Insurance Archives - Page 3 of 5 - Get Your Commercial Insurance Questions Answered by Licensed Professionals at My Insurance Question.com

Drone Technology

How Drone Technology impacts the Insurance Industry.

Many new technologies impact many different industries on a daily basis. As long as there has been commerce taking place, there have been new and better technologies that have come along to shake up things for most industries. No matter if it was Benjamin Franklin discovering electricity in the 1700’s, Alexander Graham Bell inventing the telephone in the 1800’s, the Wright brothers inventing the airplane in the 1900’s or Mark Zuckerberg inventing Facebook new technology has been developed longer than the United States of America has been a country. Companies that adapt to technological change are the companies that succeed in the long term. Today, many technologies are changing our lives at a dramatic pace. None more apparent than drone technology.

Drone technology is advancing at a very rapid pace. As the technology advances the capability of the drone is growing and the price to enter the market place is dropping dramatically. Because of this people are buying up drones at an enormous pace. What far too many of these drone owners do not realize at this time is the type and amount of risk they are taking by operating a drone. This applies whether the drone is being used for commercial or personal use and whether the person is on their own property or on the property of a third party. Here are a few ways that drones will impact the insurance industry now and in the future.

What industries are using drones to do business?

Construction Industry – In the Construction Industry business owners can use drones to analyze a property in ways that were not imaginable just a decade ago. They also can aide construction companies in the repair of facilities after an accident or natural disaster.

Insurance Industry – The Insurance Industry is using the technology to examine properties after a natural disaster to get a jump start on which properties need the most examination and at what part of the property. In the future drone technology may be able to aide in the prevention of fraudulent insurance claims by taking pictures of insurable assets periodically throughout the policy period.

Real Estate – Real Estate agencies are able to get an in-depth look a the properties they are working with in new ways. They can use this technology to give their clients an even better idea of the property they are purchasing or selling.

TV Media – Drones will give the television industry the ability to get to even more places when covering live footage or it can allow a camera to get to a new place that was not possible before. Laws and legislation over the next few years will determine how much this technology will be allowed in the media.

Search and Rescue – Search and Rescue groups can use drones in some scenarios instead of helicopters. This will put the operator of the helicopter in danger less often and will allow the search and rescue teams to get to new places that a helicopter cannot access.

Beneficial impacts of the drone industry on insurance.

Drones and aerial photography can speed up the processing time for claims. With the use of drones the time to process a claim may move from a few weeks to a few days to eventually a few hours. Because of this quick turn around in processing, companies in the insurance industry will be able to hire less employees or it can free up more employees to service customers in different ways. This will increase the level of service they are able to provide and lower the price they are forced to charge customers for coverage.

Fraud Prevention is another beneficial part of the use of drone technology on the insurance industry. The main way drones can aide in preventing fraud is by allowing insurance carriers to more easily monitor what a property looks like throughout the period of the policy. If they can fly a drone out to observe your property once a month or even once a quarter it is more likely to be able to prevent people from filing fraudulent claims after a natural disaster like a hurricane or a tornado. This is a prime time for property owners to claim damage to their property was caused by the natural disaster when in reality the damage occurred much sooner and was not a covered loss.

Challenges drones present for the Insurance Industry

Start-ups will pop up that challenge the current business model. A few businesses have already poppped up to serve drone users in ways the traditional insurance industry is not able or prepared to.

Verfily and Dart Drones are two such companies that have already formed to fill a void in the drone market. Verifly is a that offers drone users the opportunity to buy insurance coverage for a small amount of time when they will be using the technology. When the drone is not in use they do not have to pay for coverage of the product. This is especially beneficial to businesses who want to use the technology, but may use the drone only a few times a month or even only a few times a year. Dart Drones is a business that sprung up because there currently is no industry standardized license for operating a drone. This business offers classes and certifications on the proper use of a drone. This will allow a business owner to show his insurance company the people using the drones are trained professionals and it is a way for the employee to show they are prepared to operate the drone for the needs of the business.

