Month: July 2013

Check Coverage Before Hitting the Road in Your RV This Summer

Posted on by shasha insurance

Whether you drive 600 miles a year in your RV (recreational vehicle) or 6,000, you need to have suitable insurance protection before hitting the road. Because insurance policies tailored to the needs posed by motor homes, recreational vehicles, fifth-wheels and/or travel trailers vary from state-to-state and policy-to-policy, it is important to insure your RV with at least the basics.

Most insurance specialists agree that comprehensive coverage is, indeed, a must as it covers most direct, sudden, and accidental losses including those caused by collision, theft, vandalism, fire, smoke, landslide, windstorm, lightning and hail. You may also want coverage for RV awnings, satellite dishes, and other accessories. There are even policies that cover emergency expenses including lodging or travel expenses home if the RV is damaged or destroyed by a covered loss while more than 50 miles away from home.

Look for an insurance policy that provides adequate campsite/vacation liability, coverage for when the RV is parked, and for when you are using the RV as a temporary residence. Because it protects the RV from costly depreciation, total loss replacement coverage may also prove to be useful and is well worth the minimal added cost.. With total loss replacement coverage, the RV owner gets a new RV of similar kind and quality if the vehicle is destroyed within its first five model years. This is unlike standard automobile policies that only pay the actual cash value of the RV at the time it is destroyed. Add replacement cost coverage on personal belongings that are stolen from the RV or destroyed while in the RV and you can rest assured you will be adequately protected.

RV owners should also consider buying a special stationary policy that offers extensive comprehensive and contents coverage if the RV is used as a seasonal or permanent residence. This includes coverage for liability, medical payments to others, and property damage claims caused by an accident for which RV owners may be held liable . Your homeowners or auto insurance policies may not cover exposures related to the use of your RV as a residence – even if just seasonal.

Because such special coverage policies vary from one state to the next and some coverages aren’t offered in all states, it is important to do your homework, or better yet, your “RVwork,” and find a policy that suits your travel needs.

Understanding Directors and Officers (D&O) Liability Insurance

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Directors and Officers Liability insurance, or D&O, covers corporate activities. Because a corporation is legally a person, as are the directors and officers who direct it, D&O serves to protect each from liability associated with various actions and inactions.

But what happens when corporate interests differ from those of these individuals? In short, the coverage is not the same. An indemnity policy protects the corporation, while a D&O policy covers the individual acts of directors and officers. The two types of policies can work hand-in-hand to provide complementary coverage. They can also work apart.

D&O policies do not cover criminal acts and are primarily for civil remedies, mainly damages. First and foremost, D&O policies represent the interests of the shareholders, as a group, and other corporate constituencies in directing the business and affairs of the corporation within the law.

D&O policies offer individual directors and officers the protection they need from personal liability and financial loss stemming from wrongful acts committed while acting as a corporate officer or director. Most policies also cover the liability of the corporate entity itself when the liability is from a claim involving the company’s purchase or sale of securities.

Keep in mind, all companies – those that employ one or more individuals, work with customers, clients, or even competitors – are at risk. Any perceived violation leaves both the directors and officers of the company, as well as the corporate entity itself, at risk for lawsuit and in need of applicable coverage to adequately protect the business as well as the directors and officers involved.

Employment Practices Liability (EPL) can provide additional coverage, acting like an excess policy in an employment situation, and can also involve claims by and against management. Enhanced coverage on a standard D&O may cover EPL, but should be verified with your insurance agent.  Actions including wrongful termination or demotion, breach of contract or agreement, negligent evaluation of an employee’s performance, refusal to hire or promote someone, workplace harassment, failure to follow the company’s personnel manual and more, can fall under EPL.

Insurance experts advise protecting yourself and your business with indemnity or D&O coverage and suggest you understand exactly what your policy covers. Remember, if your D&O policy does not cover EPL, you should consider purchasing EPL coverage, or have it written into your D&O policy.

Don’t Forget to Update Insurance Policies when Moving

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Anyone that has ever moved can attest that the process has a considerable impact on everything from transportation to and from work to how and where free time is spent. When considering a move, one change that’s often overlooked is insurance coverage. Often a move will affect whether or not various insurance coverage policies are still adequate.

Homeowner’s insurance is usually a concern when moving. For the average person, a home will be one of the largest investments they make in their lifetime. What was adequate for previous housing might not apply to the new home. The homeowner will need to carefully assess the differences in their new home versus their previous location to determine if a new policy or transferring previous coverage is best; for example, the new home may be in a flood area or otherwise high-risk area or contain more property to cover. It’s always prudent to research the rates and coverage from several insurance companies.

