Several months ago, a client of mine lost their commercial building to a fire. A total loss. It was a really unfortunate situation.
There’s been a lot going on since then, but I’ll fast forward to the claims process today.
In speaking with the claims adjustor, my client was told he should feel really good about his policy coverage. That you “should be thankful that your broker put together a nice comprehensive policy for you” with all the bells and whistles.
My client called me to share the news of this conversation. In a time of difficulty, it was refreshing to hear such a strong statement from the carrier side.
As their agent/broker, this made me happy to hear. It’s NEVER fun when you get a call from a client sharing they sustained a property insurance loss. These are really technical policies with so many coverage types, endorsements, and exclusions that vary from carrier to carrier. In fact, I would argue that commercial property insurance is the most complicated line of insurance to deal with after sustaining a loss.
The thing is, you can’t just get a “Cadillac” policy for just any old subject of insurance. Whether it’s for Commercial Property, Liability, Workers Compensation, or any other form of insurance, the subject of insurance needs to be well maintained in order to get quality coverage from an insurance policy.
It’s like having good credit. When you do, you get better interest rates, better loans, better terms. You have banks lining up wanting to lend you money.
The same goes for insurance policies. You see, my insured’s commercial building was totally renovated within the past 10 years. Roof, plumbing, electrical, and heat were totally updated to modern standards. Carrier underwriters LOVE to see this. This allowed me as their agent/broker to build a quality policy that ultimately came through in a big way during my insured’s greatest time of need.
This doesn’t just apply to commercial property insurance either. Take Workers Compensation insurance for example. Your company has a sound safety program/culture with favorable claims/loss history. As a business owner, you conduct employee screenings, background checks, physicals, etc., etc. When all these details align, you will have carriers fighting to insure your business knowing you take the necessary measures to try to prevent claims from happening in the first place.
Or let’s talk about Commercial General Liability. You can get better terms and pricing if you have proper contracts in place with vendors and other interested parties. Sound quality assurance procedures for your products or operations. These things and so many more will help not only mitigate claims, but it’ll help swoon underwriters like you’re a contestant on The Bachelor (ABC).
The list goes on with all types of business insurance policies.
It’s then up to your insurance agent or broker to put together a quality policy to protect your business. This too is extremely important because, like all industries or professions, there are a lot of good insurance professionals out there but bad ones too.
At the end of the day, you have to give in order to receive it. You make sound business decisions and have proactive risk management procedures in place, you can get exceptional insurance coverage at a reasonable price. But if you don’t really care about the important details and don’t put much TLC into what you do, don’t expect the world from your insurance policy. You don’t give a crap? Well, you will only get crap in return.
As for my client who lost their building, the carrier has already paid out $180,000 of almost $500,000 in losses. They have superior coverage because they have a superior broker of course ;). But more importantly, superior coverage because they had a superior building which was well maintained with love. In return, this allowed me to build the “Cadillac” insurance policy that will ultimately keep their asset protected and give rest at night knowing they will be made whole again by the carrier in response to this unfortunate loss.
California Assembly Bill 5 (also known as CA AB 5) was signed into law in September 2019, implementing a new test all employers must use to determine if a worker is an employee or an independent contractor under the California Labor Code. The law may impact who you cover under your workers’ compensation insurance policy.
While the bill is effective January 1, 2020, the part that affects workers’ compensation insurance coverage goes into effect July 1, 2020.
Know The Facts
- The new legislation is not based on policy effective date. As of July 1, 2020, as an employer, you’ll be subject to the new test. This means that a worker could be classified as an independent contractor before July 1, 2020 and as an employee after July 1, 2020.
- If you’ve employed an independent contractor that can supply you with a certificate of workers’ compensation insurance that is effective during your policy period, he/she would not be considered part of your employee roster. You would not report payroll for him/her.
- In order to avoid an unexpected change in exposures at time of audit, you must include payroll for all employees defined by the statute as of July 1, 2020.
- The statute applies to businesses headquartered in California AND businesses headquartered elsewhere with employees working in California.
Got questions? Contact me. I’m here to help you with this law change in any way possible.
With more businesses set to slowly open their doors again, I’m certain that insurance carriers are going to start adding this Communicable Disease Exclusion onto Commercial General Liability insurance policies at renewal. I’ve reviewed various policies of my insured’s to see if this exclusion is tucked away in any current policies and I am not seeing much of it at this time, but I bet it’s coming. Here’s the policy form/exclusion I’m referencing:
It’ll be interesting to see how insurance carriers respond. Will they potentially remove it for an additional premium, or if it’ll be straight non-negotiable?
My suggestion is to keep your eyes open on your general liability policy to see if this is added at renewal and what the potential repercussions are for your business.
I think in due time, new regulations will be put in place within the insurance industry to address communicable diseases, but I feel this is critical to look at now from a Risk Management standpoint.
A lot of businesses are shut down right now and suddenly there are many individuals who find themselves out of work. Premises’ that are typically bustling with business and commerce are at a standstill sitting vacant as we wait for this Coronavirus pandemic to pass.