Like many things in life, every problem presents an opportunity. This is very much the case in the drone industry. Successful insurance industries in the future will be the companies that can harness technologies like drones for their benefit and use the technology to gain a new share of the market they did not have previously. The companies who are the quickest to adopt this technology and offer coverage for it users will position themselves to be the leaders in this potentially high growth portion of the insurance sector.

Risk Management & Insurance

5 Reasons to Major in Risk Management & Insurance

Insurance companies are hiring

One of the main reasons people go to college is to become more employable. If gainful employment is your goal, than the insurance industry is definitely a good place for you to start to look for a job post graduation. This is because, the industry is predicted to grow for the next few decades. More insurance is needed by people than ever before. That goes for both the business and personal side of the industry. According to the Small Business Administration, there are more than 28 million small businesses in america that make up for more than 55% of all jobs in the country. All of these businesses need continually need well educated employees to service these businesses.

The workforce in the insurance industry is aging.

According to Insurance Business Magazine, the average age of an insurance agent is now 59 years of old. According to the Insurance Journal, “The average age of an insurance industry professional is 54, and 60 percent of insurance industry professionals are older than 45.” Because of this fact, there will be thousands of retiring professionals who need to be replaced in the next 10 years. This means two good things for graduates looking to get their foot in the door in the insurance industry; there are a lot of potential mentors with a wealth of knowledge and experience in this industry and there will be a lot of room for upward mobility because of the sheer fact that so many people will be retiring in the near future.

Millennials are becoming a target market

Millennials are now a larger portion of the population than baby boomers. Also, they are are now getting to the age where they are buying homes, searching for their own health insurance and even starting their own businesses. Because they represent such a large new market for the industry, insurance companies need people who can relate to this new market on their terms. Millennials shop for insurance in a dramatically different way than their parents did. The insurance industry as a whole has not exactly kept up with technology. Most insurance companies need employees to help them communicate with these new potential customers and they need to be able to reach these customers where those customers are. More and more often that place is online and through a mobile device. The older generation, who is now in control of the insurance industry, is not exactly technologically advanced. The better a millennial can help agencies and carriers reach this new demographic on their terms, the better those people can set themselves up for continued success in the insurance industry.

The chance to develop Transferable Skills

Interpersonal communication, critical thinking and computer knowledge are skills that are essential for success in the insurance industry. These are also skills that can be transferred to many different industries. No matter what industry a recent grad desires to be in, in the future, these three skills are crucial to their future success.

Interacting with a 40-year-old business owner in 2016 is much different than in 1996. In 1996, cold-calling and in-person meetings were the typical ways to conduct business. Now a majority of all business is done via email. Some business is even conducted thru social media. If you have a knack for these platforms you can position yourself as an asset to your company. Because of the age of so many within the industry these new skills will only become more valuable as technology advances.

People will always have to purchase insurance in some form or fashion

No matter what the future holds for business in the United States, insurance will continue to be a part of the economy. More people now need insurance than ever before. Whether it is health, car, home, auto or small business coverage; there will always be numerous markets for insurance throughout the United States. That means jobs will always be there for those that are willing to train hard and keep their nose to the grind.

What is the difference between a Hard market vs. Soft market

Hard market and soft market are terms you may have heard before and they generally are categorized this way due to premium trends on commercial insurance. We will discuss in more detail below but the main difference and what really dictates them are industry wide or catastrophic claims for insurance carriers across the board. In layman’s terms, a soft market has loosened underwriting restrictions and lower premium. A hard market is just the opposite. Currently the industry is in a Soft Market.

Soft Market:

Lower insurance premiums
Broader coverage
Reduced underwriting criteria, which means underwriting is easier
Increased capacity, which means insurance carriers write more policies and higher limits
Increased competition among insurance carriers.

A soft market can affect a carriers’ bottom line due to lower rates. A carrier relies on a combination of insurance premiums and investments to make money as a company. This is an area to watch when carriers get downgraded by AM Best because it’s generally due to bad investments and bad decisions on what business to write.

