Careful planning and handling of workforce reductions can help alleviate the problems that may arise and assist employees with the transition to new employment.

Preparation Prior to the Layoff

• Be familiar with state unemployment insurance laws, including the levels and durations of benefits.
• Investigate state programs available to employees that may offset workers compensation costs.
• Meet with your insurance broker to review pending claims and identify those that might become problems. 
• Backup employee records and store them in secure locations. Claim records should be updated with the latest available information.
• Create a video record of conditions in the building prior to the layoff to easily demonstrate to a court what the work environment was like. 
• Use exit interviews to document employees’ physical condition at the time of termination.

Appropriate Assistance for Affected Employees

When layoffs occur, the company should handle them as sensitively as possible. Losing a job is a traumatic experience for anyone. Reduce the chances that a worker will seek retribution by helping affected employees:

• Offer resume preparation or outplacement services. 
• Offer employee assistance programs for those who need emotional support.
• If the company can afford the expense, offer severance payments to the employees in return for their written agreement to forego any future claims against the company. 
• Make sure contingency plans are in place should any of the employees become violent at the time of the layoff or later

Proper Record Management

• Ask the broker and the insurance company to coordinate claims handling through one office and one senior claims adjuster.
• Request that the insurer assign the defense of all cases to one law firm.
• Relevant records should be made easily accessible to the attorneys and any medical specialists the firm may hire. Relevant records include videos, employee files, job descriptions, and exit questionnaires.
• Identify key personnel who may be available to testify regarding job requirements and conditions. Have a list of their names and contact information available for the attorneys.

Employment Practices Liability Insurance, known as EPLI, can protect your business against claims made by potential hires, employees currently on your payroll, and terminated employees.

An EPLI policy will protect your company against claims of:

• Wrongful termination
• Employment-related emotional distress and invasion of privacy
• Defamation
• Retaliatory/constructive discharge
• Sexual harassment and discrimination
• Workplace torts such as slander

EPLI coverage generally includes the cost to defend against the charges plus any damages you are ordered to pay. Depending on your business needs, it might make sense to purchase EPLI coverage as part of your company officers’ liability insurance since company officials can be named in lawsuits against the business.




Risky Business
Why You Need Employment Practices Liability Insurance

Workplace discrimination claims can affect businesses of all types.  For example:

• Thirteen current or former computer company employees claimed employment discrimination on the basis of race and national origin. Employees claimed they were treated unequally and subjected to a hostile work environment.  Amount of settlement: $635,000 (salary increases, enhanced promotional activities).

• Eight employees filed a class action suit alleging sex discrimination by their employer in the handling of wages, promotions, pregnancy leaves, and other conditions of employment. Amount of settlement: $600,000 (plus $5 million in legal fees).

• A senior regional attorney sued a securities dealer claiming age discrimination and retaliation. He claimed he was unfairly terminated for advice he gave to a co-worker regarding his employment rights. Amount of verdict: $443,000.

Up to half of all businesses will face a workplace discrimination lawsuit at some point. Is your business prepared?
Protect Your Business
As an employer, you do everything you can to treat your employees fairly. However, you can be held liable for the actions of your employees or even vendors and customers. And with new employment-related regulations being added to the books frequently, it can be difficult to understand exactly what you are expected to do.

It is important to make sure you remain in compliance with laws governing treatment of employees. But there is an added layer of protection you can obtain: Employment Practices Liability Insurance, or EPLI.

Are all your eggs in one basket?

While diversity may be the way to go when investing, it is not necessarily the most practical course of action when buying commercial property and casualty insurance.

The following is from firms who have combined multiple lines of insurance with one commercial carrier:
• 89 percent of the firms who saw savings were able to cut the overall cost of their risk management program by a minimum of 4 percent.
• Approximately 35 percent realized savings of 7 to 10 percent.

By combining all of your commercial insurance with one company, you receive a more cost-effective policy than if you were to purchase each product individually from different companies. Not only is it a matter of cost savings and convenience, but having your coverage with one company can also simplify the claims process should a loss occur. So, unlike an investment portfolio where it is better to spread the risk around, your commercial insurance policies are most effective when you keep them all in the same place. If some of your policies are not combined, work with your independent agent to evaluate all of your exposures and the most effective company for your business insurance needs.

FIVE Ways to Control Workers Compensation Costs

Workers compensation is essential to protect your employees and your company. To sharpen your company’s competitive edge, it’s important to control costs. By taking a fresh look at your company’s approach to safety, hiring, classification, and claims management, you may find new ways to keep costs under control. Here are some tips:

1. Thoroughly train new employees:
Nearly a third of workers compensation claims result from accidents with new employees. Evaluate your orientation program for ways to improve new employee training.

2. Make safety a top priority:
The best way to keep costs down is to not incur claims. Create a safety culture throughout the company, and engage employees directly in the effort. Solicit ideas from employees on how to create a safer workplace.

3. Pre-screen employees:
An investment in pre-employment drug screening can save a significant amount in claims down the road. Statistics show that workers who are substance abusers are far more likely to have an on-the-job accident.