I’m hoping this doesn’t become a trend but just this morning alone, I had two different retail clients call in to report claims burglary and theft overnight with the doors busted open as a point of entry. Luckily due to monitored alarm and surveillance cameras, the burglars didn’t seem to get away with much based on early indications.
This serves as a reminder to be vigilant with your business premises and your neighbors in the surrounding areas.
Here is a Burglary Prevention Checklist from The Hanover Insurance Group to help get your brain thinking about measures you can take to help prevent burglary and theft at your place of business. We have enough to deal with right now, so let’s try to eliminate additional perils like this if at all possible.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans
to small businesses.
Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.
The administration soon will release more details including the list of lenders offering loans under the program. In the meantime, the U.S. Chamber of Commerce has issued this guide to help small businesses and self-employed individuals prepare to file for a loan.
Here are the questions you may be asking— and what you need to know:
Two Things You Can Do Today to Lower Your Business Insurance Premiums to Weather the Coronavirus Storm
Last week was tough. Call after call, I spoke with business owners and others in management roles who are feeling scared and anxious right now for obvious reasons. Due to the effects of the Coronavirus, they’ve already had to either lay off staff or furlough their hours to save on operational costs.
Some were calling to inquire about canceling their insurance coverage entirely until we get through this storm. My advice has been that we might not need to go down that road right now.
Before taking such drastic matters, here are two things you can do today to lower your insurance premiums without sacrificing or eliminating your current coverage:
- Review your estimated annual sales with your commercial insurance agent/broker and make adjustments to your liability insurance policies. Liability insurance premium is typically rated in accordance with gross annual sales/revenues, subject to audit at the end of the policy term. Rather than wait for the audit at the end of your current policy term, adjust your policy now to get the premium down which will help save on your monthly costs.
- For your Workers Compensation insurance policy, review your estimated annual payrolls and make any adjustments now rather than wait for the annual audit or canceling the policy altogether. If you’re at a standstill and do not have any payroll, or very minimal payroll, make the adjustment now.
Insurance carriers are making billing accommodations and extending grace periods for cancellations by as many as 60 days. Call your insurance carrier billing departments right away and explain your situation. Do not wait. They’ll most certainly make accommodations based on the current state of affairs.
Times are challenging for the entire world right now, but I believe we’ll get through this just as fast as we were thrown into it. Although insurance premiums aren’t the only operational cost for a business, they are one that we can control now by taking these types of measures. By doing this and maintaining your coverage, you won’t have to go through the process of re-applying for insurance once things are back to “normal.”
This too shall pass.
Well here we are, Monday, bunkered up in our homes with our tribes self quarantining ourselves from society the to help stop the spread of the Coronavirus. It’s eerily slow at work. There’s so much uncertainty in the air. I am positive this will pass soon though. As long as we all follow directions and do our part to help slow the spread of this thing. And the faster we stop the virus, the faster we can get this economy back in motion and pumping again.
I’m personally not worried about getting sick from the Coronavirus, I’m just anxious about the repercussions it will have on society and the economy.
I was skeptical about all the news at first but to those who don’t want to listen to authority, stop being stubborn and just listen to this. It’s 18 seconds of some of the best advice you’ll Get on the Coronavirus:
I don’t want people to get sick but most importantly I think we all can agree that we just want to get back to “normal” life and this is the only way we’re going to get there.
The faster the better
I hope you’ll catch my radio interview hosted by Candy Messer of Affordable Bookkeeping & Payroll. We discuss all things Business Insurance and Risk Management. From General Liability for a home based business to Cyber Liability and Employment Practices Liability for small to middle market companies. You can catch our interview HERE. Also, link included below.
Topics include: General Liability Insurance, Errors & Omissions Insurance, Cyber Liability Insurance, Businssowners Insurance policies, Employment Practices Liability, Workers Compensation, Risk Management.
State Compensation Insurance Fund, in partnership with the Department of Homeland Security, offers free seminars on Active Shooter Preparedness. These half-day courses provide important information about useful actions you can take to prepare for an active shooter event.
Participants will learn:
• The characteristics of an active shooter situation.
• How to identify and report criminal planning and preparatory acts.
• How to prepare and respond to active shooter and workplace violence incidents.
Each seminar is fast-paced, interactive, and includes lessons learned from previous active shooter incidents.
Local Southern California Dates are:
San Diego, CA
February 5, 9am – 12 pm
University of Phoenix, 9645 Granite Ridge Drive
Monterey Park, CA
February 12, 9 am – 12 pm &
1 pm – 4 pm
State Compensation Insurance Fund, 900 Corporate Center Drive
Even though the Trojans were throttled by the Ducks 56-24 yesterday at the Coliseum, we enjoyed our day tailgating and watching college football under the lights on a perfect Fall Saturday. Spent the day with some great friends and broke away from the Orange Curtain for a night. #ILoveLA.