Hard Market:

Higher insurance premiums;
More stringent underwriting criteria, which means underwriting is more difficult;
Reduced capacity, which means insurance carriers write less insurance policies;
And less competition among insurance carriers.

Are we moving towards a Hard Market?

Mother Nature and the effects of the economic downturn have been the main causes for change in the insurance industry over the last 18 months prompting some to think we are in or heading towards a hard market. In addition, there are two other areas that can affect business insurance premiums – payroll and revenue. As companies began experiencing a decrease in revenue, employees are let go. Both their payroll and revenue are now lower, which means a decrease in premium to the insurance carrier. This is another way in which the carrier is losing money due to the economic downturn.

What can we expect from Insurance Carriers during a Hard Market?

During a hard market, underwriting gets tougher and more stringent. Meaning they are not as likely to quote a business with low payroll or in a risky class code. With each year, underwriters are becoming more sophisticated. They are looking more closely at losses, safety records and financials. Those in the industry are seeing insurance carriers dig deeper into a company’s financials than in the past. Rates will vary from carrier to carrier and will depend on a business’s inherent risks, claims history and finances. This is why it is important to always being looking for the best price + carrier you can find on a regular basis. Whether that is every year or every couple years you should always make sure that they are earning your business. An independent agent who partners with several carriers can help make this task easier for you as a business owner.

What you can do in a Hard Market when you are seeing rates increase?

While you will most likely need to be prepared for some rate increases due to the insurance industry’s hard market, there are several things you can do to help minimize the impact until the cycle turns back to a soft market:

Because the market and underwriters are becoming more restrictive, it is imperative that as a company you are more involved with your safety programs.
Take a more active, strategic approach to managing your company’s risks and claim activity.
Start your insurance renewal process earlier. Some carriers want at least 30 days to quote your business. Starting 60 to 90 days before your term ends can really help this process.
Be even more cognizant of your company’s financials – most insurers are looking at whether bills are being paid on time and many carriers are using third party companies to conduct credit scores.

Hammer Clause

A Hammer Clause Transfers Some Risk for Defending a Lawsuit Back to a Business From The Insurer if The Business Does Not Take a Recommended Settlement.

A Hammer Clause is a clause within an insurance policy that allows an insurer to compel the insured to settle a claim for an amount the insurer recommends. In some instances, a Hammer Clause is also known in some circles as a blackmail clause, settlement cap provision or consent to settlement provision. A Hammer Clause is usually a part of a directors and officers or errors and omissions insurance policy. The main purpose of this policy is to allow the insured to choose if they want to settle for what is offered or accepted by the “injured” party. Also known as the consent to settle provision, without this provision in a policy the insured is at the mercy of the insurance carriers desire to settle. Frequently, insurance carriers know the recommended settlement is the better outcome financially based on historical pay outs. The Hammer Clause can help a business determine if they want to fight the suit in court in an attempt to preserve the precious image of the company. When a business decides to do this, they take on some or all of the cost to fight the claim in court.

When Does a Hammer Clause Kick in?

A Hammer Clause kicks in when the insured refuses to settle for an amount the insured recommends. In many cases the insurance carrier will recommend to settle for an amount they feel confident will be less than the defense and indemnity costs of a particular lawsuit. Hammer Clauses have developed because insurance carriers deal with these situations fairly frequently. The carriers have reliable data to help them predict how much a lawsuit will cost. Business owners do not deal with getting sued very frequently, but insurance companies do. The Clause is typically there to encourage the business owner to settle for the recommended amount. In turn, the insured is penalized for not accepting the settlement only if the judgment amount plus defense costs exceed the amount for which the claim could have been settled. Frequently lawsuits among businesses are a time when pride and emotion can effect the judgment of many good business owners. The Hammer Clause is there to prevent pride from getting in the way of sound judgment. unfortunately, it does not prevent emotion from getting in to the way. It does spread the risk to the business owner who decides to take on the additional risk.

