Waiver of Subrogation, What is it?

If after an insurance claim is paid out by your insurance company, it is deemed that another party was actually the negligent one, then your insurance company (via the insurance policy contract) has the right to go after the negligent party. This right is usually found in the "Conditions" section of your insurance policy. This conditional right can, however, be waived. This means that your insurance company would then not be allowed to go after the negligent party. The term for this waiving of rights is called Wavier of Subrogation.

Often you will see the Waiver of Subrogation in commercial leases. Landlords will require that tenants have this verbiage in their insurance policy so that if a claim occurs at the leased location that the tenant's insurance company cannot come back after them for damages. The landlord, however, would be less inclined to have this wording on their policy since it would mean they and their insurance company would not be allowed to go after their tenant after a claim. A building owner and their insurance company usually have more to lose (the building and its rental income) than the tenant does so they would be very interested in being able to go back after a negligent party.

There are two example of where a landlord may want the Waiver of Subrogation wording on their own insurance policy. The first is if they are renting to a family member or friend who they know doesn't either have enough assets or money to be able to cover them in case of a claim, they may not want their insurance company to be able to go after them to collect for damages. The second is if the landlord and tenant are owned by the same person or organization. In some cases, usually for legal or tax reasons, a person may have one company that owns the building and another company that owns the business that is the tenant. In those cases you would probably want both the landlord and tenant policy to have a Waiver of Subrogation clause in their policies so that you don't have your two insurance companies fighting over payout.

Another place where you will see Wavier of Subrogation is in situations where companies or organizations will subcontract work to other companies or organizations. Often, if a business is going to hire another business to do work on their behalf they will request that the subcontractor have Wavier of Subrogation on their policy. Similar to the Landlord/Tenant relationship, if the contractor requires the subcontractor to have Waiver of Subrogation on their policy it means the subcontractor, if a claim arises, is not able to go back after the contractor for money.

When entering into a lease or a business contract it is important to know if you are going to be required to have Waiver of Subrogation and if you have it or not in your insurance policy. It is best to have both your legal team and your insurance professionals review contracts to make sure you are adequately protected.

Business Medical Payments

Your business liability policy covers you for claims due to your negligence. Medical payments coverage provides payment for bodily injury to third parties that occur on the premises you own or rent as a result of your operations regardless of negligence.

The rationale for this coverage is insurers believe an injured party is less likely to sue you if they receive prompt payment for their medical expenses. Medical payments coverage expedites payment to an injured party without their having to sue.

A relatively high medical payments limit chosen by you might reduce the chances of a minor claim escalating into a lengthy and expensive claims process.

For claims that might be larger than your chosen medical payments limit, the liability portion of your policy would apply if it were determined that you were negligent. Regardless of your fault the commercial liability policy will provide a defense if you are sued by a third party, even if the claim is groundless.

Damage to Rented Premises

Any time a business rents or leases a space to operate from they sign a contract. In that contract are insurance requirements stating that the tenant will carry certain liability limits. Normally they will ask the tenant to carry a commercial general liability policy, and more often than not they ask for at least $1,000,000 per occurrence limit. The reason they ask for this is that if the tenant is the cause of a fire or other type of damage to the rented building, the landlord wants to make sure that the tenant’s insurance will pay for the damages, and not their own insurance.

Commercial General Liability takes care of a lease contract with two different types of coverages. The first is the coverage I mentioned above of $1,000,000 per occurrence limit. This coverage, however, only gets the tenant half way there. The per occurrence limit doesn’t cover for actual areas of a building that the tenant rents or leases. It will pay for only the part of the building that is not rented by the tenant. An example might help explain this better.

Example:
Let’s say that business XYZ, Inc rents unit A of a four unit office building. If XYZ, Inc causes a fire that extends damages to both unit A and unit B, the per occurrence portion of their insurance policy will only cover damages to unit B. It will not pay for damages to unit A because it is leased or rented by them.

Damage to Rented Premises (sometimes called Fire Legal Liability) is the other coverage a tenant needs when they rent space. This coverage is often included in a general liability policy as well but many times is not specifically mentioned in lease contracts. In the example above, Damage to Rented Premises would be the coverage that would pay for unit A that XYZ, Inc. rented.

