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.

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.

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.

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.

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.

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.

Home Sharing – The Insurance Gaps

The 2 leading home sharing apps today cover over 3 million rental listings in almost 200 countries. This is a far larger number of rooms than even the largest of hotel chains has. The growth is projected to increase over the coming years. While the homeowners benefit from the income, many of them do not think about the insurance, tax and regulatory issues involved in engaging in this kind of commercial activity. Insurance is the trickiest of these.

Homeowners Insurance Is Not Enough

In general, home insurance offers a fairly broad coverage. However, when a part of the home is being rented out to generate income, it becomes a commercial activity and this may not be covered by the policy. When a business operates from a home, the insurance company can refuse to accept a claim and may also suspend liability and property coverage either at the time of renewal or even during the policy period itself.

If that happens, there will be no protection if a guest steals from the home. Even worse, there will be no coverage if the guest causes major damage to the property or if the guest is injured while staying in the home. The homeowner will be unprotected.

There Is Coverage Available

A Landlord Policy is one option. But that is really meant for those who rent out the complete premises full time and do not themselves live there. The scope of the coverage and the cost makes this an unattractive option for those who share their homes.

Insurers are aware of the need for new types of coverage to serve the growing home sharing market. That is why many of the major insurance companies are developing policies and / or endorsements that are aimed specifically for those involved in the home sharing business. The coverage includes issues such as:

• Expenses related to furniture damage or theft by a guest
• Other structures on the premises like a converted garage apartment
• Theft of personal property
• Damage to landscaping caused by a guest
• Liability coverage for small watercraft like canoes, kayaks, jet skis etc.
• Alcohol liability
• Loss of business income – broken pipes or property damage that may make the premises un-rentable
• And more

In some cases a home sharing insurance policy can replace a normal homeowner’s policy. The issues is such a serious one that one of the major home sharing apps requires that homeowners must have adequate insurance coverage before signing up.

If you are involved in home sharing or plan to do so, it is critical that you have insurance that will give you the protection you need. Contact your insurance broker to discuss the nature of your home sharing activities and the coverage options available to you. He will be able to guide you to the right type of coverage that is cost effective while also providing you with the protection you and your home need.

Injury at Work – The Risk and Cost

Insuring your business and the people who work for you is just common sense. Besides, the obligation you have towards your employees, claims for compensation for sickness or injuries in the workplace, can be huge. But your employees may not be the only ones who work in your business premises. What about contractors and their subcontractors?

It Could Happen To You

Compensation to employees of contractors and their sub-contractors who are injured while working at site is a complicated and often contentious issue. The contractor may claim that all the required coverages are in place, but if an accident occurs and they are not, the liability could fall on you, and the primary employer. That is what happened recently at the new Tesla electric vehicle plant. A worker of a subcontractor working on the expansion of the factory was injured while on the job. It soon emerged that the subcontractor was in violation of employment laws and in breach of regulations regarding wages, overtime and workers comp.

Tesla had no knowledge of this, but when the facts came to light, they were dragged to court along with the subcontractor. The end result? The injured employee was awarded a $550,000 settlement.

Tesla is a huge organization with a vast amount of financial muscle. They will be able to absorb the monetary shock of the settlement. But what if something similar happened to you? The courts do not award settlement based on the ability of the employer to pay. It is on the basis of the amount of injury and the liability for it. In the Tesla case, the worker had fractured legs and ribs and a concussion. These are major injuries but, sadly, not uncommon in such cases. Would you be able to absorb a half million dollar payout? Or would that ruin you?

Get the Protection You Need

The vast number of insurance products available can be confusing to anyone who is not an insurance professional. Many business owners think they have the coverage they need when they do not. Part of the reason is the confusion that exists about coverage types. For example a person may read about employment practices liability insurance (EPLI) coverage and presume that since he has liability coverage, he is already protected. Not so. Liability coverage and EPLI are different and both are critical to protecting your business.

Remember that insurance is not a gamble, a luxury or just an expense. It is the shield that will protect you when you are faced with liabilities that could ruin you and your business.

