Monday, December 26, 2016

Insure Your Business Before Disaster Strikes

As a business owner, you know how important it is to carry insurance. But many businessmen look at insurance as a necessary evil – one that must be dealt with and gotten out of the way as quickly as possible, and at the lowest cost. With margins always under pressure and balancing income and expenditure a constant juggling act, it’s easy to consider only what is likely to happen and insure only against that in order to keep premiums down. What you need to insure against are the things that could happen.

The Unlikely Happened

A fire broke out in the shop next to a specialty food store in Denver. The food store escaped fire damage but the water and smoke damage from next door caused it to down shutters for a year. The owner had $10,000 in lost income coverage, but that was not much help in the $100,000 of lost business in the 12 months the store was closed.

A Florida business owner had an old dilapidated barn full of imported furniture. The cost of insuring the old building, that would have to be pulled down sooner or later, appeared to be prohibitive and so the owner decided against it. When a flood hit the area, the furniture was heavily damaged and had to be sold off at a heavy discount. The overall loss was around $7,000. The gamble did not pay off.

The owner of a family run business passed away and his wife took over. Sometime later she found an employee had been embezzling money. Since it was a family owned business, the idea of taking out business fraud insurance never occurred to the owner. Recovering from the loss was a long struggle.

Think Of the “What Ifs…”

Suppose you run a small business out of your home. You keep inventory in the house or in another building on the property. You have homeowners insurance on your property and think everything in it is protected. But if there is a fire and the inventory is destroyed, the policy will not cover the loss.

Its human nature to not dwell on the worst case scenarios. But that does not always make good business sense. You can’t insure against every possibility. Paying for coverage to protect your business from being destroyed during an alien invasion by fire breathing dragons may be going too far. But there is a difference between the unlikely and the impossible. The unlikely does not always happen to the other guy. It could happen to you and if you have not planned for the possibility, your business may suffer more than you thought possible or may even cease to exist.

Get the Coverage You Need

Professional help in deciding what kind of insurance coverage your business should have, and how much of it, is best done by experts. Contact an insurance broker to have your coverage examined. If there are shortfalls, the broker will help you to get the additional coverage you need. Your premiums will go up and you may have to do a little more juggling of the income and expenditure. But if the worst should happen, you will still have a business and income and outflow to balance instead of nothing at all.

Friday, December 16, 2016

Life Insurance Benefits You May Not Know Of

Families today are scattered like never before. Education, work, marriage and a range of other factors mean that relatives now live not just across the country, but across the globe. While they usually try to keep in touch as much as possible, details of how life is lived, including financial issues, are often lost. This includes insurance benefits. Many people wonder if there are insurance benefits that may be due to them which they are unaware of. Or they may think that they could be beneficiaries of a policy, but do not know how to find out. According to Consumer Reports, an estimated $1 billion in benefits from life insurance policies are lying unclaimed. One reason for this is that locating possible insurance policies in which a person is a beneficiary used to be very time consuming and difficult. The number of insurance companies, the place where the policy was issued and the confidentiality and other restrictions on releasing the information made the search frustrating and legitimate benefits were often not found.

There Is Now A Way to Find Out

A recent press release by the California Department of Insurance says that there is now an online tool available that can help people search for possible life insurance or annuity proceeds that may be due to them. The search covers the entire nation. The tool has been created by the National Association of Insurance Commissioners (NAIC) and has been specifically developed to help those who think they, or others in the family, are beneficiaries of a policy but do not have the details, such as the name of the insurer or the policy number, that will help them to get the information they need.

Requests for information are encrypted to ensure confidentiality.When the tool is used to request information on possible unclaimed benefits, the insurance companies will search through policy holder information and if possible matches are located, report these to the relevant state insurance departments. The companies will then get in touch with the beneficiaries to determine the validity of the claims and process them accordingly. There is no charge for using the tool.

The Benefits Are Yours – Claim Them

There is often hesitation in searching for life insurance benefits. People feel that searching for money in the estate of a deceased person is questionable and self-serving. What should be remembered is that the policy was created with specific aims in mind and if these are not fulfilled, in terms of giving the beneficiaries their rightful proceeds, the purpose of the policy and the wishes of the person who had it are not being respected. Unclaimed insurance benefits remain in limbo and do not do anyone any good.