How Can a Hammer Clause Be Arranged?

There are several different ways a Hammer Clause can be arranged. The most common type of Hammer Clause is a Full and a Modified Clause. A Full Clause states that if the insured refuses to settle for the recommended amount they take on the full amount of the settlement costs. A Modified Clause is set up to give the insured the option of refusing to settle, but requiring them to take on some of the costs of this decision. If the costs amount to more than what was originally offered. Typically, if the insured refuses to settle than the costs will be shared at an amount of 50/50. It is not uncommon for some policies to go higher to a 70/30 split of the costs.

Important Facts to Remember About a Clause

The important part is that Hammer Clauses Exist and this is something a business owner should always speak about with their agent. A Full Hammer Clause is taking a lot of risk and it puts a business owner at the mercy of their insurance carrier. It is in the best interest of the carrier to settle quickly. For most businesses some version of a Modified Hammer Clause is best. A Modified Hammer Clause allows a business owner to make the decision for their business in the event they determine it is worth the reputation of the business to risk losing in court. When deciding what type of insurance policy is best for your business, it is important to speak long and honestly about a Hammer Clause with a skilled insurance agent.

Workers’ Compensation Insurance Limits

Workers’ Compensation Insurance comes in two parts, coverage A and coverage B. Coverage B is technically called Employers’ Liability Insurance, but the 2 types of insurance are often generically referred to as workers comp insurance in common usage. With respect to employees injured on the job, coverage A (Work Comp) provides unlimited coverage of all medical expenses, a set percentage of lost wages (which varies by state), a lump sum for disabling injuries as well as a disfigurement and death benefit. Business owners often confuse the coverage that part B limits. This effects workers comp benefits, but workers comp benefits are established by the individual state’s statutes. They generally cover all medical expenses when they are implicated. The limits on a policy only relate to employers’ liability claims.

Thus, it is important to know when employers’ liability limits could come into play. As written about in a previous blog entry, the most common types of employers’ liability claims are as follows:

(1) Third party claims: these claims are generally brought about by an injured employee against a manufacturer of the object causing the employee’s injury. The manufacturer then brings a claim against the employer for contributory negligence.

(2) Dual capacity claims: This is similar to the above, but it comes up when the employer is also a manufacturer. If an employee is injured by a defective product manufactured by his or her employer, he or she might bring a product liability claim against the employer in addition to claiming workers’ compensation benefits.

(3) Loss of consortium or other services to family members: loss of consortium and other claims such as modifications to homes or lost parental services resulting from a workplace injury can be covered.

(4) Consequential bodily injury: claims by the spouse or other family members of an injured employee arising from the injury such as a heart attack due to the stress of the news of the employee injury.

(5) Intentional acts/torts by the employer: claims covered in some jurisdictions such as knowingly allowing employees to work in unsafe workplace conditions.

Employers’ liability claims are rare. However, they can occur and are often costly when they occur. Employers’ liability coverage can cover damages/judgments, settlements, legal defense fees and other court costs. Increased employers’ liability limits generally only increase the cost of the workers’ compensation insurance policy by around 1%. Statutory minimum limits are usually (in all but a couple states) $100,000 bodily injury by accident (each accident), $500,000 bodily injury by disease (policy limit), and $100,000 bodily injury by disease (per each employee). These limits can also be increased to $500,000/$500,000/$500,000 or $1,000,000/$1,000,000/$1,000,000 in almost all cases as well as $2,000,000/$2,000,000/$2,000,000 is sometimes available.