When business imperatives demand that contractors need to be employed, the amount of paper work involved can be voluminous. Issues like workers compensation can easily fall through the cracks.Therefore, you as the principle employer must ensure that the contractors provide proof of their insurance coverage and that they add you as an additional insured party on the policy so that you are not in the firing line if things go wrong. In addition talk to your insurance agent to understand your possible liability and the claims that could be raised against you and get the insurance coverage you need to protect yourself and your business. If you do not have workers comp, liability coverages and EPLI you are leaving yourself dangerously exposed.

Include Home Protection in Your Remodeling Plans

There is more to home remodeling than giving the house a makeover and adding new features together with creature comforts. These are the main considerations, of course, but overlooking the protection of your renovated home could be a big mistake, one that may lead to massive financial loss. You have your home insurance policy, but that will not cover all your expenses if your home is damaged or destroyed. And then there are the hassles of repairing or rebuilding it, which are too many to list. That is why building in protection as part of the remodel is so important. Here are some factors to keep in mind when doing the planning.

Fire Protection

• Wherever possible, install a full residential sprinkler system with a water flow alarm. Ensure that the system is checked annually to keep it in working condition.
• Replace existing smoke or heat detectors with multi-criteria systems that detect combustible gases, carbon monoxide, smoke and heat. This will significantly increase the level of protection.
• Install centrally monitored fire detection units in areas where the fire risk is the greatest – attics, garages, kitchens, laundry rooms and other similar places.
• Where water based latex paint, stains, and polyurethane / acrylic coatings have been used, use fire retardant additives to reduce the fire risk.
• A whole house surge protection system will protect electronic equipment from damage if there is power fluctuation or surging.

Protection from Water Damage

• To prevent major water damage install a whole house automatic shutoff system which will detect and turn off water if the flow is excessive or if water is collecting in the wrong places.
• Water leaks commonly occur below HVAC units, skylights, terrace doors, washers, sinks and wherever, other such appliances, are installed. Installing moisture detection devices at these points will provide an immediate alert of a leak, when it is detected.
• Replace rubber hoses at water supply points for washing machines, dishwashers, sinks, toilets and so on with steel braided hoses which are less prone to damage, leaks and failure. All hoses should be replaced every 5 years or as advised by the manufacturer.
• Install floor drains in the laundry room and other places where there are water connections to carry away water in case of pipe or tank failure.
• Protect yourself from equipment damage by installing point-of-use water shutoff systems at the water supply points for HVAC units and similar devices.
• Install the washing machine at the lowest level to minimize damage if a major leak occurs.
• Install a sump pump of the right size, to remove water that may enter the basement after heavy rains.
• An automatic backup generator will ensure that all protection devices and equipment will function, in the event of a power outage.

Factoring in these changes as a part of remodeling your home may increase the cost, but the peace of mind that follows, makes it worthwhile. Talk to your remodeling contractor about the many options available. In addition, it is possible that having theseproactive measures in place, could result in a reduction on your insurance premiums. To know more about how safety features can reduce your insurance costs, contact your insurance broker.

Home Insurance: What is Covered and What is Not (Part -1)

Many people who have insured their homes tend to become complacent and think that they are covered, no matter what happens to the house. That is the biggest misconception. There are thousands of different types of home insurance and policy options. You should not take the nature and extent of your coverage for granted. Study your policy carefully and do not hesitate to ask your insurance agent for clarifications if you are not sure of anything. You can then modify the policy or take additional coverage to give you the protection you need.

Here are some of the coverages found on most policies and what you should know about them.

The Dwelling

The word Dwelling refers to the house itself and any structures, like a garage, that may be attached to it. The Amount of Insurance (Or Dwelling Limit) as stated on the policy document will show the maximum amount that the insurance company will pay if your home is destroyed by causes or actions covered by the policy. Check to see id f the amount is enough to get you a new home. If not, you need to increase your coverage.

Other Structures

Other structures, as referred to in the policy, will mean a structure not attached to the house. This covers, sheds / barns, pool houses, standalone garages etc. The cover limit for these is separate from that of the Dwelling and is usually much lower – often around 20% of the Dwelling coverage. Check to see if the coverage you have is adequate. You can buy additional coverage if required.

