Insurance spreads the risk of loss among every policyholder and the insurance company.
The “coinsurance clause” in a Business Property policy reflects the fact that the coverage divides this risk by setting premiums based primarily on the value of the property. Those who insure their property for less than its actual cash value (ACV) or replacement cost will have to pay the uninsured portion of any covered loss out of their own pocket — in other words, “coinsuring” the risk — which encourages policyholders to buy coverage for the full value of their property.
The coinsurance clause usually requires policyholders to insure their property for 80% of its ACV. For example, if the property of your business is worth $500,000, you would need to purchase a $400,000 policy. If a fire caused $300,000 worth of damage, the insurance company would pay $240,000 (80% of $300,000), leaving you to pick up the other $60,000. However, if you had purchased the full $500,000 in ACV coverage — paying a higher premium — the insurer would cover the entire $300,000 claim.
We’d be happy to discuss the benefits that the coinsurance clause offers. Feel free to give us a call.
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Identifying and preventing the incidences that might harm your firm’s reputation can be a challenge at best.
The explosive expansion of Web-based communications and social media has aggravated the risks of reputational damage, while dramatically reducing response time to counter these threats.
According to Reputation Review 2012, a report from Oxford Metrica sponsored by Aon P.L.C., a public company runs an 80% chance of suffering a reputational risk that can cost at least 20% of its equity value in any month over a five-year period. Privately held companies face similar risks.
These exposures can come from a wide variety of sources, from product safety and unhappy customers to regulatory pressures and behavior by managers. Examples include recent massive breaches of consumer data held by major financial institutions, and the effect on companies that faced supply chain disruptions or radiation fears after the Japanese earthquake and tsunami of 2011 — not to mention the impact of that year’s outbreak of listeria in cantaloupes. Although this infection came from a single farm, other producers (and even companies selling different types of melons) suffered a loss of reputation.
With reputational risks coming in various and sometimes unpredictable forms, experts recommend that you help protect yourself by:
- Creating an “early warning system” to monitor print, electronic, and social media for negative references to the company.
- Evaluating whether a negative comment should have a response (not every tweet or Facebook post matters).
- Getting frontline employees involved in responding to reputational threats, rather than having top management and PR staff deal with them.
Our agency’s experts stand ready at any time to help you discuss your risk, review potential scenarios, and then build and test a plan for dealing with events that threaten your reputation.
Having an effective plan to deal with these threats can actually improve your company’s reputation.
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In the controversial Citizens United case, the Supreme Court ruled that corporations have rights similar to those of an individual. It follows that they have identities and are vulnerable to identity theft.
Although insurance offers one way to manage this risk, it might well be a long time before a company discovers the theft — at which point, it would be too late. To avoid or minimize the danger of having your corporate identity stolen, we’d recommend a three-step approach:
- Storing sensitive information. Sensitive files and information (credit card numbers, medical data, Social Security numbers, etc.) might be stored on computers, external drives, filing cabinets, or mobile devices. It’s wise to consolidate and secure this data either physically behind lock and key or by using electronic network security measures. Be sure to train employees on handling, storing, and disposing of this type of information properly.
- Your business documentation. Identity thieves might use highly sophisticated or surprisingly elementary and low-tech techniques for delving into a company’s records and misappropriating them. These might include intercepting paper mail, stealing trash, or physically taking documents. To safeguard this information, determine what records you need to run the business, inventory them, and use electronic statements to limit the amount of mail containing company information. Never share financial details or documents through e-mail!
- Credit reports. Check your company’s credit reports regularly for unusual charges or bills.
The Federal Trade Commission (http://www.business.ftc.gov/documents/bus69-protecting-personal-information-guide-business) provides a variety of resources you can use to help protect your corporate identity and confidential customer information against identity thieves.
Our agency’s professionals would be happy to offer their help — just give us a call.
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If a disaster covered under your Homeowners insurance wrecks your home, you don’t have to couch-surf until repairs are finished.