The reason I bring this up as a blog article topic is because the Damage to Rented Premises is often overlooked. Since it is left out of many lease contracts, businesses don’t think to check with their insurance carrier about the coverage. Your typical commercial general liability policy will only include $100,000 to $500,000. If company XYZ, Inc. in the above example rented a large space, this may not be enough coverage, and they could pay for some of the damages out of pocket.

So next time you rent a space for your business be sure to have Fey Insurance Services review the lease and double check your commercial general liability insurance limits to make sure you are covered in case of a large fire.

Damage to Rented Premises

Any time a business rents or leases a space to operate from they sign a contract. In that contract are insurance requirements stating that the tenant will carry certain liability limits. Normally they will ask the tenant to carry a commercial general liability policy, and more often than not they ask for at least $1,000,000 per occurrence limit. The reason they ask for this is that if the tenant is the cause of a fire or other type of damage to the rented building, the landlord wants to make sure that the tenant’s insurance will pay for the damages, and not their own insurance.

Commercial General Liability takes care of a lease contract with two different types of coverages. The first is the coverage I mentioned above of $1,000,000 per occurrence limit. This coverage, however, only gets the tenant half way there. The per occurrence limit doesn’t cover for actual areas of a building that the tenant rents or leases. It will pay for only the part of the building that is not rented by the tenant. An example might help explain this better.

Example:

Let’s say that business XYZ, Inc rents unit A of a four unit office building. If XYZ, Inc causes a fire that extends damages to both unit A and unit B, the per occurrence portion of their insurance policy will only cover damages to unit B. It will not pay for damages to unit A because it is leased or rented by them.

Damage to Rented Premises (sometimes called Fire Legal Liability) is the other coverage a tenant needs when they rent space. This coverage is often included in a general liability policy as well but many times is not specifically mentioned in lease contracts. In the example above, Damage to Rented Premises would be the coverage that would pay for unit A that XYZ, Inc. rented.

The reason I bring this up as a blog article topic is because the Damage to Rented Premises is often overlooked. Since it is left out of many lease contracts, businesses don’t think to check with their insurance carrier about the coverage. Your typical commercial general liability policy will only include $100,000 to $500,000. If company XYZ, Inc. in the above example rented a large space, this may not be enough coverage, and they could pay for some of the damages out of pocket.

So next time you rent a space for your business be sure to have Fey Insurance Services review the lease and double check your commercial general liability insurance limits to make sure you are covered in case of a large fire.

Professional Liability & the Claims-Made Policy

Occupations or business practices involving specialized care or advice often need professional liability insurance. Typical business classifications that need this coverage would be notary publics, real estate agents or managers, attorneys, doctors and consultants. The typical commercial general liability policy will only respond to bodily injury, property damage, personal injury or advertising injury claim.

The professional liability policy often is written on a claims-made form. The claims-made form requires the claim to be reported during the policy period, and the incident causing the claim must have occurred after the retro date for a claim to be covered. A retro date is a date prior to the start of the claims-made policy. The retro date could be years prior to the start date of the policy based on the underwriter’s discretion, after considering the applicants past exposures and loss history.

By comparison, the typical occurrence-based policy used in most commercial policies responds to claims that occur during the policy period, regardless of when reported subject to the statutes of limitations. The occurrence-based policy handles when the claim happens, and the claims-made policy considers when the claim is reported. In some cases, it is possible to purchase a claims-made policy with full prior acts coverage that essentially does away with a retro date. Coverage classes for this option are limited, and again, depend on the underwriter’s discretion.

When canceling an existing claims-made policy, it is usually advisable to purchase and extended reporting period. This is commonly referred to as tail coverage. Various lengths of time are available. Tail coverage extends the claim reporting period under the claims-made policy to cover claims that have occurred during the coverage period, and not yet reported by the cancellation date.
While most occurrence-based policies are somewhat similar, claims-made policies are usually specific to each company issuing the policy. The insurance agent must d o a careful review of these differences to determine applicability to a particular operation.

