Uninsured And Underinsured Motorist
Unfortunately, many people wrongly assume that auto and umbrella insurance policies will provide reimbursement for all aspects of an accident on the road. Instead, both of these policies cover your own liability and provide compensation to others in the event that you are responsible for an accident. However, if another driver causes an accident and doesn’t have enough insurance coverage to compensate you, your own auto or umbrella policies won’t be enough.
If another driver doesn’t have enough insurance coverage to pay for your medical bills, you could face extremely high costs or lengthy court battles. However, by purchasing stand-alone uninsured (UM) or underinsured (UIM) motorist coverage—or by adding the coverage as an endorsement to your umbrella policy—you can be fully protected on the road.
Why Isn’t There Coverage?
Auto insurance is required in most states because all drivers on the road essentially put their trust in one another to not get into an accident. As a result, your regular auto insurance policy will reimburse another driver if you are the cause of an accident. In a similar way, umbrella policies provide you with excess coverage for a number of different personal liabilities.
However, if another driver doesn’t have enough coverage to fully pay for the damage of an accident, you could be left to pay the bills yourself.
- Uninsured motorists simply don’t purchase an auto insurance policy. As a result, if they cause an accident, there isn’t a policy in place to reimburse you for medical bills. According to the Insurance Research Council, about 1 in 8 drivers in the United States are completely uninsured.
- Underinsured motorists have an insurance policy, but don’t have a high enough coverage limit to pay for all of the expenses of an accident. Some states only require a small amount of coverage, which won’t be enough to pay all of your medical expenses.
It’s also important to know that hit-and-run accidents—those in which a driver flees—fall into the same category as uninsured motorists, as there is no insurance policy in place to cover the driver’s liability.
To protect yourself from these risks, it’s important to talk to your Robertson Ryan & Associates representative about a stand-alone policy or an endorsement to your umbrella coverage.
Note – It’s also estimated that 4 out of every 10 drivers in the state of Arizona are either uninsured or underinsured.
Coverage Specifics
Without UM or UIM coverage, you’re essentially paying more for the protection of strangers than you are for yourself and your family. And, although uninsured and underinsured drivers are all too common, many people believe that they’re already covered if someone else causes an accident.
UM or UIM policies are available, as are endorsements to umbrella policies that can protect you from uninsured or underinsured drivers. In fact, in many states, you may be required to purchase UM or UIM coverage. However, just like a normal auto policy, there are some aspects of this coverage that you should consider.
Depending on the state, you may only be required to purchase a small amount of UM or UIM coverage. However, since these policies will protect you and your family in the event of an accident, it’s generally a good idea to purchase the same amount of coverage as your regular auto policy. Coverage is also inexpensive, generally costing only 5% of your regular auto insurance premiums.
Contact Us Today
Contact Charlie and his team at Robertson Ryan today at 480-886-6562 to examine your auto insurance coverage and ensure that you and your family are safe on the road.
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General Liability Exposures Every Business Should Know
Almost every organization faces commercial liability exposures. A commercial liability loss exposure is a condition or situation that presents the possibility of an organization becoming legally and financially responsible for injury, harm or damage to another party.
These exposures stem from the kind of work an organization performs and where that work is executed. They also encompass other aspects of business-related circumstances, activities or events that could result in harm to a third party.
Read this article to better understand the most common types of commercial liability loss exposures and potential consequences and for guidance on how the correct insurance policy can reduce the risk to organizations.
Common Types of Commercial Liability Exposure to Know
There are five types of commercial liability exposure that every organization should know. Possible loss exposures that may affect an organization include the following:
- Premises liability—Premises liability describes the risk an organization faces if a customer or client is injured on the premises (e.g., tripping and hurting themselves at the store). Organizations that require customers or clients to be physically present, such as retail stores and landlords, are particularly at risk for these losses and may be held liable for bodily injury or property damage.
- Operational liability—Operations liability exposure refers to the possibility that an organization will be held liable because of bodily injury or property damage that occurs as a result of their ongoing (as opposed to completed) operations. For example, imagine a contractor working on a client’s home. During the course of their work, an employee from the contractor drops a tool, striking a passerby and causing bodily injury and property damage to the home itself.