Personal Property

The term personal property on the insurance policy refers to all your belongings in the house – furniture, clothes, appliances, electronic items and so on. Here too there will be a specific coverage limit which is typically about 75% of the Dwelling limit. You can increase the coverage by paying more. There is an important issue to note here. There are two types of protection – “actual cash vale” and “replacement cost.” If the protection is for actual cash value, depreciation will be calculated and what you get for a 5 year old refrigerator that has been destroyed will be less than the cost of buying a new one.  If you are covered for replacement cost, the coverage will be for the cost of buying a new refrigerator at current prices.

Loss of Use

Where will you stay, till your home is repaired or till you find a new one? You are going to have to pay rent while continuing to pay your mortgage. The Loss of Use coverage will pay your rental expenses. There are two types of protection available.There is a payment limit that is the amount that the insurance company will pay, irrespective of how long you need to pay rent. Otherwise, if it is time based, all expenses will be paid, regardless of the amount. But the coverage is only for a specified time after which it will stop and you will not be paid anything.

In the next blog we will look at what is typically not covered by a home insurance policy.

New Eligibility Criteria for End of Life Care

Talking about one’s last days is not a pleasant exercise. We all know that we will die one day, but it is human nature to try and avoid discussing it. However, thinking about it, talking about it and planning for the end, unpleasant though it is, can take away some of the pain, both for you and those you leave behind.

Preparing For the End

Millions of California residents are eligible for health care benefits that will affect the nature and quality of care they will receive in their last day. The problem is that many of them do not know about it. Both Medicare and Medi-Cal (the state version of Medicare aimed at those with low incomes) are now offering coverage for discussions between patients, or their family members, and medical professionals on end of life care. This does not mean finding and moving to a nursing home or assisted living facility – those options can be exercised at the patient’s discretion. What Medicare and Medi-Cal are now offering, is planning for what happens if you are unable to communicate your wishes for treatment. For example, if you have a stroke that leaves you unable to communicate, and unconscious, do you want to be placed on a ventilator or would you prefer to pass on naturally? Who will make these decisions for you? The quality of your life, or of your death, could depend on this.

You Can Talk To Your Doctor

Medi-Cal, which covers 13 million Californians covers advance care planning between doctors and patients / family members. Doctors can bill for these discussion twice every year without prior authorization. There is no patient age limitation for this. Medicare, with 5 million members in California, offers covers for these planning discussions for those over 65 years of age and also for younger people with specific disabilities. There is no limit on the number of discussions with the doctor.

The aim of this coverage is to enable people to prepare an “Advance Care Directive” that will dictate the course of their medical treatment if they are unable to communicate these themselves. You can state what treatment is acceptable, under what conditions and when a DNR (Do Not Resuscitate) will come into force.

Many doctors are uncomfortable initiating these discussion, both on a personal level and because they feel that a patient may misunderstand the intent and become upset. If your doctor is hesitant to discuss these issues, it is up to you to carry the conversation forward, understand the options for you and your family and then formally document the decisions that have been made. You have the freedom to change your decisions at a later date if so desired.

Talk To Your Insurance Agent

Along with Medicare and Medi-Cal, some private insurance plans also cover end of life planning discussions. If you are not covered or unsure of your coverage, talk to an insurance professional to know what your status is and if needed, get an insurance plan that provides you this coverage. You owe it to yourself and those you love.

Ride-share companies riding on the American society?

Uber, Lyft and SideCar are companies that provide an app which is downloaded by both drivers and passengers seeking a taxi, to make it easy for them to engage. Traditionally, these companies should be regarded as software companies. However with megabucks riding on the transportation business, these companies have morphed into full-fledged Transportation Network Companies (TNCs), but would prefer to be called as ‘ride-share services provider’.

However, the problem does not lie merely in the nomenclature for these companies. A larger problem is the dubious means employed by these companies to dodge regulatory policies that govern all TNCs. One such regulation pertains to the insurance cover provided to drivers of their cabs.