Products and Completed Operations Hazard

If you manufacture, sell or distribute a product, there is a possibility that the use of the product could cause bodily injury. The example everyone thinks of is a stepladder. Next time you are at the home improvement store take a look at all the warnings that ladder manufactures put on their product. Who really needs to be told not to stand on the top rung of a ladder? But, it is because of the product liability hazard that manufacturers feel it is necessary to include so many warning with their products. Even if you are not the manufacturer, and simple sell someone else’s products, you could still be liable.

The second part of this coverage is completed operations coverage. If you install or repair products such as a heating system, you could be negligent should damage be caused by your work after you work is done. Let’s say that you installed a new furnace in a restaurant, and later that day a fire ensues. The fire marshal determines that product literature that was left inside the furnace caught fire further melting a plastic cover causing black smoke to spread throughout the premises. The business had to close until repairs and cleanup could be completed. A substantial amount of money was lost and the cleanup was in the thousands of dollars.

Both of the situations cited above would be covered if your policy includes products and completed operations coverage. Not sure if your package includes this coverage; give us a call to review.

Deductible Basics

When a covered insurance claim happens the insured, in many cases, will be responsible for the first few dollars of most losses. The amount they are responsible for is called the deductible. More often than not, deductibles are only associated with property damage of the insured’s own possessions whether that is a vehicle that was damaged or damage to their contents, their buildings or even their loss of income. On some occasions you may see deductibles on liability claims but not in many.

Deductibles can come in many different forms on insurance policies. You can have a given dollar amount, say $500. Often times you see this type of deductible on home insurance or business property insurance. Some deductibles might be a percent of the loss like 1% or 10%. Sometimes you will see this type of deductible on a home or business but many times it will be associated specifically with earthquake coverage. Deductibles can be vanishing deductibles. As the insured racks up years of no losses, their deductible gradually drops each year until eventual it is $0.

In most cases the deductible is per claim. This means that each time you have a claim you pay a deductible. It isn’t like your typical health insurance policy where you have an out of pocket deductible for the year and once you meet that limit you are done with the deductible. In property and casualty, if you have a $500 flat per claim deductible you will pay $500 each time you have a claim no matter how many you have in a given year.

Deductibles can be a helpful cost savings tool. They can be raised to help drop premiums but the insured needs to understand that by raising deductibles they have taken on a bit more of the burden of possible claims.

It is important for insureds to understand what their deductible is so that they can be prepared to financially meet its requirement if a claim were to happen. I mention this more in connection with a percentage deductible. The insured should know if the percent is on the cost of the claim or on the coverage limit. For example, if a person had a $200,000 house and an insurance policy with a 5% deductible (on the coverage limit) it would be best to know that you have a $10,000 deductible before you have a claim. Someone that doesn’t know their policy might think that it is 5% per the cost of the claim.

Deductibles are just one of many facets to an insurance policy. Be sure to familiarize yourself with your policy and policy coverages and consult your independent insurance when ever you have any questions.

US Working Toward Standardized Penalties for Data Breaches

Last month the US Senate’s Judiciary Committee approved three bills that deal with data breaches.  Those three bills where, The Personal Data Privacy and Security Act of 2011, The Personal Data Protection and Breach Accountability Act of 2011 and the Data Breach Notification Act of 2011.  The gist of all these acts is that the government is working toward a standardized practice of requiring notification of data breaches and a standardization of penalties for companies that have data breaches.  What this means for business is that it is now very important for you to take as many precautions as you can to secure your clients’ private data.  Firewalls, antivirus software, IT consultants, encryptions, company internet usage policies and password protections are all key parts of securing your business for data breaches. 

Even if all the preventative measures are in place, your business still runs that risk of a data breach.  That is where insurance products can help protect your business.  Insurance products can’t help protect your data but they can protect your company’s money by helping pay for data breach notification costs, third party lawsuits filed against your company for breach of client’s personal information and the cost to restore lost data.

As the government moves to a more standardized notification requirement and penalties for data breaches, companies that hold private information should also be working toward setting up strong data security measures as well as put in place insurance products to help protect their company’s hard earned money.

Be Cautious When Using Smart Devices

Mobile devices used by you personally or provided by your business or employer offer wonderful advantages to make you more productive, but they come with potential hazards. Security breaches either by accident or intentional "hacking" can put your personal information and/or your business information at risk.