Auto insurance is also usually impacted in moves further away or closer to employment. A move closer to employment or to a suburb may translate to a lesser risk. Safer driving conditions could mean lower rates. Conversely, a further distance equals a greater amount of driving time. And, this is an equation that insurers view as the driver being a greater risk. A drive that now involves a more congested roadway may also translate to a greater risk. In any event, when an insurer views a driver as a greater risk, higher rates soon follow. In the event that rates are increased from a move, there are a few steps that can help return the premiums to the previous level or at least lower them.The driver might consider increasing the deductible, buying multiple policies through the same insurer for a discount, or installing anti-theft hardware on the vehicle to lower the overall cost of the insurance.

After attending to homeowner’s insurance and vehicle insurance, the next insurance that should be examined is life insurance coverage. How moving affects life insurance coverage might not be so obvious as homeowner’s and vehicle insurance. Those that are upgrading their home or purchasing a home with a much higher price tag will most likely no longer have adequate life insurance. The coverage should ideally be adjusted to account for the increased monetary commitment of a higher mortgage and household expenses. Yes, this is an added cost, but necessary to prevent leaving loved ones unable to maintain the home.

Electrical Insulating Gloves – Give Your Employees a Hand

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Injuries caused by electrical shock are one of the most severe that workers can experience on the job.  According to the National Safety Council more than 1000 employees are killed and 30,000 injured each year from electrical shock.  Many of these injuries involve the hands since they are the most common source of contact with an electrical current.    Electrical current travels through the body causing damage to internal organs and possibly resulting in cardiac arrest.  Such injuries from electrical shock can prove fatal. The best line of protection is to use electrical insulating gloves.

It is important to know that electrical shock can result from contact with low voltage (under 600 volts) as well as high voltage lines (over 600 volts).  The effects of this exposure depends on the amount of current (which is measured in milliamps or amps) flowing through the body, the amount of time it is in the body and the path of the current.  Exposure to 100 milliamps flowing through the body for only 2 seconds can cause death by electrocution.  This is not much current when you consider a hand-held electric drill draws 30 times that amount. OSHA requires that workers in high and low voltage applications wear electrical insulating gloves and that all insulating gloves be electrically tested every six months.  There are several labs in the United States that perform this required testing.

Rubber electrical insulating gloves are rated for their particular application.  Workers should be trained to select gloves for the amount of protection needed against the circuits they are working with.  For example, a Class 1 glove can be used for up to 7,500 volts AC, a Class 2 up to 17,000 volts AC, etc.  It is also important to understand and recognize regulatory standards when it pertains to electrical safety awareness.  These standards are easily accessed on OSHA’s website, www.osha.gov.

Finally, it is imperative that employers have in place an electrical safety program to ensure that all employees are aware of the potential electrical hazards in their locality.  Both qualified and unqualified workers should be trained in avoiding the dangers of working on or near exposed and energized equipment.

Research Shows Side Air Bags Can Save Lives

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In a recent study, The Insurance Institute for Highway Safety estimated that side air bags offering head protection could save the lives of about 2,000 drivers a year if every vehicle were properly equipped. The study was based on federal crash data involving 1997-2004 model year cars involved in crashes from 1999-2004 and 2001-2004 SUVs involved in crashes from 2000-2004.

The agency’s conclusion is based on insurance industry research that shows driver deaths in side-impact collisions dropped by more than 50 percent in SUVs equipped with head-protecting side air bags. The study also found that the risk of death dropped 30 percent in side collisions involving SUVs with side air bags that only offer protection to the chest and abdomen.

In passenger cars struck on the driver’s side, the risk of the driver being killed dropped 37 percent in autos with side air bags that have head protection. The risk of driver death fell 26 percent for cars with side air bags providing just chest and abdomen protection. The researchers discovered that fatality risks were lower across the board in vehicles with side air bags, whether the crash involved older or younger drivers, male or female drivers, and drivers of compact cars or larger passenger vehicles.

The side air bag was introduced in the mid-1990s, and has been credited for allowing motorists to escape serious injuries and death when struck in the side. In a head-on crash, the vehicle’s front-end absorbs most of the impact. However, a motorist struck in the side has very little protection without the side air bags.

Side-impact crashes are a major concern. In 2004, the government estimated that 9,270 people were killed in these types of crashes, which amounted to almost 30 percent of traffic deaths reported that year.