Lyft is a conventional TNC but Uber works on a sub-contracting model. That is, their drivers are mix of owner-driven personal vehicles (called UberX) and fleet-owned commercial cabs (called Uber).  The fleet-owned commercial cabs are covered by commercial insurance but the owner-driven independent contractors are covered in a different way. Such drivers are offered non-primary coverage with $1 million coverage for driver liability and $1 million to cover uninsured or underinsured drivers. However, this cover only applies when a passenger is being driven.

During times when the cabbie is looking for a passenger or responding to a hail, a much lower insurance cover is provided to the driver:

• $50,000 injury,
• $100,000 injury total, and
• $25,000 in property damage

This means that when cabbies are not driving a passenger around, they are at the mercy of their own personal insurance which puts them at risk.

Thankfully, the Federal and State Governments have woken up to what looks like a scam, and are passing bills to regulate these companies. Two such bills being passed by California state senate are:

• AB 2293: This would eliminate the double-layered insurance cover for cabbies and require all kinds of TNCsto mandatorily have taxi-like primary insurance. This will protect the drivers against lawsuits for loss of life, and/or injury whenever they are on road, irrespective of whether a passenger is being driven or not.
• AB 612: A more important bill, this mandates these companies to conduct alcohol and drug tests on drivers at regular intervals of time. Also, no drivers can be contracted, unless a thorough background check is conducted on them.

While the ride-share companies may fall in line on the above requirements, there are other questions to be asked. Do they provide workers compensation;do they pay payroll taxes; are they avoiding the normal costs of doing business; are they taking the American society (not just the passenger) for a ride? Questions one must ask oneself before hailing these taxis.

Affordable Care that American economy can ill-afford

“The best customer service is one where the customer doesn't need to call you, doesn't need to talk to you. It just works”. - Jeff Bezos, Founder and CEO of Amazon

There is little doubt that President Obama is inspired by the Amazons of the world. That is why; he is trying to create an Amazon of sorts to hawk insurance products to the American citizen. This is what the insurance industry is calling the Healthcare Exchanges that are mandated to be setup under the Affordable Care Act (ACA), nicknamed ‘Obamacare’.

The intent behind setting up these exchanges may be a good one, albeit: to reduce dependence on insurance agents. The exchanges will help buyers compare different insurance covers and choose the one which works best for the individual/small company. Not only is the argument flawed for various reasons, Obamacare has created various other issues, which don’t make sense for the American economy.

• Reduced subscription to insurance cover: It’s well known that insurance agents act as motivators, pulling buyers out of their inertia and getting them to buy cover. With ACA slashing the commissions doled out to agents, the motivation to push insurance cover reduces, leaving more Americans uninsured.
• Replace insurance agents with Navigators: ACA aims to create a new breed of advisors called Navigators who just need to take up an online examination and pass the same to qualify.
• Poor service: These navigators will not receive commissions like agents but will receive ‘grants’ from the ACA program. This will dilute the quality of service provided and open up doors to new problems like wrong products being purchased, inadequate cover etc.
• Higher costs to small companies: Insurance agents often act as the HR departments by managing all the formalities required while selling cover to their employees. Now, with agents out of the picture, either companies will have to invest more time into the exercise, or let employees manage everything at their own risk.
• Impact on (un)employment: With more people coming under healthcare insurance, the cost to employers increases making them restrict new hiring even more. This will have an adverse effect on the economy which is already reeling under heavy unemployment.

What Obamacare fails to recognize is that health insurance contracts are complex and it needs an agent’s expertise to advice buyers on the same. It’s one thing to buy pantyhose on an e-shoppe, another to put your health and life at risk on a do-it-yourself portal. Which is why; it’ll do good to the Obama administration to remember another quote by Jeff Bezos:

“I think that, ah, I'm a very goofy sort of person in many ways.”

Do You Need Professional Liability Insurance?

Running a small business can be very satisfying. You are your own boss and can do things the way you want with, generally speaking, and no one to answer to. However, the situation also has its downside. When something goes wrong, you are the one responsible. No matter how careful you are, mistakes and errors can occur. Even if nothing is wrong, a client could feel that he has suffered because of an action on your part. Or it could be a case of malicious intent. Whatever be the reason, you could be exposed to liability that could ruin you and the business you have worked so hard to build. Thatis why Professional Liability Insurance (PLI) is essential.