- Products liability—Products liability refers to the loss exposure an organization faces as a result of manufacturing, distributing or selling an unsafe or defective product. Any organization that makes or sells products is at risk. Associated injuries may occur virtually anywhere in the world once an organization’s products have been manufactured or sold.
- Completed operations liability—The completed operations liability exposure refers to injuries or damages incurred by a third party due to work (including construction work) that has been finished, turned over to the purchaser or client, and/or put to its intended use. For example, an electrical fire caused by faulty wiring at a completed construction project would represent a completed operations exposure for the contractor who completed the work. It should be noted that injuries or damages arising out of completed operations can occur after a business’s relationship with the injured party has ended.
- Contractual Liability—Organizations take on contractual liability loss exposures when they enter into a contract. By agreeing to contractual terms, an organization becomes liable if the other parties involved in the contract believe an organization has not fulfilled its obligations under the agreement.
Potential Consequences of Liability Exposures
In the event of a commercial liability loss, organizations can face a variety of potential consequences, such as:
- Damages—If a court deems an organization responsible for a loss, that organization may be held financially accountable for paying damages to the harmed or injured party.
- Defense costs—The organization may have to pay legal defense costs and the costs associated with the claim.
- Reputational harm—Due to general liability losses, organizations may experience reputational harm, including but not limited to the loss of business, decreased employee retention, and a loss of consumer loyalty and investor trust.
Although commercial liability loss exposures are a risk for every organization, the severity of the consequences can be alleviated with proper insurance policies.
Commercial Liability Insurance
No matter how careful an organization is, there will always be risks associated with commercial liability loss exposures. Therefore, the best way to protect an organization is to purchase commercial general liability coverage (CGL).
CGL policies are designed to cover an organization from liability claims for bodily injury and property damage to third parties. CGL policies have three standard coverages:
- Bodily injury and property damage—This coverage protects organizations from the legal liability arising from bodily injury and property damage stemming from an organization’s premises or operations.
- Personal and advertising injury—This aspect of CGL policies protects insureds from liability stemming from accusations of libel, slander, false arrest, copyright infringement, malicious prosecution, theft of advertising ideas and invasion of privacy.
- Medical payments—Medical payments coverage includes payments for injuries sustained by third parties that are caused by an accident at the insured’s premises or the insured’s operations. Unlike bodily injury and property damage coverage, medical payments coverage can be triggered without legal action and is designed to settle smaller, less serious medical claims without litigation.
Conclusion
Consult trusted insurance professionals like our team at Robertson Ryan for further guidance on how to protect your organization from commercial liability loss exposures.
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Reducing Business Auto Claims
Vehicle-related crashes are the leading cause of work-related deaths. In addition to the potential for loss of life, work-related automobile accidents expose businesses to liability risks, legal expenses, lost time, decreased productivity, and increased insurance and workers’ compensation rates.
Whether your business leases a single passenger car or owns an entire fleet of commercial vehicles, auto liabilities must be monitored in order to try to prevent these ramifications.
Businesses can actively manage auto risks by setting driver qualifications, creating driving rules, and implementing driver training. Review the following guidance to learn more about strategies for reducing business auto claims.
Set Driver Qualifications
Setting and keeping standards for drivers can greatly reduce the risk of auto accidents. Review motor vehicle records (MVRs) for all new employees; review them annually for every driver. MVRs contain important historical driving information on an individual’s moving violations, driving-under-the-influence (DUI) offenses, vehicular crimes and other types of point accumulations. Work with your risk management professionals to determine appropriate standards for your business. Some qualifications to consider are:
- No serious driving violations—In the past three years, drivers should not have any recorded DUIs, hit-and-runs, incidents of reckless or negligent driving, driving with a suspended license or driving 15 mph over the speed limit.
- Fewer than three moving violations—In the past three years, drivers should have fewer than three incidents of speeding, changing lanes improperly, running red lights or failing to yield.
- Fewer than two at-fault accidents—In the past three years, drivers should have no more than one at-fault accident. At-fault accidents include any incident where the driver is cited with a violation, negligently contributes to the accident, or is involved in a single-vehicle accident.