If you want to know more about the tool and how to use it, visit the California Department of Insurance website. Alternatively, you can get in touch with your insurance broker and ask for guidance on how to proceed.

Wednesday, November 23, 2016

EPLI - What It Is and Why You Need It

EPLI stands for Employment Practices Liability Insurance. This is not the same as the general liability that most businesses do (or at least should) carry. EPLI is to provide specific protection to business owners from claims by employees that their legal rights have been violated or that they have been treated unfairly.

Your Employees Are Like Family

This is a common feeling among small businesses. Everyone knows everyone else and meets socially and helps each other out on family matters etc. So what is the need for EPLI? Isa supervisor who has been with you for 10 years suddenly going to sue you? Maybe! It does happen far more frequently than you think. It’s like a close-knit family that suddenly and irreversibly falls apart. The fact that the reason is foolish or illogical doesn’t matter when emotions run high. Yes, suing an employer is often an emotional reaction. Studies show that the most common reasons for employment practices lawsuits are:


  • Retaliation for a real or imagined issue – 44.5%
  • Race-related issues, both real and imagined – 34.7%
  • Disability – 30.2%

You cannot afford to ignore these numbers.

Frightening Facts about Employment Liability Lawsuits

If you still feel that EPLI is not important, the following may help to change your mind.

  • Your most innocent remark or action can be misinterpreted. Anyone can have a bad day and an act or words that were a joke yesterday could cause anger today. That anger could lead to a lawsuit.
  • The fact is that a business is 3 times more likely to be hit with an employment practice lawsuit than it is to experience a fire.
  • The courts are becoming more sympathetic to plaintiffs in such cases. The average cost of an employee lawsuit has risen by over 25%, over the last 5 years.
  • Businesses with 15 to 100 employees are the most common targets for federal discrimination claims.
  • Only about 30% of small businesses have EPLI.
  • Many business owners think that their general liability coverage protects them against employee’s lawsuits. That is not correct.

What EPLI Covers

EPLI coverage may vary depending on the insurance provider. In general, it includes:

  • Wrongful termination
  • Breach of employment agreement
  • Failure to create or enforce adequate employment policies
  • Invasion of privacy
  • Discrimination
  • Violation of FMLA
  • Workplace harassment
  • Retaliation

You probably have a number of different insurance coverages for your business. They are focused on protecting you from issues beyond your control or from actions against you by outsiders. But what about when a lawsuit comes from within? Without EPLI you could be left exposed to huge losses. Talk to your insurance broker to check if you have the coverages you need. If you do not have EPLI coverage, your broker will be able to suggest the right type of policy for your business.

Thursday, November 17, 2016

Don’t Let Wildfires Burn You

Everyone who lives in California knows about the problems of wildfires. However, many do not truly appreciate how big and serious the problem is. To get a better understanding of the risks that homeowners face, have a look at the state government’s Statewide Fire Map. Your home is the biggest investment you will make for your family and it is in danger. This does not mean that you need to live in a state of panic or constant fear. Taking the right precautions to protect your home and ensuring that you have the insurance coverage you need will help to safeguard your home and your financial security.

Protect Your Home

There is plenty of material available online on how to make your home fire resistant. Study it and take the precautions you can. However, what is often overlooked is the need to create a defensible space around the house to reduce the risks of fire reaching the structure.This space is divided into 3 separate zones, each with its own specific precautions.

Zone 1: This is the area closest to the house and covers a distance of 0 to 5 feet. The key precautions are:

  • Use non-combustible material for mulches.
  • Make paths and walkways of brick, stone or concrete.
  • All plants and shrubbery in this area should be non-combustible or fire resistant. Use low height plants that are in irrigated flowerbeds or parts of the lawn that are regularly sprinkled.
  • Do not store firewood, inflammable liquids or corrosive chemicals in this area or under a deck.