Although federal regulations don’t require side airbags in passenger vehicles, more and more manufacturers are installing them as standard equipment. This is due primarily to a 2003 voluntary agreement among automakers to improve occupant protection in side impacts for SUVs and pickups. The agreement is supposed to result in all cars, SUVs, and pickups having side airbags with head protection by 2010.

The auto industry has been keeping pace, and almost four of every five new car and SUV models already have standard or optional side airbags that include head protection. This is a significant increase since side airbags were introduced in the mid-1990s. If you would like model-by-model information on side airbag availability in 1996-2006 models, log on to iihs.org/ratings/ side_airbags/side_airbags.aspx. 

Is Your Homeowner’s Coverage a Mystery to You?

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If you feel in a quandary when you look at your homeowner’s insurance, take heart; you are not alone. In fact, a recent study conducted by Harris Interactive for Travelers Insurance shows that a large number of American homeowners are unsure of their coverage specifics. Many of these homeowners are underinsured and the smallest disaster could send them into a financial hardship.

The researchers questioned more than 1,300 homeowners to determine exactly what they knew about their coverage. They also asked the study participants how often they reviewed their policy to ensure they maintained appropriate coverage and how they conducted their review.  According to the survey data, more than 44 percent of those surveyed had not examined their insurance coverage in the past year. Some respondents had not reviewed their insurance policy in the last 10 years.

The “Travelers In-synch Homeowner’s Insurance Study” also indicated that nearly 27 percent of these homeowners weren’t sure whether their policy would cover the cost of rebuilding their home. Thirty-six percent didn’t know whether their policy would cover damage caused by a hurricane. Forty-two percent were unsure if they had earthquake coverage. Twenty-six percent didn’t know if they had coverage against flood damage, and 37 percent didn’t know whether their policy would cover a prolonged hotel stay if their home were damaged.

Many items impact the amount of homeowner’s coverage you need. That’s why it is important to review your coverage frequently. Here are some criteria to use in your review:

·   Have you recently remodeled your home?
If you’ve improved your home, chances are you’ve increased its estimated replacement cost.

·   Has the inflation rate increased since your home was last appraised?
Certain conditions, such as severe weather, can increase the demand for labor and materials, which raises costs beyond the normal inflation level. It is important to update your coverage each year to account for changing inflation.

·   What factors influence building costs in your area?
Replacement costs are directly proportionate to factors, such as the availability of labor, the current demand for labor, and the cost of construction materials. Adjusting your coverage regularly can ensure your policy will provide the money you need to rebuild.

To determine whether you have adequate coverage you should know your home’s estimated replacement cost. Keep in mind that your replacement cost could be higher or lower than your home’s market value. You should also consider the building materials used to construct your home. The more difficult the building materials are to find, the higher your replacement cost. Your coverage needs to reflect these increased costs.

The best way to stay ahead of changing costs is to contact your insurance agent annually to discuss your current coverage and your changing needs. They can help you manage risk by updating your coverage so there won’t be any surprises should your home be damaged.

Should a Project Owner Accept a Contractor’s Builders Risk Insurance Policy?

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While a construction project is underway, who should be responsible for the property insurance on it — the project owner or the general contractor? Often, the contract puts this responsibility on the owner. However, some courts have decided that the contractor actually bears the risk of damage to the property before the owner accepts the completed project. The owner’s policy may not cover some significant perils, such as flood and earth movement, leaving the contractor uninsured for losses they cause. It therefore makes sense for the contractor to obtain builders risk insurance with the broadest coverage possible.

Many contractors carry master builders risk policies that provide automatic coverage for all their projects. The insurance company bases the premium on the values of the projects the policy covers. For the contractor, this has several benefits. The master policy can act as a viable alternative to the owner’s policy, making the contractor’s services more attractive to potential clients. Also, the contractor’s policy may be broader than the owner’s coverage. It may include “differences in conditions” coverage to fill in gaps left by the owner’s policy. For example, the contractor’s policy may cover losses from floods and earth movements such as mudflows. Finally, buying one policy to cover all projects may be more cost-effective than buying individual policies for each job.

Common features of master builders risk policies include:

* Coverage for all projects that begin during the policy term, even if they continue past the term’s end. Depending on the policy, coverage may extend for up to 36 months past expiration.

* The contractor must report the values of all jobs in progress periodically during the policy term. Reports may be due semi-annually, quarterly or monthly. The insurance company calculates the final premium based on the average of the values reported.

* The company may offer the contractor a variety of premium rates, coverages, deductibles, and limits for certain coverages. The company bases these choices on several factors, including the type of construction (wood, steel, concrete, etc.), the fire protection in each project’s location, the intended use of the building (manufacturing, retail, office, etc.), exposure to flood and earthquake, and others.