Mandate Seat Belt Usage
Motor vehicle-related injuries are twice as costly as other work-related injuries, averaging $72,500 per injury claim. Fortunately, wearing a seat belt can reduce the risk of injury or death by 50%. Create a successful seat belt policy by:
- Assigning a high-level manager to support the enforcement of a comprehensive driver safety program
- Using on-the-spot surveys, motor vehicle monitoring, collision reports and company training sessions to ensure drivers comply with company policy
- Asking employees to sign a pledge saying they will wear seat belts
Minimize Distractions for Drivers
Crash risks are two to six times higher when a driver is texting or manipulating a cellphone, according to recent studies. Even talking on a cellphone is a cognitive distraction that may pull a driver’s focus from the road. Eating, drinking, adjusting the radio, talking to vehicle passengers and checking the GPS also cause significant distractions. To avoid these:
- Consider banning all cellphone use, even if it’s legal in your state or if a hands-free headset is used.
- Try voice-controlled devices, such as GPS, which will allow drivers to keep more of their focus on the road.
- Consider policies to limit the number of passengers allowed in a vehicle during work hours.
Utilize Technology
The use of modern telematics allows businesses to analyze fleet data, make informed decisions and increase productivity while cutting costs. Ways to utilize technology include:
- Using telematics—In-vehicle telematics allow fleet managers to watch their drivers for risky behaviors in real-time. Monitored behaviors include speeding, hard braking, hitting the gas and not wearing a seatbelt.
- Using dash cams—Dashboard cameras, often referred to as dash cams, can be used to monitor drivers, promote safe driving practices, and reduce liability if an accident occurs.
- Before adding dashcams to your fleet, review state-specific laws on privacy concerns related to videotaping your drivers and the public.
Prevent Theft
Not only can motor vehicle theft cause costly business delays, but if you or an employee is in the car during the attempted theft, the result can also be dangerous or even fatal. Although vehicle theft is covered under comprehensive car insurance policies, preventing theft is the best way to avoid dangerous situations or expensive delays. To minimize the risk of theft:
- Keep doors locked and windows shut. This applies any time you are away from the vehicle.
- Hide valuables. Keep your wallet, purse, phone, and other valuables hidden to reduce a thief’s incentive to break into your vehicle.
- Park in secure, high-traffic areas. Park near guard booths or store entrances if parking in a public garage. Keeping your car in a locked garage at home is the safest option.
- Use anti-theft devices. Use steering wheel locks or gearshift column locks to make theft more difficult. Most new vehicles have tracking devices, but these devices can also be purchased for older cars.
- Exploit your vehicle identification number (VIN). VINs are used by law enforcement agencies to identify stolen cars. Paint the VIN under the hood, under the trunk and on the engine to make it more difficult for thieves to sell parts of your car.
Train Drivers
Drivers can be a significant source of liability behind the wheel. By implementing regular trainings, fleet leaders can build trust with their drivers and reduce the risk of accidents. Some topics to cover include:
Intoxicants—Drinking alcohol impairs a driver’s reaction time, steering responsiveness and lane control. Educate drivers on the dangers of driving while intoxicated and monitor their driving for signs of intoxication.
Defensive driving—Significant anger, aggression or road rage behind the wheel was expressed by 80% of drivers in a recent survey. Aggressive behaviors include speeding, tailgating, blocking cars from passing or changing lanes and “punishing” other drivers with brakes or headlights. Train drivers to:
- Maintain an adequate following distance
- Use turn signals
- Allow others to merge
- Use high beams responsibly
Drowsy driving—A 2017 census estimated there were 91,000 police-reported crashes caused by drowsy driving. These crashes occur most frequently between midnight and 6 a.m and often involve a single driver with no passengers. To avoid drowsy driving:
- Get a proper night’s sleep.
- Avoid drinking alcohol before driving.
- Check prescription or over-the-counter drugs to see if they could cause drowsiness.
- Pull over for a 20-minute nap if you feel drowsy.