Most corporate security types say the biggest issues involve personal mobile devices use to "hack" into corporate servers and data bases. Data encryption and passwords are highly recommended along with the ability to wipe out data from a Smartphone or tablet issued by the company. The latter can be extremely helpful in the event a personal Smartphone is stolen, and the corporate IT people want to wipe the phone of all secure access information remotely. Some corporations allow access to company data through personal mobile devices but only with devices that were provided by the corporation. Some corporations are requiring employees to register personal devices with corporate security/data processing so they can control how their corporate data is being accessed. All of these precautions are highly recommended by Fey Insurance.

It isn't just the business world that faces possible problems with personal smart phones, iPads, etc. accessing data. Accessing your personal and private financial information via Smartphone, iPads, etc can also be an issue. Many people have their banking applications on their devices as well as applications that have all their stored passwords. A lost device could result in access to your personal bank accounts and do a lot of financial damage. Password protecting your devices is key. The more passwords and protection you employ the better in protecting you and your family from potential financial ruin. Apple iPhones have tracking capabilities so if your phone is lost you can use your personal computer or another iPhone to track its location. They also allow you to wipe the phones clean of all data and make them useless to anyone who might find the lost phone and want to cause serious problems with your data.

If you have further questions, consult your Smartphone or table manufacturer, your phone service carrier or your corporate IT/security people for help.

Cyber Liability Insurance

As absolute dependence on computers and computer stored information grows there are new ways companies can be sued by third parties for damages.  When private information such as dates of birth, social security numbers, credit card numbers, etc are stolen off of your business' computer systems, it is called a data breach, and they are very costly to manage.  The insurance industry has calculated this cost to be about $200 per individual whose information was taken.  Also, if a malicious virus is distributed from your computer to a customer’s computer system and causes damage, you could be held responsible for cost to repair their system.  Your basic general liability policies are not designed to pay for such claims so many times when businesses look to their business policies the coverage is not there to help with these expenses.  Because of that, insurance companies have developed a new product called cyber liability.  It is designed to step up and pay for the third party damages caused by your data breaches and damage by viruses to other’s computer system.

So what kinds of business should be looking into this new cyber liability products?  Any business with a computer, especially one that stores or interacts with any private information or distribute emails to others should look into this product.  Restaurants and retail stores that take credit cards, professional business that store dates of birth, driver’s license numbers and social security numbers, even doctors’ offices are at risk for the types of claims mentioned above.  Unfortunately, even if a business has the best firewalls and antivirus software, they still are at risk of data breaches and malicious viruses.  Cyber liability is something designed to help protect your business assets if an unpreventable claim strikes.

Business Income

Calculating the appropriate business income limit does not have to be a mind-numbing process. To understand business income coverage limits, you must simply understand that the coverage is almost entirely based on time. The amount of coverage and the correct coinsurance amount can be calculated once a reasonable estimation of the time necessary to return to full operational capability is determined.

Four Key Objectives must be accomplished as quickly as reasonably possible:

1) Rebuild the building, or find a move to an alternate permanent location.
2) Find, purchase, and have operational, replacement machinery and equipment.
3) Replace and/or replenish stock (raw materials for manufacturing operations).
4) Return operations to the same level existing just prior to the loss.

Business Income’s Necessity

According to the Federal Emergency Management Agency (FEMA), there is a structure fire ever 4.5 minutes. Approximately 25 percent of businesses never reopen after a shutdown of just 30 or more days, according to the insurance industry. When you include the number of business failures within five years that are directly traceable to the same kind of claim, the number could approach 40 percent.

Business closings as a result of natural disasters also reach 25percent. The U.S. Small Business Administration reports that more than 90 percent of small businesses fail within two years after being struck by a disaster. Combining these two pieces of statistical data, losses can lead to the closure of thousands of business in any given year due to an interruption in operations.

The Calculation

Once total revenues and the total amount of non-continuing expenses (production-related expenses that do not continue during the interruption) is known and applied to an honest worst-case scenario estimate of the time necessary to resume operations, the correct coinsurance percentage can be calculated. Coinsurance percentages, in 10 percent increments, can be from 50 percent to 100 percent- each representing a proportion of one year (50 percent equals six months; 60 percent equals 7.2 months; 100 percent equals 12 months). It is also sometimes possible to obtain a 15-month business-interruption period at a corresponding coinsurance limit of 125 percent.