Zone 2: This covers the distance of 6 to 30 feet from the house. You should:

  • Keep a distance of at least 10 feet between trees. This will reduce the hazards of a fire jumping from one tree to the next. On slopes, increase the distance between trees as much as possible.
  • Trim any branches that hang over the house.
  • Remove shrubs and dead vegetation from under the trees.
  • Keep the trees and plants well-watered.
  • Move RVs, trailers, sports vehicles etc. to a distance of 100 feet from the house.

Zone 3: This is the final zone that covers the distance of 31 to 100 feet from the house. This is where you need to:

  • Clear away all dead trees, plants, shrubs, and other such material.
  • Trim trees and shrubs in such a way that ladder (i.e. near to the ground combustible material) is minimized.
  • Clear the area under the trees of all dry plants, grass and foliage.
  • If the house is on a slope, extend this zone to 200 feet from the structure.

Get the Insurance You Need

Taking steps to protect you home from wildfires is important, but there is no way to be completely safe from them. If the worst should happen and your home is damaged or destroyed by fire, having the right type and amount of insurance coverage will cover the cost of repairs or rebuilding. Talk to your insurance broker to be sure you have the coverage you need. Do not postpone doing this. As the wildfire map shows, they can happen anywhere, at any time with no fore warning.

Sunday, October 23, 2016

Home Sharing - The Risks

Home sharing platforms like Airbnb have created a new business opportunity and source of income for homeowners and tenants across the country.  However, there are risks for the occupant. The horror stories about assaults, condos being held hostage, theft and property damage are well known. What is often overlooked is the risk for the property owner.  If you are a building owner, you need to be aware of the following issues.

Who Is Staying There?

If you own a building and the tenants are on Airbnb, you could be exposed to serious risks. Unlike a traditional rental which requires a detailed application process, extensive information collection and verification about the tenant, home sharing allows free access to your property. Legally speaking, you have no contract with the Airbnb tenant and so you have little or no leverage if an incident should occur. Also, the rights, duties and liability limitation of the building owner in regard to a home sharing tenant are still a grey area.  That only increases your risk.

What about Renter’s Insurance?

Your tenants may assume that their renter’s insurance will cover them for any loss or damage caused by the home sharing guest they take in. It may do so, but it also may not. There is no guarantee on this and the protection available will depend on the specifics of each renter’s insurance policy.

What You Can Do To Protect Yourself

There are a few things a building owner can do to protect his interests. Key among them are:

  • Prohibit home sharing.This is the most comprehensive option. Have your lease agreements drafted to include the clause that the tenant is prohibited from using Airbnb or other home sharing services. In addition, it is a good idea to have an addendum to the lease agreement which clearly states the owner’s position in regard to home sharing and details the risk for the owners, the tenants and others in the building. The tenant must accept and sign the document.
  • Monitor Home Sharing Platforms. There could be some tenants who sign a lease that prohibits home sharing, but think that they can bypass it and share their homes on the quiet. It is easy to claim they have large families and relations keep visiting them. The best way to control this is to monitor Airbnb and other platforms to look for any listingsof the properties you own.
  • Consult Your Insurance Broker. Insurance is a complicated issue, especially when multiple coverages are involved. Where does the property owner’s coverage end and the tenant’s begin? Who is liable for what damage or loss caused by a home sharing guest? Only a professional will be able to clearly define where you stand and advise you on what additional coverage, if any, you need to protect yourself from loss or liability caused by home sharing.

Remember, home sharing allows people whom you, the property owner, know nothing about to occupy the premises you own. There are legal, financial and ethical issues involved and you need to protect yourself.

What You Need To Know About Rental Car Insurance

Despite the growing popularity of ride sharing, renting a car is often the only option in some circumstances. For example, if you are travelling or need a temporary replacement while your car is being repaired, sharing a ride, will not give you the mobility and flexibility you require. When using a rental, you need to be sure that you have the insurance coverage you need. Check your car insurance policy’s coverage to know where you stand.