Seasonal hazards—Be aware of changing seasonal hazards. On a similar note, drivers not accustomed to particular weather patterns may need additional training. For example, a driver who isn’t familiar with cooler climates may not be used to driving on ice. Below are a few items drivers should be mindful of in each season:
- Summer—Warm weather leads to an increased number of walkers and cyclists. Look for pedestrians and cyclists everywhere, especially in low-visibility conditions.
- Fall—Back-to-school season means more children on the road. Never pass a stopped school bus with red flashing lights.
- Fall also means a return to deer season. Avoid collisions with deer by staying alert, using high beams and wearing your seatbelt.
- Winter—With snow and ice on the ground, it’s important to drive slowly, accelerate and decelerate slowly, and increase the distance between yourself and other vehicles. When there are snowplows on the road, remember the road in front of them is usually worse than the road behind them. Pass with lots of room and keep your headlights on.
- Spring—The changing season means a return to roadwork construction. Stay focused and patient when driving in work zones. Be mindful of the reduced speed limit and remain alert.
Report an Accident
If an accident does occur, a great deal can be done to contain costs and minimize business interruption losses. Good reporting and proper procedures can help minimize the business costs. In the event of an accident:
- Pull your vehicle to the side of the road.
- Assess injuries.
- Don’t leave the scene of the accident.
- Collect as much information as possible.
- Alert the police or highway control.
- Begin the claims process with your insurer.
Purchasing the right auto insurance policy, keeping the proper documents in your vehicle, and ensuring your vehicle is emergency-ready with traffic cones and flares can be helpful if an accident does occur.
We’re Here to Help
For more risk management guidance, contact Charlie and his team today for a complimentary consultation. We’ll discuss proper loss control and training strategies that can be implemented to drive real improvements and help reduce your program costs.
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Classic & Collector Car Insurance
If you own a classic car, your insurance coverage should be as unique as your vehicle. Whether you purchase a muscle car or an antique vehicle, you’re best suited by getting customized classic & collector car insurance.
Whether you purchased the vehicle as a passion project or as an investment, you’ll want to insure it properly so you can rest assured that your one-of-a-kind beauty from back in the day will be protected.
We drill down and look at all usage and coverage considerations while creating a policy specifically to suit your classic cars, including:
How Will You Use Your Vehicle?
When insuring a classic car, you must consider how you will be using the vehicle:
- Will you only drive the vehicle to car shows or in a parade now and again? If so, your policy should be limited to those circumstances.
- Are you going to use your antique vehicle to go to the grocery store, hit the beach or visit a relative? Then, your policy should reflect this kind of usage.
- How many miles do you intend to drive each year?
Typical Coverage Inclusions
A typical classic car insurance policy includes the following:
- Agreed value coverage: Pays for the car’s full-insured value with no depreciation in the event of a total loss, less your deductible.
- Inflation guard: To compensate for how classic cars increase in value over time, the policy increases the vehicle’s value quarterly.
- Spare parts coverage: Comprehensive coverage for your vehicle’s spare parts.
- Flexible usage: Ability to drive the vehicle for up to 2,500 to 5,000 miles annually. Not limited to “parades only.”
Additional Coverage Options
Some additional options to consider adding:
- Instant new purchase coverage for newly purchased collectible cars
- Some carriers offer cherished salvage value coverage, allowing you to keep your vehicle if it’s totaled and still receive the guaranteed value minus any deductible
- Emergency towing in case of a breakdown
- Roadside assistance for items such as a flat tire, dead battery or running out of gas
- Emergency lockout / Lost key return
- Emergency travel expenses in case your classic vehicle breaks down while away from home
- Car show expenses—policy will pay for expenses associated with missing a car show due to a breakdown
- Personal effects—policy will reimburse you for items that are vandalized or stolen when reported to police
- Theft reward
Trusted Carriers Partners
While a few of our High-Net-Worth companies have programs for collector vehicles, we also represent and partner with a handful of more specialized carriers with A.M. Best ratings of A or better, including some of the most recognizable names: Hagerty, Grundy Insurance, and J.C. Taylor Insurance.
We’re Here to Help
Live in the past while protecting your vehicle for the future! Contact our team at Robertson Ryan today to learn more about all of our insurance solutions for your classics and collectibles.