The Reality

Most businesses that close and never reopen after a catastrophic closure (30 days or more), don’t close because of the lack of building and business personal property coverage. They close because there is no money coming in the door. Few businesses can remain viable without a source of income. Many business expenses continue even during the period of temporary closing.

Obviously, the optimal goal is to have the building, contents and business income all properly insured. Ultimately, only the business can provide these figures, but this simple approach can make this exercise much easier. Once you accept the reality that loss of income is as important to the insure as insuring your property, we can help guide you to the proper coverage to further protect your business.

Improved Workplace Awareness Helps Traffic Fatalities Trend Downward

Employers and employees need to address the issues associated with automobile accidents as part of their daily management routine. A heightened awareness of automobile safety in the workplace has resulted in greatly improved fatality results. In 2010, 32,788 people lost their lives in vehicle accidents - down nearly 10,000 in the last decade. Fourteen percent of workplace fatalities result from automobile accidents. That is also down from 22 percent just 10 years ago. While this trend is moving in the right direction, the automobile exposure to a business offers one of the most serious liability exposures that can be faced.


Performance Management consultants recommend compliance with the 4-A’s of driving:

Anticipate what could possibly go wrong and focus on driving to avoid mishaps
Adjust to changing circumstances such as traffic congestion or changing weather
Assume nothing - don’t automatically assume that traffic will stay moving or a car won’t change lanes into your path
Allow no distractions - drivers must avoid anything that takes their focus off of driving

Not only can the strict adherence to an automobile safety program help relieve a business from a serious claim, maintaining drivers with good records reflect positively on the business’ auto insurance premiums.

Performance Management predicts that if employers would institute just two actions, implement standards of practice for driving and educate employees about good driving principles and management’s expectations, accidents would be reduced by more than 50 percent.

Water In Your Basement?

This rain has caused one common phone call for our agency this spring, “I have water in the basement”. Whether it is a home, business or rental property, water has been finding its way into places it should not be; so what better topic to blog about today than water in your basement.

The first question we are asked is whether or not it is covered. This depends on a few factors. The two main factors are the source of where the water is coming from and the type of insurance policy you have. If water is coming into your basement through window wells or other opening in your basement (excluding drains), then that would be considered a flood loss which often is not covered by your normal insurance policy. In fact, even if you had a flood policy it normally doesn’t cover contents located in parts of a building that are underground, i.e. a basement. If the water is gathering in your basement because of a sump pump failure or a backed up drain or sewer than there could be coverage, as long as you meet the second factor which is having the type of policy that covers those things. Rental property policies have the most limiting coverage for water in the basement. The main coverage you need is called “Water Back up of Sewers and Drains” and many insurance companies don’t offer that on rental properties. Commercial building insurance policies have the “Water Back up of Sewers and Drains” endorsement as an optional coverage so it just depends if you purchased that option or not if you would have coverage. Homeowners polices more often than not have the “Water Back up of Sewers and Drains” included in their basic policy but if someone tried to skimp on the premium they may have taken that coverage out.

There are a few tips that we would like to let you know about as far as dealing with such a rainy spring. First, if you don’t go to your basement very often make sure that during this time of year you do take more frequent trips for inspection purposes. If you have a sump pump, check it regularly to make sure it is functioning properly. Also, make sure that drains are clear of anything that might cause blockage.

If you do have the bad luck of finding standing water in your basement make sure to give your insurance person a call. Whether it is covered or not they would have advice as to who to call for clean up. It is a good idea to try and clean the water up as soon as you can since mold can settle in after a few days. Also, if the basement is in a commercial building that stores chemicals of any kind it might be best to stay clear from the water. The water may have caused leaked chemicals to mix and could be harmful.

If you happen to be in the service area of the Metropolitan Sewer District of Greater Cincinnati you are one of the lucky few that could get free help with your water problem. Again, depending on the source of the water, they may take care of the water clean up at no cost to you. Their phone number is 513-352-4900 and their website is http://www.call.msdgc.org/.