* Coverage options such as insurance for systems testing, extra expenses and project delays, and reduced deductibles.

 

While the policy may automatically insure most projects, the insurance company may reserve the right to approve some projects before it will provide coverage. For example, the policy may automatically cover all projects with values of $10 million or less and require pre-approval for more expensive jobs. It may require pre-approval of jobs above a certain limit based on the type of construction — for example, all wood frame structures with values exceeding $5 million. It may also require pre-approval for flood coverage for all projects located in special flood hazard areas or earth movement coverage for jobs in locations susceptible to earthquakes. In addition, pre-approval may be required at different times of the year for jobs in certain locations, such as projects in the southeast during hurricane season.

If a project owner is going to rely on the contractor’s builders risk policy, she should review it in advance to ensure that the terms and coverages meet her needs. The contractor should work with his insurance agent to answer any questions about the coverage and to address any deficiencies. Should the owner decide to accept the contractor’s policy, each side must adjust to new responsibilities for things like premium payments, amending the construction contract, providing acceptable evidence of coverage, and reporting values. If handled properly, this arrangement can be advantageous and cost-effective for both owner and contractor.

The CLUE Report: Don’t Be Left Clueless on Insuring Your New Home

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If you don’t properly educate yourself on the home buying process, it can very well be like walking into a minefield. Most buyers at least have a novice understanding on areas like their credit, pre-approval, a home inspection, and so forth. However, most buyers don’t have a clue what a CLUE report is, much less what an important element it is when buying and insuring a new home. Considering that around 90% of all insurers underwriting homeowner’s insurance subscribe to the CLUE service, it’s certainly something that you should know about.

What Is CLUE?

The Comprehensive Loss Underwriting Exchange, or CLUE, is a database that allows auto and homeowner insurers to exchange information about property loss claims. Unless your state specifically requires it, prior notification isn’t required before your information goes into the system. ChoicePoint, one of the largest personal consumer data compilers in the United States, maintains the database. Property loss claims and even inquiries into coverage are entered into the CLUE database.

Your insurer can access the CLUE database when you apply for homeowner’s insurance on your new home. The system will allow them to see any past claims that previous owners filed on the house. It also allows them to see past inquiries on damages, even if there wasn’t a claim filed. You could find yourself in an insurance nightmare if a bad CLUE report causes insurers to be unwilling to provide you with coverage. Furthermore, it’s not just your new home under scrutiny. Old claims that you made on your previous home are also available through the CLUE database and can affect the cost and/or availability of homeowner’s insurance on your new home.

What Do I Do About CLUE?

The best thing you can do to keep CLUE from affecting the cost of your homeowner’s insurance and/or your ability to obtain insurance is to know your rights. Just as with any other credit reports, CLUE reports fall under the Fair Credit Reporting Act, or FCRA. This means that you’re entitled to certain rights, including the following:

* Notification if the insurer intends any adverse actions, such as increasing the cost of your new policy’s premiums or denying your new policy, based on the information they obtained from your CLUE report.

* Get a copy of your insurance scores and the actual CLUE report. The FACT Act is a recent amendment to the FCRA that entitles you to one free copy of your CLUE report per year. Aside from your one free copy, you’re entitled to get another copy of your CLUE report if you’ve had your policy canceled, coverage limited, premiums increased, or an application for insurance denied.

* Dispute incomplete information or inaccuracies within the CLUE report. You can do this at the ChoicePoint website. ChoicePoint is required by law to investigate your dispute. If you aren’t satisfied with the investigation by ChoicePoint, you can file a statement. This statement must be attached to all future reports.

In summary, you can see how a CLUE report can substantially impact your home purchase. Do keep in mind that you can’t obtain a CLUE report on a home that you don’t own yet. This means that you will need to ask your real estate agent to obtain a CLUE report for any property you’re considering purchasing.

An Insurance Policy Can Be Forever

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A risk manager for a large manufacturing company discovered one stormy morning, to his consternation, that his company had been identified as liable for the release of hazardous materials into a local river – not 5 years ago, or even 20, but 32 years ago. Quickly, yet apprehensively, he pulled out his insurance files. Searching through the old policies and records, he at last pulled out a fat stack of papers. After examining them, he leaned back with relief. Safe in the file was a catastrophe liability and property policy that eventually covered the full cost (well into seven figures) of cleaning up the river.

