Better Property? How about Better Coverage?

You’ve been working hard. Things are starting to look up. Your efforts in building a better business are paying off. Upgrades and improvements to your property, an upscale location, newer equipment, and later model vehicles — all are among the signs of a growing, more prosperous business.

As you move up in the world, don’t leave your insurance behind. Coverage valuations and risk management programs that were perfectly adequate in your former situation might prove woefully inadequate in your new circumstances. That’s one of the many reasons we recommend regular reviews and updates to your protection program. For example, new equipment often presents valuation issues that don’t exist for older tools and machinery. Unlike your old faithful truck that you paid off long ago, your new vehicle probably came with a loan attached, and the lien holder is going to ask what type of auto insurance you carry.

Although a good fire actually might have improved the old location, your new digs came with an inch thick lease that we can guarantee contains some serious insurance requirements set by the landlord.

Now might be the perfect time to sit down with us and analyze where your business came from, where you’re going, and how to be certain your coverage stays right there beside you.

What’s Your Risk Tolerance?

Your protection program works most effectively when it reflects your personal willingness to accept a risk.

Geography is one factor in your risk tolerance. Past experience, the size of your business, financial assets at risk — these and many more considerations all affect your willingness to say “Yes, I need to insure that,” or “No thanks, I don’t think that idea is worth the money.” For example, a $10,000 loss that represents a mere nuisance to a national corporation could devastate a small business.

A key part of our service is to help you uncover your unique risk tolerance level and provide solutions, both insurance and risk management, that can address the loss exposures your business faces. After all, if you and the business owner down the street aren’t losing sleep over the same fears, why should you have the same protection program? Give us call.

Insurance Company Ratings: So What?

It’s a tough marketplace and a rough economy. Corporations that everyone assumed were rock solid have suddenly been shown to be paper tigers. Could it happen to your insurance company?

One generally accepted way of checking out the financial health of your current or prospective insurance company is to ask for its Best’s Rating. A.M. Best Co. has been providing ratings of insurance carriers since 1899. Although there are other organizations that offer ratings, Best’s is still the most widely cited.

How does Best rate a company? After evaluating an insurer’s balance sheet strength, operating performance, and business profile, Best measures it against a series of quantitative and qualitative standards. This results in the assignment of one of two types of rating opinions: a Best’s Rating (A++ to F) or a Financial Performance Rating (9 to 1).

These ratings tell whether the carrier with which you’re dealing has sufficient size and assets to comfortably handle your type of business. They also allow you to see how a particular carrier fits with the remainder of your protection program. For example, many business umbrella insurers have set a minimum Best rating requirement that must apply to any other insurance company that provides your basic coverages.

Although a strong Best rating doesn’t guarantee an insurance company’s future financial performance, it’s one benchmark that insurance purchasers can use to determine whether they’re dealing with a carrier who is likely to be there at the time of a claim. If you’d like more detailed information about Best’s rating system, go to www.ambest.com.

For the ratings of your current insurance carriers, both from A.M. Best and other ratings organizations, and the implications of these ratings for your current and future insurance program, give us a call.

Property Exposure: If You Lease, You Might Be Liable

If you’re a tenant, you might feel that you’ve avoided many loss exposures, such as fire damage to the structure, normally associated with ownership of buildings. But have you read your lease lately? Really read it?

Many leases contain extensive insurance requirements that the tenant must agree to maintain. Although these usually include liability arising from the tenant’s actions and responsibility to cover their property for loss, sometimes overlooked is the extent to which the tenant might’ve agreed to cover exposures normally assumed to be the responsibility of the building owner.

For example, in retail shopping areas, there’s often an abundance of external glass windows. Although these are clearly the property of the building owner, many leases transfer any responsibility for damage to the windows to the tenant. The idea is that because the tenant most directly controls the potential loss exposures for the glass (such as vandalism, accidental breakage, and maintenance inspections), the tenant should provide the insurance. Similar reasoning might lead to the tenant being held responsible under the lease for other loss exposures not directly attributable to their own negligence.

If you’re a tenant, now’s the time to pull out that copy of your lease. Review it with your legal counsel to see if there might be language or agreements that need addressing. Then let us review the lease for the insurance implications (and be forewarned — they won’t all be contained in a paragraph titled “insurance”). We then can sit down with you to review what your lease requires, how your current program matches up, and what your options are for making any necessary changes to your protection.

We can help you take ownership of your loss exposures.

Do Your Protection Devices Really Protect?

You set the security alarm every night on your way home. You double-check the window locks and turn the deadbolt in the back door. You often wonder when you notice those sprinkler heads sticking out of the ceiling just what it must look like when all those go off, but you hope you never have to find out. You conscientiously place your cash and valuables in the safe every night at closing. Before turning out the lights, you start the backup routine on your computer.

Congratulations! You’re taking exactly the types of steps that help minimize your chance of losses and improve your opportunities to obtain good insurance at reasonable rates. But how do you know they really work?

It’s frustrating to suffer a loss; it’s even worse when you thought you’d taken steps to prevent it, only to find your precautions failed when you needed them most. Here’s where our risk management professionals can offer exceptional value to your business. For example, although you’re performing regular backups to your computer system, do you double-check these backups to be certain the data are actually there? One systems administrator religiously ran her backup routine every night, only to discover to her horror at the time of a systems crash that every backup tape for the past six months was completely blank; her backup tape drive had been malfunctioning.

Have you tested your security alarm recently to make sure that it actually alerts the police or fire department? Are you sure that your safe truly locks when the door is closed? If you have times when your employees close up instead of you, do you have a checklist procedure to be certain they take all the same steps you would?

Making your protection devices work as hard as you do is just one of our services. Although many firms can sell you insurance, we need to do more than that. We can help minimize the chance of losses occurring in the first place and provide an insurance safety net to catch you when all else fails. Our philosophy is simple: The best claim is the one that never happens. If you agree, give us a call.

Liability Policy Exclusions: Is It in Your Care?

The exclusion of damage to property in the care, custody, or control of an insured business enterprise applies under all standard liability forms. This broad exclusion is a common source of concern to many policyholders. The purpose of the exclusion is to preclude any coverage for damage to property that’s best handled through the exercise of care or through insuring the exposure under some other form of property or inland marine insurance.

The exclusion usually applies to:

• Property owned by, occupied by or rented to the insured;
   
• Property used by the insured; and
   
• Property in the care, custody, or control of the insured.

This exclusion is especially difficult for contractors who do work at their customers’ premises because the premises or equipment might well be deemed to be in the contractor’s care. Instead of depending on general liability coverage, many contractors buy a separate inland marine policy that can cover care, custody, and control loss exposures. We’ll be happy to help you obtain appropriate coverage.