Transportation Expense Coverage

An auto insurance policy is typically in two parts. Collision coverage kicks in when your car is damaged in an accident. Comprehensive coverage covers non-accident related damage or loss such a theft, fire, vandalism, etc. If you have collision coverage, the policy will pay for car rental after an accident. If you have comprehensive coverage, rental will be paid for if the vehicle is unusable due to issues covered by that coverage. If you have both, then you are protected under both circumstances.

How Much Reimbursement Will You Get?

Whether you get enough reimbursement will depend on the specific terms of the policy. For example, if you drive a luxury sedan, it does not automatically follow that you will be entitled to an equivalent rental car. The reimbursement could be only for a compact. Check the policy terms. It is not just a matter of driving a big car. If you normally drive with a car full of passengers, how will they fit into a compact vehicle? The difference between the reimbursement for a compact car and the rental of a larger vehicle which you need could burn a big hole in your pocket. If the transportation expense coverage is not enough, you can modify the policy to have the reimbursement increased. Ask you insurance broker for details.

Coverage While Travelling

Whether your car insurance policy covers you while you are travelling, either on work or vacation, depends on two factors -What coverages are in the policy and where you are travelling to. Check your collision coverage to see if you are protected. As for where you are travelling, in general car insurance policy cover travel and car rental anywhere in the U.S, its territories, Puerto Rico and Canada. The coverage will also depend on your deductible. If you have more than one vehicle on your car insurance policy, the lower deductible is what usually applies.

Do You Need The Collision Damage The Rental Company Offers?

You will normally be offered a Collision Damage Waiver at the rental counter. If you are already covered, you may not need it. However, if damage should occur, the rental company could require that payment for the damage be made when the vehicle is returned. You will get reimbursement from your insurance company, but that may take some time. And you need to have the money available to make the payment when returning the car. So, keep both issues in mind when deciding.

This is a complicated issue with a lot depending on the fine print of your auto insurance policy. If you are unsure of what coverage you have or want to know if it will be enough to cover a rental car you may use, talk to your insurance agent to get a clear picture of where you stand. You can then decide on increasing the coverage, if it is required.

Thursday, September 29, 2016

Would you want to Share Your Home with a Burglar?

According to the police, there is a new trend in Bay Area crime – theft by home sharing “guests.” A case in point is that of a man who recently rented a Mountain View home on a home sharing site. He canceled just before he was due to occupy the premises. The premises was burglarized shortly afterwards. A few days later the homeowner called the police to say that someone had opened a credit account in his name and was due to pick up an expensive mobile phone. The police caught the man at the store and arrested him. A large number of items stolen from the home were found in his car.

Consequently, if you intend renting your home to vacation renters, please be cautious. Use the tips given below to keep your property safe.

How To Minimize The Risk:
  • A mention in a posting that a room or closet will remain locked is an indication that items of value may be in the home. If this is to be done, do not mention it in the post but discuss it with the renters one-on-one before renting the premises.
  • Do not leave valuables or important documents in the home, while it is being rented out. If taking them with you is not possible, lock them in a safe that is secured to the floor.
  • If possible try to meet the renters in person. This allows you to evaluate the kind of people they are. Meet them in a coffee shop or other place where their faces will be captured on surveillance video. If the renters cannot meet you in person and do not have a convincing reason for not doing so, that could be a sign that they have something to hide and are not the kind of people you want in your home.
  • If they do meet you in person but their statements are vague or inconsistent, they may not be people you can trust. Also, ask for identification and take a photo of the document.
  • If your premises is too large for the number of people who the renters say will be staying there, it could be an indication of an ulterior motive.
  • Thieves shy away from surveillance cameras. If you have cameras in your home and the renters object to it, they may have something to hide.
  • Be careful of last minute urgent rentals. This is a ploy of robbers who hope that in the rush the homeowners will overlook the precautions they should take.
  • Be suspicious of last minute cancellation, as in the story at the beginning of this blog.
  • Trust your instincts. If you feel that a renter is not to be trusted, do not give your home to him.
If you are planning on renting out your house or apartment on a home sharing site, following the advice given by the police is not enough. You need to be adequately insured to protect you from any loss that may occur. Contact your insurance agent to discuss the coverage options available to you. There is a lot that can be done, often at a reasonable cost, to provide you with the protection you need.