Now that we have created a better understanding of why increased limits could come into play, what are the most common reasons for a business owner to need increased employers’ liability limits? The most common reason to get increased limits is probably that they are required by a contract important to a business owner. This is a common request, and it is the most common reason our agency sees for increased limits. However, there are several other good reasons to use higher than statutory minimum limits. To include a workers’ comp and employers’ liability policy under most umbrella policies, the limits generally need to be at least $500,000/$500,000/$500,000 and sometimes as high $1,000,000/$1,000,000/$1,000,000 limits. Another good reason to have increased limits is for businesses which are in industries that are more likely to have an employers’ liability claim arise. Such industries are generally higher risk industries which are more likely to experience devastating claims or manufacturing industries. Devastating claims are more likely to lead to loss of consortium or other services by family members type claims. Additionally, manufacturers are most likely to risk claims from disease exposures or dual capacity products liability type claims from employees. This should provide an understanding of when it is worthwhile to consider purchasing a slightly more expensive workers comp policy.

What is the Assigned Risk Provider?

The assigned risk provider is also frequently referred to as The State Fund or The Pool

Workers’ Compensation Insurance Coverage is required by law in nearly every state in the country. The basic purpose of the Workers’ Compensation Insurance is to provide wage replacement benefits and medical treatment for employees who have been injured on the job. Workers Comp prevents the employer from bearing the costs of injuries that occur during normal business operations.

Each state has their own method for how they go about determining rates on workers’ compensation class codes. Most states partner with the National Council on Compensation Insurance (NCCI) to determine rates for different class codes. Some states; like Indiana for example, have their own rating system administered by a government organization. Most use the basic guidelines of the NCCI system.

Every state also has a different way for how they go about setting up a provider of last resort for the employer’s of the state. This provider of last resort is also referred to as the assigned risk provider, the state fund or sometimes as the pool. This provider is designated as the provider of last resort for businesses who cannot find coverage through the open market. It is typically more expensive from this provider for a number of reasons.

Businesses that end up having to purchase coverage from the assigned risk provider, may not be able to find insurance coverage for a number of reasons. Lots of times it is because the business operates in a classification code that carries more risk than most carriers are willing to take. Sometimes it is because that business has had too many claims within a short period time. It also is frequently because the business just does not generate enough income for the amount of risk in their industry. States usually have a requirement that the business has to try to obtain coverage from a certain number of providers on the open market before they can apply to the assigned risk provider. Usually that number is two or three providers.

There are three main ways states go about providing employers with an assigned risk provider. Some states provide their own fund, some use NCCI and some have a partner carrier who guarantees coverage for employers who cannot find coverage on the open market. Typically states who have a strong assigned risk provider who competes with the open market enjoy the best rates on workers’ compensation insurance. There are different ways to provide this strong provider, but typically the stronger this provider is the lower the rates employers pay.

Utah is an example of a state who has its own fund. This fund is called the Workers’ Compensation Fund. This fund dominates 57 percent of the market and is the main reason Workers Compensation Utah enjoys some of the lowest rates in the country for workers comp coverage. Colorado has a partnership with a company called Pinnacol. Pinnacol was begun around the time workers’ compensation became a requirement in the state. It was designed in partnership with the state government so there would always be someone guaranteeing coverage and competing to keep the rates reasonable for the employer’s of Colorado. Both of these states enjoy some of the lowest rates on Workers’ Compensation Insurance because of their strong Assigned Risk Providers. New York is an example of the other end of the spectrum. New York has its own state fund administered as a non profit agency. New York also has very difficult regulatory compliance regulations for workers comp. These regulations force many carriers to simply not offer coverage in the state. All of these factors combine to cause New York to have some of the highest workers compensation rates in the entire country.

So administering the state fund is left up to each individual state. Again there are three main ways the states go about doing this. Some handle it themselves, others partner with an outside carrier and some contract this service out to NCCI. All three ways can be effective ways to keep costs down for the employers of that state. The strength of these pools goes a long way towards determining what employers across the state pay for workers compensation coverage.

6 Types of Insurance every Home Healthcare Small-Business needs.

Home Health Care is one of the fastest growing industries in the country. With the baby boomers moving up in age, the need for these services is growing larger every year. The need for proper insurance in these businesses is also becoming more important. For a business owner, most of the clients in this industry are nearing the end of their life. Most are not in good health. Many get hurt or are sick frequently. Protecting your business from mistakes or court costs is crucial in this industry. Below are 6 types of coverage every Home Health Care Business should carry.