We provide a complimentary assessment of your current policies, and work to provide recommendations to ensure these vehicles receive the care they deserve if something goes wrong.
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Auto Insurance: Split Limits Vs. Combined Single Limit
We often find that new clients come to us having focused more on their auto policy’s annual renewal premiums rather than the actual coverage provided. I feel that’s more of an issue with industry-wide advertising being largely centered around pricing.
However – it brings up an opportunity for us to discuss coverage, which ultimately determines a significant portion of the premiums on your auto policy. When asked about their preference of split auto limits versus combined single limits, most clients aren’t even aware there was another option available.
The reality is that there most certainly is a difference not only in the dollar amounts of coverage, but also how those limits can effectively be utilized if you find yourself in an accident.
It’s critically important to understand that fully in order to choose what’s right for you:
Split Limits
Here’s an example of an auto policy with split limits: ($100,000 / $300,000 / $100,000)
Bodily Injury – $100,000 each person / $300,000 each accident
- $100,000 of total coverage for each person’s injuries / $300,000 of total coverage for injuries from each accident
Property Damage – $100,000 each accident
- $100,000 of coverage per accident for damage to others’ property
Limitations:
- If you’re in an accident and cause more than $100,000 of bodily injury to any one person, you’d be out-of-pocket to cover those excess costs
- If you’ve injured more than one person in an accident
- Policy will only pay $100,000 for any one person’s injuries
- It’s quite possible the total of all injuries could exceed the amount of coverage available per-accident, leaving you to cover the rest
- Property Damage
- Some luxury vehicles can cost well above $100,000 per car
- If you’re at-fault in an accident with the wrong vehicle, it could exceed your coverage limits leaving you out-of-pocket to cover the remainder
Combined Single Limit
Here’s an example of an auto policy with Combined Single Limits:
$500,000 Combined Single Limit Per Accident – Bodily Injury and/or Property Damage
Combined Single Limit coverage offers no specified limits per-person, per-accident, or for property damage to restrict coverage. With one combined limit of coverage, it gives you the flexibility to use your limit more effectively where it’s most needed. It’s seen as a stronger form of coverage as it gets rid of some of the potential gaps/limitations listed above that come with with carrying split-limits.
Excess Liability Coverage
Coverage from Excess Liability or Umbrella policies applies only after your limits on your primary auto policy are exhausted.
However, there’s often requirements that you hold a minimum amount of coverage on your auto policy in order to purchase excess policies (such as $250,000/$500,000/$100,000 Split Limits OR $300,000 Combined Single Limit).
The more primary coverage you carry on your auto policy, the more leeway you have before utilizing your excess limits. If you can avoid utilizing your excess coverage in a claims scenario, it will improve your claims history and greatly benefit your overall risk profile for the future making it easier to obtain coverage at the best possible rates.
Call Us Today
We’ll help you explore available options, explain key differences, and help you make the best decision possible. When it comes to auto insurance, there’s no one-size-fits-all approach, and it’s important to be aware of coverage differences when reviewing your policies or making a purchasing decision.
Reach out to our team today for a no obligation review of all your insurance policies, and let us help customize a program just for you.
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Auto Insurance Coverages
If someone were to ask you what was covered under your auto insurance policy, would you be able to explain the various auto insurance coverages? Interpreting the various types of coverage on your auto policy can be tricky, but extremely beneficial.
The more you understand your policy, the more you’re able to customize it to include what you want covered at the right limits for you. It also provides peace of mind knowing you are sufficiently covered in an accident.
To help you develop a better understanding of your policy, here are six main types of coverage that your policy may include:
Liability Coverage
Purchasing auto liability coverage can offer you financial assistance in the event that you are found liable for a vehicle-related incident. In most states, you are required to have two forms of liability coverage in order to meet the state’s minimum auto insurance requirements. The two forms of liability coverage offered are:
- Bodily injury liability: Bodily Injury liability coverage pays for medical expenses caused by an incident for which you are found at-fault. If you or others listed on your policy were to injure a third party with your vehicle, it would be covered under your bodily injury liability coverage. Not only does bodily injury liability cover medical expenses, it can also help cover lost wages of the injured party.