All too often, when these situations face risk managers, they find the insurance policy drawer empty, or filled with worthless policies and records. Increasingly, claims for exposures that were never considered valid a decade ago are now being recognized by the courts as legitimate and insureds are being hit with monetary demands. Often, these unforeseen events are covered by older insurance policies that were written decades ago and had fewer exclusions than policies do today.

Further, having a central repository for all insurance policies and information is especially prudent when a company has a history of mergers and acquisitions, downsizing, office closures and relocations. It is the responsibility of the policyholder to establish the existence of a policy if a claim is submitted for an exposure blamed on an acquired company. If you don’t have the policy, or even just the declaration page, persuading the issuing insurance company that such a policy once existed can be difficult and may require hiring a firm that specializes in searching for old policies. While brokers or agents may retain clients’ policies, most only keep your policy and supporting documents for, at most, seven years after you have ceased to be a client. To be sure you can find that long-ago insurance document when you desperately need it, risk managers should establish a retention system covering the company’s insurance policies.

Storing them is now convenient and inexpensive by scanning them onto digital media where they can be saved and stored on a CD. The cost of preserving these policies is low compared to the potential benefits you could realize in the future by quickly uncovering the exact policy to cover that years-old exposure.

While there is no hard and fast rule on which policies to keep and for how long, some experts suggest keeping all policies indefinitely. In many cases, millions of dollars have been recovered from “old” liability and property policies. Remember, when you purchase insurance, you purchase a promise by the insurer to pay, subject to the conditions and limitations of the policy. And today’s courts are increasingly interpreting policies more broadly than they were originally intended.

But if you don’t want to keep all your polices, consider retaining all liability policies – general liability, commercial auto liability, errors & omissions, officers and directors, workers’ compensation, excess and umbrella, and others. It’s okay to throw away the correspondence related to them at normal intervals per a company retention policy, but keep the vital parts.

Most of the time property policies can be discarded after the expiration of the policy, but should be kept if there are any claims outstanding, such as a business interruption claim. Once in a while, an old claim on a property policy may arise involving structural failures, for instance, of a building that developed after the expiration of the policy. The policy may offer coverage for that claim.

The best advice: Keep all insurance policies forever. You just never know when having that exact one will save your company millions.

Does a Homeowners Policy Cover Your Home-Based Business?

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With both technology and the internet, more and more people are running home-based businesses, either full-time or part-time. But will a homeowner’s policy cover the risks of a home-based business? In nearly every case, the answer is no. The only exception to this might be if a homeowner’s policy has a special endorsement, such as an endorsement to run a day care operation from your home. Yet fewer and fewer companies offer such endorsements. Additionally, some policies may give a very limited amount of coverage for business property, such as a computer. The bottom line is, nearly all homeowners policies clearly exclude business operations and not having a proper coverage in place can leave you with uninsured exposure. This is why you need separate business insurance to cover your home-based business risks.

Home-based business owners may feel that they do not need coverage because nobody steps foot on their premises. The problem is that liability claims often happen away from the business premises. This can include a number of scenarios, including someone taking action for information on your website or someone getting injured from the product or service you provide. Most business policies include coverage for personal injury lawsuits, which means someone takes legal action against you for things like libel or slander. Competitors and customers both can sue a business owner for personal injury. A business policy also covers off-premises injury, such as if someone trips on, slips on, or is injured by any kind of property you take out in the field. It will also cover you during trade shows and usually meets the insurance requirements that some trade shows may require.

From a property standpoint, any business property you may have in your home is usually excluded or has very limited coverage under a homeowners policy. Getting coverage to protect your computers, equipment, furniture, inventory and any other physical assets helps keep your business in operation with minimal disruption and financial loss. A business policy also usually covers loss of income, which is payment for income you did not earn as a result of a loss covered under your policy. Policies may also include coverage for things like valuable papers, damage to property of others, property coverage off-premises and a number of other additional coverages.

A business owner’s policy includes the coverage described above, and is specifically designed to protect the unique interests and property of a business owner. This package policy includes nearly all, if not most, of the coverage you need. However, if you are providing some kind of professional advice, consulting, or other non-tangible professional services, you may also need a professional liability policy. This is also known as Errors & Omissions Insurance. In addition, if you have any employees, you are probably required by law to get Worker’s Compensation insurance. Depending on the type and size of business you own, you may have further insurance needs.

Hoping that your homeowner’s policy is going to cover you in the event of a claim will leave you frustrated if your business experiences a loss. Businesses have a much higher risk than a homeowners policy allows for, and homeowners claims adjusters will quickly deny coverage for business-related claims in the event of a loss. Talk to your insurance agent today to explore your business insurance needs and options.