4. Manage claims proactively:
Monitor an injured worker’s condition so they can return to work as quickly as possible. If an injured employee rejoins your workforce on light duty, you can reduce the claim amount.

5. Make sure employees are classified properly:
If employees are misclassified, you may not have the coverage you need, which can result in large audits.

Many vacationers will be renting a car this summer, but often don’t start thinking about rental car insurance until they get to the counter. This can result in some costly mistakes. Faced with a number of choices, some renters either purchase all of the coverage, or they decline the insurance without knowing if they are covered by other policies. This can result in either wasting money by purchasing unnecessary coverage or having gaps in coverage.

Before renting a car, you should make two phone calls: one to your insurance agent or company representative, and another to the credit card company you will be using to pay for the rental car. 

Rental car insurance offers four important coverages:

Loss Damage Waiver (LDW), also referred to as collision damage waiver, is not technically an insurance product—it relieves or “waives” renters of financial responsibility if a rental car is damaged or stolen.

Liability Protection provides financial protection from lawsuits in the event you are sued following an accident involving a rental car.

Personal Effects Coverage provides insurance protection for the theft of items in your car.

Personal Accident Insurance will cover you and your passengers for medical and ambulance bills incurred by injuries in an automobile accident.


Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Although most auto insurance provides property, liability, and medical coverage, many states have different requirements. Here are typical coverages found in an auto policy:

Liability:
Pays for damages you cause to other people and their property. Higher limits than what you currently have may be available.

Medical Payments:
Provides protection for the insured, family members, and passengers in the insured’s auto for injuries sustained in an accident regardless of who was at fault. Also provides reasonable expenses for necessary medical and funeral services incurred. Higher limits than what you currently have may be available.

Personal Injury Protection:
Provides coverage for injury, death, loss of services, and loss of income suffered by you, your covered passengers, or covered family members (for those who reside in states with no-fault insurance laws).

Uninsured Motorist Coverage:
Automobile coverage designed to provide protection for the insured if involved in an accident where an uninsured motorist is at fault. Limits usually match liability coverage.

Underinsured Motorist Coverage:
Auto coverage that pays the difference between the insured’s actual damages for bodily injury and the amount of liability insurance carried by the at-fault driver. Limits usually match liability coverage.

Collision Coverage:
Protects you from loss caused by damage to your auto by collision with another object or vehicle or the overturn of the auto.

Comprehensive:
Pays for the losses to your auto OTHER than collision. Included is damage or loss to your auto caused by fire, theft, glass breakage, falling objects, and vandalism.

Towing and Labor:
This endorsement offers reimbursement for the cost of having a vehicle towed.  Labor costs to repair a vehicle are not covered. Higher limits than what you currently have may be available.

Rental Reimbursement/Loss of Use:
Loss of use covers the daily cost to rent a vehicle while yours is out of commission due to covered loss.

Auto Loan/Lease Coverage:
Coverage may be extended for the difference between the unpaid amount due on the loan or lease of a new auto and the actual cash value at the time of loss.

Audio, Visual, and Data Electronic Equipment:
Tapes, records, discs, and other media can be included on the auto policy.

Four Golden Rules to Buying Auto Insurance

Simplify the insurance selection process and ensure you have adequate coverage with these tips:

      1.  Consider higher limits of coverage than the state-required limits.  If you choose the minimum coverage required by your state, you may not be fully covered in an accident.  For example, if your property damage coverage is $15,000 and you cause $25,000 worth of damage, you’ll have to pay the remaining $10,000 out of your own wallet.

     2.  Tell it like it is. Be completely up-front and honest about your driving history. If you fail to disclose past accidents, speeding tickets, or other moving violations, the insurance company will not be able to give you an accurate quote.  As soon as the insurance company checks your driving record, they will adjust the price to reflect your violations.

     3.  Pay attention to the total package.  Consider price, coverage, convenience, and customer service.  Decide what’s most important to you, and communicate this with your insurance agent so they can help you choose the company that is right for you. 

    4.  Don’t double up on coverage.  Before you settle on a policy, consider any other auto coverage you may have so you don’t duplicate coverage.  For example, if you are a member of AAA, your membership probably covers towing costs if you break-down.  Therefore, there’s no need for a policy that includes roadside assistance coverage.

As your insurance agent, we are here to guide you in selecting your insurance coverage.  Please call us today and we will help ensure you have the right coverage for your needs.  



Once you finish documenting your inventory, either print out the files or burn a CD.  Keep a copy in a safety deposit box or have a friend store it. In case your home is severely damaged, or if you experience a hard-drive crash, it is critical to keep a second copy of your home inventory off-premises.

Finally, remember to update your home inventory annually to add newly acquired items and remove items you no longer own.

Scheduled Personal Property
Case Study: Computer Insurance You Really Need

When something happens to your laptop, will your homeowner’s insurance help pay for a new one? If you have a standard policy form, maybe not. The standard policy covers personal property of all types for specific causes of loss. This includes things like fire, lightning, explosion, windstorm, and theft. It does not list the other common causes of computer loss. If someone steals a laptop from a dorm room, the policy will provide coverage. If the student drops it and cracks the screen, there is no coverage.