What Is PLI?

Professionals are expected to possess extensive knowledge in their field of specialization. They are expected to use this knowledge and their skills to perform services for which they are retained and do it at accepted industry standards. If the services are not up to standard or if the client thinks that is the case, the business can be taken to court for the damage that the client has suffered. This is professional liability.

Professional Liability Insurance is also known as Errors and Omissions Insurance (E & O Insurance). It protects you from claims of negligence or inadequacy of service when the advice or professional services given to a client do not meet the client’s expectations. There are various coverage options including:

• Negligence (either actual or alleged) –You are covered against claims for deficiencies in professional service, such as failure to deliver, providing incorrect advice and omissions.
• Personal Injury (libel or slander) –This protects you against both libel and slander claims if the actions were committed as part of your professional services.
• Copyright Infringement – If any copyright infringement occurred during the course of your professional services, you are protected from claims for damages or expenses.
• Defense Costs – When legal defense has to be mounted against claims for activities or actions covered by the policy, the costs of the defense are covered.

It should be noted that a client may require your business to carry PLI before entering into a contract with you. This will provide him the comfort of knowing that if he should suffer on account of any acts or damage on your part, compensation will be available.

Professional liability is a serious subject and a complicated one and having insurance cover to protect you from claims and lawsuits is the best way to protect your business. Remember, even if the case goes to court and the verdict is in your favor, the costs of defending yourself could be huge. The advice of an insurance professional will guide you to the right type of cover and the amount of protection you need. Even if you already have PLI, has it kept pace with the growth and changes in your business? A professional will be able to work with you to examine your existing coverage and recommend the modification you need to remain fully protected. Consulting your insurance broker about PLI coverage is not something you want to delay.

Understanding Cyber Risk Insurance

A data breach can bring your business to its knees overnight. Ask any cyber security professional and you will be told that there is no such thing as 100% security, as Sony Pictures knows. Obviously protecting your data is vital, but if it is hacked, what do you do next? You plug the holes and improve your defenses. But the damage has been done and it could break you. Your only protection against the financial loss is to transfer the risk. And that can be done through Cyber Liability Insurance Cover (CLIC).

CLIC Coverage

CLIC is a wide ranging term that includes a variety of options. Among them are:

• Data Breach and Privacy Risk Management: This will cover the costs of managing the breach such as investigating the cause / source, fixing the problem, data subject notification, call management, checking credit for data subjects, regulatory fines and legal costs.
• Extortion Cover: In other words coverage of any losses due to extortion and any fees for professional services to deal with the issue.
• Liability for Network Security: This includes third party damages for issues like denial of access, costs related to third party suppliers and expenses due to theft of data on third party systems.
• Media and Multimedia Liability: This will cover costs related to issues like infringement of intellectual property, defacement of websites and so on.

In some cases CLIC can overlap existing insurance coverage, in part or whole. An insurance professional will be able to advise you on what you are already covered against and what more you need.

CLIC coverage can range from highly complex policies that provide coverage against a huge range of possibilities to simple policies specially created for small and medium industries. Here too, the guidance of your insurance agent will be invaluable in choosing what is right for you.

Postponing Coverage Is Unwise

Almost all states have mandatory data breach notifications requirements. This in itself can be hugely expensive. Additionally as the sophistication of the tools used to breach security becomes more sophisticated and the expenses involved become increasingly large, the risk is not something that a business can afford to carry on its own. Protecting your business with CLIC is essential.

The tribe of malicious hackers continues to grow and data breaches are becoming more common. Cyber security is essential, but it is often reactive rather than proactive. Hackers are intelligent and creative and are constantly finding new ways to penetrate security defenses. Major multinationals spend millions on protecting their data. However, they still suffer losses regularly, due to security breaches and this news hits the headlines.

Small and medium businesses may offer smaller rewards to criminals, but they are also easier targets because they do not have huge security budgets. Cyber risk insurance is no longer an option – it is essential for any business that stores sensitive data. The potential losses could destroy your business. If you are not covered or want to check if the protection you have is enough, contact your insurance broker who will be able to advise you on what you need to do.