Insurable Property Values
Aren’t Always by the Book

When your insured property is damaged, one of the first duties you’ll face is providing your insurance carrier an itemized statement of loss. The company will use this inventory to develop a fair valuation for paying your claim.

But how do you know what a fair insurable value is for your property? Many of the typical business valuation methods might prove to be inadequate in determining the value that needs to be covered by your insurance. For example, “book value” (meaning the valuations you carry on your financial records) is determined primarily by tax considerations and rules – not by the true current value of the items.

Consider personal computers. Under tax laws, the price you paid for your computer is typically depreciated over three to seven years. Yet the actual “street price” of a personal computer often nears zero in as little as two years, due to obsolescence and ongoing price wars among computer manufacturers.

Building values as carried on your books also can vary widely from the proper amount for which the building should be insured.

You need to base proper insurable values solely on today’s repair and/or replacement costs. We can recommend methods for determining these costs in ways that meet your policy provisions and requirements. And, once you feel you’ve arrived at fair and current values for your property, we can help make sure you have enough coverage to meet your needs.

Phone Company Has Fire; You Get Burned

Over the years, you’ve likely read about such incidents in the newspapers: A local phone company location catches fire, gets hit by a tornado or struck by lightning, and businesses and homes throughout the area lose phone service.

Inconvenient? No doubt. But if your business depends on incoming phone service, particularly for product orders and customer service, how much might such an outage cost you?

The bad news is that yes, such outages happen. The good news is that under certain circumstances, you can add coverage for these incidents to your insurance program. Generally, the coverage will apply only if the outage is due to a cause such as fire, lightning, or windstorm, covered by the policy. The coverage can cover loss of cellular service if the towers which carry cellular signals have been damaged or destroyed by storms and lightning.

And additional sources of disruptions to your business, such as loss of utilities or water supply, also might be available.

Contact us for advice on whether you should add coverage for these types of losses to your current insurance package.

If a Client Gets Hurt

It’s a nightmare that’s befallen many businesses.

One of your best clients has just made a significant purchase and it seems the world couldn’t be a better place. Then, on her way across the sidewalk to her car, trouble strikes. A sudden trip, a slip and fall, and your happy client is now hurt, angry and a potential plaintiff in a lawsuit against your business – all in the span of a few disastrous seconds.

A suit against your liability insurance is often the first thought. But as good as your liability coverage is, it focuses on settling the potential or actual lawsuit. There’s another policy provision designed to try and avoid the lawsuit altogether. Known as “medical payments” or “medical expenses,” it provides on-the-scene “first aid” coverage to quickly comfort the injured person and get her immediate and effective treatment.

A typical policy provision states: “We will make these payments regardless of fault. These payments will not exceed the applicable limit of insurance. We will pay reasonable expenses for: (1) First aid administered at the time of an accident; (2) Necessary medical, surgical, x-ray, and dental services, including prosthetic devices; and (3) Necessary ambulance, hospital, professional nursing and funeral services.”

Notice that this language clearly illustrates both what the policy will pay for and the fact it’s meant to be offered immediately. One of its best features is the “regardless of fault” provision. This means you can get the injured persons’ immediate treatment bills paid promptly without the often inflammatory discussion over the accident that can lead to hurt feelings and lawsuits. And because you don’t admit fault by offering the benefits under your medical payments, you don’t prejudice in any way you or your insurance company’s ability to contest any lawsuit that might later seek to assign blame.

Talk with us about making sure you have liability and medical payments coverage.

Driver Difficulties

Nationwide, drivers are having problems with everything from rising gas prices to increased road construction. However, drivers in New York City are struggling with a unique problem that threatens to make the city’s auto insurance rates the nation’s highest.

According to a recent Insurance Research Council (IRC) study, New York has incurred a significant increase in auto insurance fraud.

In 2000, the average amount paid for auto claims in New York was $6,898 — a 20% year-to-year increase. The IRC estimates that one in four auto claims in the city involves some fraud. This ranges from exaggeration of medical expenses, including unnecessary treatments, to other padding claims-related costs.

New York claimants have reported an extraordinarily high use of medical resources, especially in the general New York City area where claimants report more injuries. Many of these claims involve sprains and strains that result in special testing. Claimants there also are four times more likely to hire a lawyer to pursue their claim. In total, drivers in New York are facing significant increases in their auto insurance premiums.

Don’t Let Your Income Slip When You Do

Chances are if you’re a small business, you started with long days, longer nights and 80-hour weeks. Sole proprietors are fully aware of the truth of the old saying: “When you are self-employed, you work for the toughest boss in the world!”

But what if you’re injured or unable to work for an extended period? Unless your business has reached the point that it can run itself, you face a financial crunch. You need a fallback plan for income, savings, pension plan contributions, and insurance premiums.

There is an answer. Talk with us about disability income coverage. As the name suggests, this coverage is designed to provide you with some continuing income while you’re disabled. As with all types of insurance, there are many variations in amounts, length of time benefits will be paid, and what types of accidents or illnesses will trigger your coverage. We’ll help you choose the combination of coverage that will best serve your needs.

If you take a fall, don’t risk breaking your paycheck along with your leg.

Basic Protection

The number and types of insurance coverages can confuse many business owners. A good package policy – a single policy that incorporates several basic insurance protections – is a good starting place. Two basic coverages typically are included in a package policy.

• Property – which offers coverage for buildings and contents and may include comprehensive coverage
   
• General liability – which covers legal liability resulting from owning a business and protects you and your company if a third party suffers a bodily injury or property damage due to your work or products

With these two coverages as the foundation, the package can be expanded to include other coverages tailored to your business, such as business income, boiler and machinery, and crime. Although no package will cover all business exposures (workers compensation is one type of insurance that usually must be written separately), it does conveniently offer business owners broad coverage in a single policy. If you’d like to find out the advantages that our package policies offer your business, give one of our business insurance experts a call.

Health Insurance
Cost Factors

Employers, large and small, are attempting to stem the tide of increasing health care costs. To manage these costs effectively, it’s important to identify the factors that contribute to the increases. That’s the conclusion of the American Association of Health Plans (AAHP) took in completing its new study, “The Factors Fueling Rising Healthcare Costs.” Most of the factors that led to the average 13.7% increase last year are well known. However, some factors were less obvious. Among these factors were:

• Government mandates and regulations, which each added more than $10 billion to annual premiums.
   
• Litigation and risk management, mostly in the form of defense medicine, accounted for more than $5 billion last year
   
• Fraud and abuse of the health care system added another $3 billion to annual health care premiums.

Collectively, the cost of these items alone could’ve insured an additional 6.8 million Americans, according to the AAHP study.

Handle Dishonesty Claims
with Care

Employee dishonesty claims are growing. Industry experts estimate that such claims cost businesses about $50 billion annually. Moreover, an estimated 75% of employee theft goes undetected.

In the year 2000, the insurance industry paid about $550 million of the total $50 billion employee theft losses. In many cases, insurance isn’t used to offset these losses because companies attribute much of the loss to outside theft. Businesses that suspect employee dishonesty frequently are unable to prove guilt, and insurers require guilt to be proven and documented in employee dishonesty claims. The ramifications of accusing the wrong person of employee dishonesty can be costly so many employers prefer not to pursue the claim.

Companies should retain legal counsel and use careful judgment when making such accusations in order to avoid potential lawsuits.