- Property damage liability: Similar to bodily injury liability, if you or someone on your policy collide with another person’s vehicle or property, your property damage liability coverage will assist you in paying for repair or replacement costs to their property.
Personal Injury Protection (PIP) Coverage
Unlike bodily injury liability coverage, PIP is designed to cover medical costs, lost wages and other expenses for you, drivers listed on your policy and passengers in your vehicle who may become injured due to a car accident—regardless of who is deemed at-fault. As such, it is also referred to as “no-fault” coverage. PIP coverage is not offered in all states. Since PIP requires your insurance company to help cover expenses regardless of who’s at fault for the incident, having PIP coverage typically results in higher premium costs.
Collision Coverage
Damage to your vehicle from a collision with another vehicle or object should be covered under your collision coverage. Collision coverage is typically required if your car is still being financed—but once your car is paid off, you often have the choice to keep or remove collision coverage from your auto policy. Although your policy may be cheaper without it, collision coverage can be beneficial in helping you cover damages to your vehicle for which you are found at-fault. If the damages were caused by a third party, it would be up to their insurance company to cover the damages.
Comprehensive Coverage
Simply put, comprehensive coverage provides insurance for losses caused by anything that isn’t covered under your collision coverage, such as losses from natural disasters, riots, vandalism and contact with an animal. If a tree were to get struck by lightning and fall on top of your vehicle, your comprehensive coverage could help cover damages to your vehicle from the incident. Although comprehensive insurance tends to have lower premiums than collision insurance, the cost can vary depending on your deductible amount and policy limits.
Uninsured Motorist Coverage
A recent study by the Insurance Research Council revealed that, in the United States, roughly 1 in 8 drivers are uninsured. Having uninsured motorist coverage can ensure you are protected in the event that your car is involved in a hit-and-run or if you get in a car accident with an uninsured third party. Let’s say you don’t have uninsured motorist coverage—if an uninsured individual were to crash into your vehicle, resulting in major repair costs and medical expenses, you could be financially responsible for all of your vehicle repairs and medical bills.
Underinsured Motorist Coverage
Much like uninsured motorist coverage, underinsured motorist coverage applies if you are involved in an accident with an individual who doesn’t have sufficient insurance to cover all of the damage to your vehicle or your medical bills. For example, if your claim exceeded the other driver’s policy limits, underinsured motorist coverage would help cover the remaining balance of the claim after the third party’s insurance limit was reached. Both underinsured and uninsured motorist coverage are required in some states, while it still remains optional in others.
Note: Our rule of thumb is if you’re going to carry liability coverage for damages you’re liable for to other parties and their property, why wouldn’t you carry the same coverage for your own injuries and property? Not everyone on the road carries sufficient coverage, which leaves you open to risk.
Contact Us
While this is a good overview, it’s certainly not all-encompassing. My team and I strive first and foremost to educate you on available policy options, how they work, and also what they cost.
We arm you with the information you need to make the best decision possible. Reach out for a no-obligation review today.
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Home-Based Business Coverage
Whether you’re new to starting a business at home or experienced, there are varying coverage options on the market depending on the type of business. We’re here to help you sort through what’s available, and pick the best protection for you and your business.
What Protection Does it Offer?
Common coverages for home-based businesses include personal business property, professional liability, business income, personal and advertising injury, loss of business data, crime and theft, workers’ compensation and auto coverage. Depending on the type of home-based business you have, not all coverages apply, and other coverage options may be available.
Coverage Options
Based on your business needs, you have three basic coverage options to choose from, depending on your level of risk:
- Homeowners Policy Endorsement. This provides the least amount of coverage and, therefore, is not ideal for most home-based businesses (depending on the level of risk). While it may provide enough coverage for a freelance writer with one computer and no business foot traffic, it’s not enough for someone who employs others, has clients visiting his or her home or has valuable business equipment and/or inventory.
- In-home Business Policy. More comprehensive than a homeowners policy endorsement, in-home business coverage is a stand-alone policy that provides higher amounts of coverage for business equipment and liability.