Certificates of Insurance

It is good risk management for customers to check and make sure their vendors have insurance. Because of this small business owners are often asked to prove to their customers they do indeed have insurance. When customers ask for proof of insurance what they are often asking for is a form called a certificate of insurance. A certificate of insurance gives the basic information of a business insurance policy. It tells things such as the insurance company's name, dates the policy covers, name of the insurance agency who handles the policy and highlights the different types of liability coverages the policy has and the limits or amount of insurance in each of those coverages.

Any type of business can be asked to provide a certificate of insurance. Three areas where you see certificates of insurance most commonly asked for are construction and maintenance contractors, businesses that lease space and consultants. The reason that construction and maintenance contractors are often asked to show certificates of insurance are because their customers want to be sure if they cause injury around their premises or damage around their premises that they are covered. Also, many contractors are acting as subcontractors to other construction and maintenance companies. If their subs cause damage or injury they want to be sure they have insurance because if they do not they will then be the responsible ones.

People that lease space are asked for certificates because the owner of the building wants to make sure that if they cause damage to the building they have insurance to put the building back as it was prior to incident that caused damage. They also want to make sure if the person leasing space is responsible for someones injuries while they are visiting the building that they have insurance in place to cover those injuries.

Consultants are asked to provide certificates of insurance in order to meet contract requirements. Often, consultants sign a contract with their customers and in the contract there is always an insurance section that outlines the required coverages they must have. The best way for that customer to make sure the consultant is meeting the requirements is to ask for a certificate of insurance.

So the next time you are asked by a customer to show proof of insurance you will understand that you are being asked for a certificate of insurance. Contact your agent and let them know you need a certificate of insurance. Make sure to provide them with the name and address of the company or individual that is asking you for the certificate.

Deductible Basics

When a covered insurance claim happens the insured, in many cases, will be responsible for the first few dollars of most losses. The amount they are responsible for is called the deductible. More often than not, deductibles are only associated with property damage of the insured’s own possessions whether that is a vehicle that was damaged or damage to their contents, their buildings or even their loss of income. On some occasions you may see deductibles on liability claims but not in many.

Deductibles can come in many different forms on insurance policies. You can have a given dollar amount, say $500. Often times you see this type of deductible on home insurance or business property insurance. Some deductibles might be a percent of the loss like 1% or 10%. Sometimes you will see this type of deductible on a home or business but many times it will be associated specifically with earthquake coverage. Deductibles can be vanishing deductibles. As the insured racks up years of no losses, their deductible gradually drops each year until eventual it is $0.

In most cases the deductible is per claim. This means that each time you have a claim you pay a deductible. It isn’t like your typical health insurance policy where you have an out of pocket deductible for the year and once you meet that limit you are done with the deductible. In property and casualty, if you have a $500 flat per claim deductible you will pay $500 each time you have a claim no matter how many you have in a given year.

Deductibles can be a helpful cost savings tool. They can be raised to help drop premiums but the insured needs to understand that by raising deductibles they have taken on a bit more of the burden of possible claims.

It is important for insureds to understand what their deductible is so that they can be prepared to financially meet its requirement if a claim were to happen. I mention this more in connection with a percentage deductible. The insured should know if the percent is on the cost of the claim or on the coverage limit. For example, if a person had a $200,000 house and an insurance policy with a 5% deductible (on the coverage limit) it would be best to know that you have a $10,000 deductible before you have a claim. Someone that doesn’t know their policy might think that it is 5% per the cost of the claim.

Deductibles are just one of many facets to an insurance policy. Be sure to familiarize yourself with your policy and policy coverages and consult your independent insurance when ever you have any questions.

Tenant’s Improvements to the Premises

A common circumstance surrounding commercial leases involves the tenant making alterations, or improvementsto the rented premises. A strip mall retail location could be used for many different types of tenants. It is unreasonable to assume that the premises is already set up to handle any type of tenant from a clothing store to a restaurant. For example, a new tenant might have to build partitions, add refrigeration or install a kitchen.