Home Health Care

General Liability
Professional Liability
Business Personal Property
Hired and Non-Owned Auto
Workers Compensation
Commercial Crime/Employee Dishonesty

General Liability

General Liability (GL) Insurance, in most cases, is the most important insurance coverage a home health care business can obtain. In most states it is required by law and it is usually the first line of insurance purchased by a business. It protects your business from most liability exposures other than automobile and professional liability. Other coverages are usually added to this depending on the business needs, but all businesses need General Liability. Unlike Workers Compensation Insurance this coverage protects your business from liability to third parties.

Professional Liability

Professional Liability Insurance is coverage for professional businesses that give expert advice or provide technical services for a fee. It is designed to help protect a business against any claims of negligence. Therefore, professional liability insurance helps business owners defend themselves from lawsuits and helps pay the damages awarded in a civil lawsuit. Professional liability insurance is commonly referred to as errors and omissions (E&O) or medical malpractice.

Business Personal Property

Business Personal Property Insurance is usually an addition to a Commercial Property Insurance Policy. It protects your business from damages to your buildings and property of your business. The personal property of your employees and the personal property of others you might be responsible for. In most policies it also provides additional coverages including: debris removal, pollutant cleanup, preservation of property, fire department service charges, increased cost of construction, electronic data, newly acquired or constructed property, off-premises property, valuable papers and records, outdoor property, and nonowned detached trailers

Hired and Non-Owned Auto

This type of auto insurance coverage is for when employees of a home health care business use their own vehicle or a rented vehicle to do company business. This can be as simple as an employee running to the grocery store to buy snacks for a meeting, an employee using a rented vehicle while away at a conference or using a rented truck to transport your equipment.

Workers Compensation

Workers’ compensation insurance differs from most other forms of business liability insurance. That is because it is specifically designed to cover your employees and not third parties. Workers Comp covers insurance claims by employees in the event they are injured on the job. The function of workers compensation insurance is to insure a business is not liable for most accidents that occur on the job and employees have comfort knowing their doctors bills and some lost wages will be covered if they are hurt on the job.

Commercial Crime/Employee Dishonesty

This type of insurance coverage is mainly for employee theft of money, securities, or property. Most policies include some or all of the following types of employee crimes: forgery or alteration, computer fraud, funds transfer fraud, kidnap, ransom, extortion, and counterfeit money. It is usually written with a per loss limit, a per employee limit, or a per position limit.

Lawncare & Landscaping

Lawncare and landscaping businesses are similar yet very different.

As a business owner of a lawncare or landscape company you might have had to shop for insurance. You might have had to do this to either to meet state requirements or to make sure your business is protected just in case an injury occurs to an employee. Recently I have taken many phone calls from owners of small lawncare or landscape companies that have been asked by a client, sometimes even a home owner to provide proof of work comp coverage before they are grated the job or bid. Whether you have a small or large lawncare company chances are you have had to make a call or two to obtain a work comp insurance certificate.

When going through this process have you ever wondered how your company is classified? There are two class codes that contemplate lawncare and landscaping, 9102 and 0042. The most qualifying question to determine what class code you are in is, does your company primarily engage in maintaining already existing lawns and garden beds or is your business designing and installing landscape or flower beds. Another deciding factor is if there will be any installation of paving stones or rock beds. The class code 9102 is designated for lawncare or maintenance of existing lawns. Snow removal will also be covered under 9102 and should be discussed if there is snow removal operations in the down season of lawncare. 0042 class code is designated to design and installations of lawns and beds. Any sod laying or pavers would also fall under the 0042 class code. However both class codes do contemplate the applications of fertilizers and insecticides.

One aspect of both classes of business, that I feel I must bring up, is tree trimming. If at any time there is tree trimming the class code 0106 would need to be added to the work comp quote. Designated payroll can be added to that class or it can be added on an “if any” basis. I also must fully explain that the 0106 class code is considered high risk. It is very difficult to place with an insurance carrier.