- Business Owners Policy, or BOP. A BOP bundles property and liability insurance into one policy. Created specifically for the small- to mid-size business, a BOP covers your business property and equipment, loss of income, extra expense and liability. It is the most comprehensive property and liability option. It does not include workers’ compensation, health or disability insurance, which are available as separate policies
What’s Your Risk?
While most homeowners insurance policies do cover a limited amount of business equipment—computers, copiers and printers, to name a few—it’s likely that what you own is worth more than your policy’s limits. Also, your homeowners liability insurance probably won’t cover any injuries that may occur to the employees or clients that you have on your premises. What’s a home-based businessperson to do?
We’re Here to Help
Properly insuring your home-based business is crucial to protecting both your business and your home. Charlie and his team at Robertson Ryan understand the small business owner’s personal and business needs, and can help you tailor coverage that’s as unique as the products and services you provide. Contact us today at 480-886-6562 to learn more about how we can help you insure your livelihood.
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Insurance Insights: Home Remodels
You’ve developed a plan, collected paint swatches, and selected the siding: Now you’re finally ready to start that long-awaited remodeling project. Whether you’ve hired a reputable builder or are joining the growing number of homeowner’s taking on DIY projects over the last year, there are some commonly overlooked ‘housekeeping’ items you should consider before diving in.
What you need to know
Whether your project budget is large or small, you are adding to both the value of your home and your exposure to risk. To ensure that your project goes smoothly and that you have the coverage you need, here’s what you need to know.
Home Value
Experts estimate that 1 out of 4 remodeling projects adds at least 25 percent to the value of a home, yet most homeowners often forget to consult with their agent to increase their coverage accordingly to properly protect their investment. Most homeowners insurance policies require the property to be insured to 100 percent of the home’s replacement cost, so it’s important to raise your home’s policy limit before your project begins.
Working with General Contractors
The best way to minimize your renovation risk is to hire a reputable general contractor for the job. As part of the biding process, ask the general contractor to provide a Certificate of Insurance and/or copies of the policies. Specifically, check for coverage for the following:
- Workers’ compensation: Verify that he or she has workers’ compensation coverage in the event that an employee or subcontractor gets hurt on the job.
- General liability: Ask if the contractor has liability insurance, which covers losses due to negligence and errors or omissions which result in property damage. Also ask that you are added as an “additional insured” to protect you from potential legal costs and judgements.
- Builders risk: This policy is designed to cover damage to your home and materials, including those not installed yet. We can help you verify whether you should require this from your contractor based on the scope of your renovation project.
Advice for Do-It-Yourselfers
If you decide to do it alone and manage a renovation yourself, you assume all the risks. A review of your homeowners coverage for liability and property is prudent, as you are assuming more risks and exposures than contemplated by homeowners insurance.
Hiring subcontractors who can provide you with a “Certificate of Insurance” or copies of their policies showing their general liability and workers’ compensation coverage is mandatory for your legal protection. Otherwise, you could be subject to workers’ compensation laws, should they become injured while working on your home.
If a friend or relative helps out as a favor and gets injured, your homeowners insurance typically covers the cost of their injuries, up to your policy limits. For an extra layer of protection, it’s a good idea to also carry umbrella liability coverage, which kicks in to provide liability coverage above your homeowners primary limits.
In Summary
If you have any questions or concerns about your coverage going into an upcoming remodel, please don’t hesitate to reach out to Charlie and his team at Robertson Ryan for a comprehensive review of your coverage. This will give you the peace of mind you need to focus on tackling your renovation project head on.
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Common Exposures for Hotels And Lodges
Risk Exposures for Hotels & Lodges
Owning and operating a hotel or lodge can be a rewarding endeavor. However, hotel operators have to manage numerous exposures related to lodging, and many offer amenities—including pools, exercise facilities, bars and restaurants—that can dramatically increase the number of insurable risks. The list below provides an overview of these hotel risks and more, helping you identify potential blind spots in your risk management and insurance programs.
Property
- Due to the volume of valuable items and equipment found in hotels (e.g., bedding, furniture, HVAC systems, laundry machines and decorative artwork), property exposures in hotels are numerous. Complicating matters, property damage can be caused by a variety of factors, including equipment failures, plumbing issues, poor wiring, natural disasters, guests, employees and other third parties. What’s more, water damage and fires have the potential to affect multiple rooms and floors, increasing costs and interruptions for your business.