The commercial property policy defines improvements and betterments as “fixtures, alterations, installations or additions that are made a part of the building that is occupied but not owned by the named insured, and that the named insured acquires or makes at his expense but cannot legally remove.” Since business personal property coverage insures the tenant’s “use interest” in improvements and betterments located at the rented premises, the amount of these improvements should be calculated into the limit you choose for your business personal property.

Hired & Non-Owned Auto Liability

Even if your business doesn’t have any vehicles titled in the business name, there is still an auto coverage that you should always have. That coverage is called Hired & Non-Owned Auto Liability. To help best explain this coverage here is an example claim. Say that you had an employee who during the lunch hour ran the daily deposit to the bank. They used their own vehicle for this errand. Let’s say that unfortunately during her trip to the bank she caused an auto accident. Now, the first auto insurance policy that would react to this claim is going to be your employee’s personal auto policy, however, if they don’t have any insurance or if their insurance is not enough to take care of the damages, there is a good chance that your business could be drug into a law suit. That is where Hired & Non-Owned Auto Liability steps in and helps protect your business.

Hired & Non-Owned Auto Liability can be written to provide protection for your business when you either hire or rent vehicles for business use and/or your employees use their vehicles on business for you. The premium for Hired Auto Liability protection is based on rental costs. You can also add protection for physical damage to the rented vehicle as an alternative to buying Collision Damage Waiver from the rental car company. The premium for Non-owned Auto Liability is based on the number of employees you have.

So even if your business doesn’t own any vehicles that does not mean that you don’t have an auto liability risk.

General Liability vs Errors and Omissions

General Liability
What it protects against: Accident and injuries that occur on company property or the property of a customer. It also protects against product liabilities.

How it works: Commercial General Liability (CGL) includes payments to an injured person or to an owner of property that is damaged. These can cover medical expenses and the cost of defending lawsuits, including legal settlements or investigations. Insurance may also provide the means to post bonds during a legal proceeding, or pay judgments. A CGL policy also covers libel, slander, copyright infringement and other personal and advertising injuries.

Who needs it: Most, if not all, companies

Errors & Omissions
What it protects against: Claims by customers that a company made mistakes or failed to perform contractual work. It should include coverage of the cost of legal defense. It is also know as professional liability insurance.

How it works: It insures mistakes made by a company’s owners, employees and contractors. It is similar to a doctor’s medical malpractice insurance.

Who needs it: Anyone who advises, recommends, consults or designs solutions should consider this coverage.

Information provided by: Bests Review The Guide to Understanding Business Insurance Products (2007-2008)

So What is the Difference?:
The key difference between the above two mentioned business insurance coverages is that General Liability only pays claims that have resulted in bodily injury or property damage (meaning damage to property not owned or leased by the business). It will not cover a financial loss that is a result of errors or alleged errors done by the business or the omission of work that the business was contractual obligated to do. That is where Errors & Omissions Insurance steps in and pays for the cost to defend the business as well as any settlements that a court requires them to pay for their error or omission of work.

Insurance Journal Article on Cyber Liability

On March 5th, 2012 the Insurance Journal published an article called "What Insured's Should Know About Avoiding Cyber Liability Exposures".  It was written by Christopher Bomar of  Boomarang Data Backup.  In the article he brings up scenarios of possible insurance claims, where the gaps might be in covering such claims and how to avoid such gaps.  It is a well written article and even has a quote from one of Fey Insurance's very own, Brian Fey. 

Please take a look at the article as it does a great job of showing the current status of Cyber Liability needs, gaps and exposures.

Article: What Insured's Should Know about Avoiding Cyber Liability Exposures

2010 Discriminations Charges

The US Equal Employment Opportunity Commission (EEOC) recently released some very interesting data for the fiscal year of 2010. 99,922 workplace discrimination chargers were filed which set a new record. The types of claims that were filed where:

Retaliation Charges

Race-Related Charges

Sex Harassment

Disability

Age

National Origin

Religion

Equal Pay Act

Genetic Information Nondiscrimination Act

What is even scarier about this number for business owners is that Commercial General Liability (CGL) doesn’t cover these types of claims. Employment Related Practices claims are excluded under a business CGL. In order to have protection for these types of claims you must purchase Employment Related Practices Insurance. Be sure to talk with your insurance agent today about quoting this coverage for your business.