The standard Homeowners policy will pay for loss of use or Additional Living Expenses (ALE) – such as rental and hotel costs – while your dwelling remains uninhabitable
Check out these guidelines for using this valuable coverage:
- Know the amount of your ALE. The Homeowners policy caps additional expenses as a portion of the Dwelling coverage (usually 20%) and sets a time limit, such as 12 months. If you believe that you’ll need more coverage, increase the amount before disaster strikes.
- Look for comparable digs. Staying in a hotel gets old rapidly, so you’ll want to get settled quickly. However, don’t decide too soon – you’re entitled to stay in a place that’s comparable in size and quality to your house.
- Count all your extra expenses. In addition to the cost of housing, don’t overlook other expenditures – everything from restaurant meals while living in a hotel and fees for boarding pets to the expense of coin-operated laundry and extra mileage for driving further to work.
- Remember that the key word for ALE is “additional.” The insurance company can deduct any money you save from living in temporary housing (such as the amount you would have spent on groceries from your reimbursement for restaurant meals while you’re staying at the hotel).
- Keep your receipts. The insurance company will generally reimburse you for expenses as they’re incurred, rather than paying a lump sum. Keep meticulous records of every expenditure, save all your receipts – and store them in a waterproof, zippered pouch.
For more information on your Additional Living Expenses coverage, please feel free to get in touch with us at any time.
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A lack of maintenance or poor quality maintenance causes thousands of on-the-job accidents every year. What’s more, maintenance workers face significant risks associated with their jobs.
According to the most recent Bureau of Labor Statistics job fatality report, deaths due to poor maintenance rose 14%, year to year, in 2011, the highest level since 2006. Accidents from maintenance have a variety of causes: everything from falls caused by working heights, confined spaces or harsh environments associated with accessing equipment, and shocks and burns if power is not properly isolated, to injuries from moving machine parts, musculoskeletal problems caused by working in awkward spaces and exposure to asbestos and dangerous chemicals.
There are three types of maintenance:
- Routine or preventive maintenance keeps equipment working – such as a scheduled overhaul or replacement.
- Corrective maintenance gets broken equipment up and running again.
- Predictive maintenance uses tests for maintenance that is or will soon be needed.
To make your maintenance activities safer and more productive, follow these guidelines:
- Emphasize planning and scheduling on every maintenance task.
- Invest in affordable technology such as a thermographic camera (around $1,000) to detect variations of temperature that can reveal when a machine motor is not running properly.
- Make sure that supervisors convey the right message consistently. Employees need to be told that accidents happen as a result of short cuts, such as failing to lock out a piece of equipment before performing maintenance.
- Teach workers to intervene. If an employee walks by a piece of equipment that’s making an unusual noise and doesn’t tell their supervisor, it’s the same as ignoring a co-worker who is working unsafely.
- Get employees engaged and accountable. This can lead to culture change which makes safety the responsibility of everyone – not just of the safety and maintenance department.
For more information on maintaining your safety maintenance program, just get in touch with us.
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I recently responded to the LinkedIn question “How can a company attract and maintain top talent?” in this way:
“Although you’ll get many responses about technique and strategy, in my experience that’s just the beginning of the answer. There’s a significant emotional aspect to the question. In the words of the Buddha, “What comes to you comes from you.” So that’s what I’ll focus on in this answer; the emotional blockages that stop things from coming to you. Ask yourself these questions:
- Are you really willing to do what it takes to attract and keep great talent?
- Are you willing to hire somebody better than you? Or even better than their manager?
- Does driving towards excellence scare you? Are you prepared to hire the top 10%?
- Would you fit in this category?
- Is there such a thing as an “overqualified” applicant?
- Are you open to hiring and managing different types of people? Can you hire without baggage?
- Do you make a conscious effort to show people you care – or is this just your self-talk?
- Do you allow employees to make a difference? To stretch? To find the good in their work?
- Do you let go of poor performers, thus making room for more good ones?
- Does leadership give a hoot about people, or simply growing their bottom-line?
- Is this a fun place to work or is the attitude that fun and work don’t mix?
Most importantly, think about your own experience. Why would you work somewhere or stay there? “
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