Equipment Breakdown
- To ensure the comfort of its guests, hotels depend on functioning equipment. In the face of equipment breakdowns (e.g., HVAC system failures, power outages and appliance malfunctions), hotels can experience business interruptions or even prolonged closures. What’s more, equipment breakdowns can even lead to major property damage should an appliance leak or start a fire. Breakdown of Equipment Breakdown Coverage
Crime
- Crime can be a challenge for hotels, especially as employees, guests and vendors all have the opportunity to steal from you. To make matters worse, thieves can strike at any time, leaving owners to recoup any lost funds or valuables. Thieves do not need direct access to cash to steal from you—equipment and supplies are all fair game. What’s more, in the event that a guest is the victim of a theft, you could be held responsible for the damages. Crime Coverage
Premises Liability
- Depending on its size, hotels may have to manage the safety of hundreds of employees and guests on a regular basis. Because of the high number of individuals entering and exiting your hotel, premises liability exposures are significant and, when injuries occur at your business, you could be held responsible. Accidents related to slips, trips, falls, exercise equipment, swimming pools, balconies and unauthorized access to your building are common and major sources of concern. Something as simple as a wet floor or an uneven surface can lead to costly insurance claims following an incident.
Food & Product Liability
- If your hotel has an on-site restaurant, gift shop or offers room service, food and product liability can be a considerable concern. The potential for food poisoning, contamination, injury, spoilage and allergic reactions is ever present, making continued guest safety a challenge. In the event that one of your guests becomes ill due to your food, or accidently ingests a foreign object found in one of your menu items or vending machines, your hotel could face legal ramifications and suffer irreversible reputational damage. What’s more, hotel owners must account for the potential danger of gift shop items.
Liquor Liability
- Lawsuits related to liquor liability are filed each day, and it’s increasingly common for victims and their families to file suits against restaurants for their role in serving a customer who is then involved in an alcohol-related accident. Making matters worse, all it takes is a single liquor liability claim to put your entire business at risk. Liquor liability exposures for hotel owners can stem from selling liquor to underage individuals, overserving patrons and non-compliance with applicable legislation.
Cyber
- The hotel industry is a common target for cybercriminals, as these businesses often store sensitive customer data (e.g., names, addresses and credit card information). In addition, employees who are improperly trained on computer and data safety could put your organization at risk for ransomware, viruses, phishing scams and malware. Compounding your exposures, many hotels offer guest Wi-Fi that, if improperly secured, can put you and your guests at risk of an attack. Cyber Security for Small Businesses
Business Interruption
- Continuity is critical in business, and there are few things more important than continuous revenue and cash flow, particularly for small to medium-sized organizations. In fact, just one brief business interruption can be incredibly costly for an organization, often leading to serious reputational damages or long-term closures. Common interruptions for hotels can include natural disasters, fires, leaks, cybersecurity events and vandalism.
Auto
- Depending on the services your hotel offers, employees may be required to operate a vehicle on behalf of your business, creating automobile exposures in the process. While important for daily operations, the improper use of a vehicle can lead to potential accidents and major insurance claims. What’s more, if you allow employees to use their own vehicles for work, standard commercial auto policies are often not enough. Additionally, providing valet parking can also create unforeseen challenges should a customer’s vehicle get damaged.
Worker’s Compensation
- Any time one of your employees is injured on the job, your business could be subjected to expensive workers’ compensation claims. Common sources of on-the-job accidents for hotel operations include slips, trips, falls, musculoskeletal injuries caused by repetitive tasks, sprains and strains. Normal, everyday tasks related to cleaning rooms and carrying luggage for guests can lead to accidents and, in turn, increased costs for your business.
For More Information
Proper risk management practices can reduce certain exposures, but no system is 100% effective in ensuring an incident-free workplace. As a result, it’s all the more crucial to work with a trusted insurance professional to assess your unique exposures. To learn more or to get a quote, contact Charlie and his team at Robertson Ryan today.
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Source: Zywave