For a relatively small cost, homeowners, renters, and students can insure their important but delicate belongings against thefts and accidents.

The same is true for other high-priced personal property. The relatively small cost of Scheduled Personal Property coverage for your jewelry, antiques, collections, fine art, and so on is well worth the peace of mind. Call us to see if you can benefit from adding this coverage for your valuable belongings.



Insuring Your Student Away at College

Sending a child off to college is always an exciting and anxious time for parents. They worry about their child’s safety, roommates, and independent living. Between making sure that textbooks and supplies have been purchased, tuition bills paid, and course registrations completed, it’s natural that parents won’t think about insurance considerations. Here are a few items to think about:

1. Your student's age and status
A homeowner’s insurance policy may not cover a part-time student or one over a certain age. For example, policies often state that a person has coverage if he or she is a full-time student and was a resident of the policyholder’s household before moving out to attend school. They also limit coverage to students unless they are either under the age of 24 and related to the policyholder or in the policyholder’s care and under the age of 21.

2. Driving at school
If the student brings a car to college and the parents’ auto insurance policy lists it, the student will have coverage for its use. If students buy their own policy, make sure liability coverage is purchased in an amount at least equal to what the parents have. Purchasing only the minimum limits required by state law could mean owing a large amount out of pocket if an accident occurs. Coverage is typically in place on the parent’s policy if a student occasionally borrows someone else’s car.

3. Personal belongings
A typical policy covers the student’s belongings while at college, but limits coverage to 10% of the insurance amount covering the parents’ personal property. For example, if the policy shows a limit of $100,000 for coverage of personal property, it will cover the student’s property up to a maximum of $10,000. If this amount of insurance is too low, you’ll want to consider higher limits.

4. Laptop
Many colleges require students to own a laptop computer. As mentioned previously, make sure to schedule your student’s laptop to cover against dropping the computer, spilling a beverage on it, or incurring damage to its circuitry from a power surge.

5. Liability
The homeowner’s policy will typically cover students’ liability for any injuries or damages they may cause to others while at school.

Apples to Oranges: Not All Insurance Policies are the Same

When it comes to auto insurance policies, there are countless options on the market. However, not all policies are created equal. While you may be tempted to buy the insurance policy with the lowest price tag, this might end up costing you in the long-run. Here are a few tips for choosing the best policy:

• Compare limits - make sure yours are adequate
• Protect against gaps in coverage (e.g. umbrella policy)
• Customize your policy (limits, discounts)
• Read the fine print
• Work with a professional

We are here to make sure your auto policy does its job: keeps you protected in case of an accident. As independent agents, we can do the shopping for you, apply applicable discounts, and - most importantly - make sure you have the right policy for your situation.

Consider Four Key Areas When Buying Homeowners Insurance

You buy homeowners insurance to protect your biggest asset, so it’s important to purchase enough coverage to suit your needs. By looking at a few key factors, you could end up saving yourself a lot of money and heartache should you ever have to make a major homeowners insurance claim. Be smart and ask yourself the following four questions when considering how much coverage to purchase.

1. How much will it cost to rebuild?
2. How much will it cost to replace my personal possessions?
3. Will I have any additional living expenses as a result of an insured disaster that damages my home?
4. How much coverage do I have in the event I am named in a lawsuit for bodily injury or property damage caused to others?

Four Reasons You Might Want to Get Under an Umbrella

Umbrella policies provide additional insurance that takes over when a claim uses up all of the homeowners or auto insurance. They can even cover some losses that home and auto insurance do not cover. They provide insurance amounts as low as $1,000,000 and may provide $5,000,000 or more. And they are not just for wealthy people. Here are four situations where umbrella policies are vital:

1. Auto Insurance
A driver loses control on icy pavement and strikes another car. The other driver suffers serious injuries tallying up to $900,000. The at-fault driver has an auto insurance policy that covers $250,000 for injuries to any one person. If he has an umbrella with a $1,000,000 limit, it will pay the remaining $650,000.

2. Homeowners insurance
A homeowner has insurance that covers her liability for bodily injuries to others up to $300,000 per accident. Three neighbor children drown in her swimming pool. The neighbor’s estate sues her for $1,500,000. Her homeowner’s insurance will pay $300,000; but if she doesn’t have an umbrella, she is responsible for the remaining $1,200,000.

3. Boats
A man has a boat insurance policy that covers his liability for injuries to others up to $300,000. He loans his boat to a friend for the weekend. His friend is wreckless and plows into another boat. The survivors and the estates of the deceased sue the driver and the boat owner. The court finds the owner liable for $1,000,000 of the judgment. His boat policy pays $300,000 but he is responsible for $700,000 because he didn’t have an umbrella policy.

4. Personal injury
A woman loudly repeats a rumor she heard about her neighbor. The neighbor sues her for defamation of character and wins $500,000. The woman’s homeowners insurance does not cover defamation, but her $1,000,000 umbrella does. After she pays a $250 deductible, her umbrella pays the rest.