When calling in or submitting an online quote, the first couple of questions back to you will most likely be: How many employees not counting the owner are there and what type of lawncare are you providing? If the answer to the first question is there is only the owner, which some times is the case, that would be an owner only policy. If there is one employee or more there will need to be included a total annual payroll. At that time we would figure out how to best classify you. lawncare or landscape will find the best price and insurance carrier for your company.

Attention: You’re facing a nonrenewal.

Your current insurance policy is being non-renewed due to….

You may have received a notice that starts, sounds or maybe feels something like the title above. Insurance cancellations, despite popular belief are actually more common than you would think. They are very serious and should be responded to with action swiftly, but they are not always an awful “kiss of death” from the insurance industry. Some business owners I have worked with seem to think this is so. On the other side, it is something you need to respond with action to regardless.

We will discuss today most common insurance non-renewal or cancellations we see and how you should respond to the scenarios:

…..Your reason for nonrenewal for underwriting reasons

What? Are you kidding me? Yes this is by far one of the most vague reasons, but more common than you think and as an insurance agent this tells me basically no reason why you are facing a nonrenewal. Generally this does mean one of two things. Either something about your operations (claims history, etc) or something in particular about your business makes the perceived risk for the insurance carrier less than satisfactory in their review. It could mean the company has changed their underwriting guidelines as a whole, which just happens to mean your company doesn’t fit with their strategy. Simply put insurance companies generally know what their company is good at and what they are not. Some insurance companies prefer to write roofing companies, but wont write clerical offices. many are just the opposite. Most companies fall in the middle which is why this becomes very common.

For Example: Transportation claims have been a leading cause of claims for several years, especially relating to workers’ compensation insurance. As a result in the last few years several insurance carriers who in the past would write these types of accounts have now decided they were no longer offering coverage for companies in your industry or class code. For some insured’s its no surprise when their claims have shown them good reason for this, however some trucking companies who have done well at controlling claims would see non-renewal notices for this type of reason. They were not seeing the non-renewal because of their claims or experience, but more because of the industry as a whole not performing well. This can be discouraging for these types of clients. Clients who take pride in controlling their claims and being very marketable risks to insure. These are the types of clients who need an experienced insurance agency on their side. Preferably one with several market alternatives to move to when this happens.

What to do?

Discuss with your independent insurance agent what other carrier options are available. Start this process soon so you can make an informed decision on the direction you want to go without being pushed into a last minute decision. Requesting claims history reports and Experience rating worksheets from companies you have been insured with for the last 5 years is a good start as most companies will need this in order to quote.

Nonrenewal because Agent is no longer representing this insurance carrier…

Insurance companies and agencies have contracts come and go fairly often. More often for some agencies than others. This doesn’t mean your agency is not a good agency or that the carrier you are insured with is not a good carrier to do business with. It just means that one or both of those parties have decided they are not the best partnership at this time. This decision has absolutely nothing to do with you as the business owner with the exception that you are part of the pool. Agents within the industry call this the agents “book of business”. Sometimes, for one reason or another, the agency or carrier has decided that the partnership does not fit one o f their needs at this time.

What to do?

Decide who you like more. If you have not been happy with the agency, call another agency. Especially one who has access to several commercial markets. A lot of times your policy could be moved into another agency book with a just few forms signed.

If you like the agency more than you like the carrier, discuss with your agent the alternatives they have to offer so a replacement option can be found well in advance of your renewal date.

Nonrenewal due to Claims or Non-Renewal Due to payment history issues

Don’t be discouraged. We all have set backs and things come up with payments. Insurance claims are the reason we buy insurance. These statements are not to enable you to continue on your path, don’t beat yourself up, but action and change is needed in these situations. Otherwise you are going to see the same situation in the future.

What to do?

Nonrenewal due to payment issues are a sign that you want to look at things. You might have an accounting back-log or issue that’s delaying your payments (Fix the back log issue and prioritize making payments on time). You might have cash flow issues from high accounts receivables (manage this aggressively-maybe even consider outsourcing to a collections agency if need is to that extent). Your sales are just low throughout the year or part of the year (work to improve sales or drive down costs more aggressively-most importantly budget for your known operating costs like insurance). These are the most common reasons we see cancellation of insurance. The seriousness of this issue extends into all aspects of your business and is a reason why several studies point to poor accounting practices as a leading reason why many small businesses fail.

A Non-Renewal due to claims do happen often. There is really no one answer to how to handle these because the scenarios are always different. Some carriers are more aggressive than others. Some are more reactive while others are more proactive. This is really where having an agent that understands these differences in carriers is vital to helping diagnose the best game plan for your business. For instance, if you had one claim that blew up into a much bigger issue and you have made the necessary corrective actions, most of the time that is not going to be hard to overcome in finding a competitive replacement for coverage.

But when you have shown a trend of several claims, either big or small, corrective action must be taken. If these incidents have similar reasoning than from the carriers perspective it may point to poor claims management. If sufficient corrective actions have not been made than the claims are likely to create the same or worse problems for you in the future. These types of issues must be addressed or the problem with claims and obtaining insurance will get worse over time.

Overall a nonrenewal of your insurance should not be taken with a grain of salt, but are also not a reason to close your business. The issues are sometimes within your control and many times they are something no one could prevent. The key to is to manage and react promptly. Get past the problem with a well thought out game plan. The help of a good agency is crucial to deal with these problems for your business.

Do I really need Inland Marine Insurance?

Inland marine insurance is a specialized form or property insurance. It is often referred to as equipment coverage or Floaters by many business owners and insurance agents. The primary distinction between inland marine and other property insurance is the fact that inland marine is specifically for property that is likely to be moved or in transit, or it is a highly specialized type of property that required a unique valuation.

inland marine insurance

Originally, inland marine insurance policies were referred to as Floaters because they were primarily policies written to cover cargo in transit on large marine vessels. Inland marine coverage has expanded in the U.S. to include most types of property that has an element of transportation. Today, inland marine insurance covers a wide range of property and equipment. When the property being insured does not fit within a traditional property insurance policy and is not always stationary in a reasonably fixed location it will automatically be eligible for an inland marine quote. While inland marine insurance is slightly more expensive than other property coverage, it also provides additional protection from theft or damage to the property while it is away from the primary business location.

The most common types of inland marine coverage includes construction equipment, transportation cargo, mobile medical equipment, cameras and movie equipment, musical instruments, fine arts and solar panels. Traditional property insurance is not designed to cover claims associated with these types of property. It is not uncommon for a business to purchase both property coverage and inland marine coverage together as part of a Business Owners Package (BOP).

Even though most homeowners policies provide some coverage for personal property such as fine arts, jewelry, guns, antiques, and musical instruments, these policies typically have lower insurance limits and provide less coverage in terms of causes of loss. In some instances, individuals or home based businesses find some of their property can’t be covered properly by their homeowners insurance. This is another situation where an inland marine policy could provide additional coverage.

Personal inland marine coverage is also offered in rare circumstances. It is very similar to a commercial inland marine policy, but the main difference is the named insured (i.e. the person or business buying the policy). Personal inland marine polices are commonly written for individuals who want broader insurance coverage for select property, or want higher limits of coverage than a homeowners policy will provide.

Commercial inland marine insurance represents approximately 2% of all insurance premium written in the United States. This is not a large amount, but when your business needs it it is a great thing to have. Claims on this type of coverage are much more common than many business owners assume. Most business owners and insurance managers could benefit from having a long discussion about what business equipment commonly leaves the primary insured location. In most cases it is only insured if it is located at primary insured location. Once it leaves the premises it must be insured under an inland marine policy. In many cases business owners have turned in property claims on equipment they store or use offsite, only to find their business property coverage does not cover the claim. This is frequently when business owners understand the value of their inland marine coverage. Unfortunately many times it is too late.