Additional coverages keep you afloat after a flood

My Insurance Doesn’t Cover What?! Understand common misconceptions that can leave you paying for a policy that may not cover you in case of water damage, and additions you can make to your policy to ensure you're covered.

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Ongoing patterns of severe weather mean homeowners and business owners have experienced everything from record snowfalls and tornadoes to recurring storms with wind, hail and record amounts of rainfall – all leading to a record number of flooded homes and businesses.

Water claims under personal or business insurance contracts can be confusing and easily misunderstood, and standard insurance does not cover everything.

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by Michael Sullivan

Hotel Charges $127 for 3 Bottles of Water (and other reasons to read the fine print)

Photo Credit: Thrillist.com

Thrillist.com recently ran this article about a hotel charging a customer $127 (or £75 GBP) for 3 bottles of San Pellegrino during a business meeting at their hotel bar.

Apparently the charge was thanks to the hotel's absurdly high per-person minimum charge policy. Although high, the charge wasn't what bothered the patron enough to email the hotel to complain and to tweet about it, adding #ripoff. His real problem was the sneaky hidden charge. He says the server never notified him of the minimum charge:

“I have no issue if they have a minimum charge, but they need to make it clear. It is the lack of transparency that I have a problem with."

This got us to thinking about reading the fine print.

Most people skim through contracts and Terms of Service for apps (we're looking at you, Android), doctors offices, drawing entries, social media profiles, and yes - even insurance policies - without reading the fine print.

We get it - reading the fine print isn't fun, it's not entertaining, and with so much legal jargon thrown in there, sometimes it's downright headache-inducing to understand. However, by skimming these contracts, we open ourselves up to expensive mistakes. Today it might be $127 for a few bottles of sparkling water. Tomorrow, it might be finding out that theft isn't covered under your auto insurance policy.

I wrote a blog post on Auto Insurance: Dirty Secrets In Your Policy when this happened to a friend earlier this year. She'd unfortunately bought car insurance online, and the carrier's quick-quote site had failed to inform her of the fine print detailing this gap.

Purchasing insurance online seems like a fast, convenient way to speed up an otherwise unappealing task. But it begs the question - why is the lowest quote so cheap? You get what you pay for, and insurance is no different.

An independent insurance agent, like a website quote calculator, does the legwork for you - shopping different carriers for the best price. This is where they differ: an agent makes sure you're getting the best coverage for that price. Meaning? You still don't have to read all of the fine print if you don't want to … But someone that you trust has, and will sum it up for you. Because the worst time to find out that you've been paying a monthly premium for a policy that doesn't cover much is when you file a claim.

Outdoor gatherings: Making memories, not regrets

Everyone wants to be outdoors this time of year. Block parties, family reunions and other functions are often stationed outside. As host, your concerns need to extend beyond hoping for cooperative weather and stocking snacks.

In general, any time you serve alcohol, host a pool party or provide equipment for entertainment, there is an element of potential liability on your part for any injury, and your insurance may not provide coverage.

If you own a backyard pool, you may be liable if someone is injured. Consider who uses your pool. Are children supervised? Do you limit the number of swimmers in the pool at one time? Are there slides or diving boards that could increase the risk of injury? Many insurance companies do not issue policies on properties with these types of pool equipment.

Other child-oriented activities pose hazards as well. There were several reports this year of injuries to children after bounce houses went airborne. While that is not likely to happen, other bounce house injuries are common. Children can knock into each other and cause injury. Whether you purchase or rent inflatables, follow the manufacturer’s instructions for setup and storage, and take common-sense precautions to prevent injury.

Trampolines pose an even bigger risk, and some carriers exclude trampolines from coverage or charge extra premium. The U.S. Consumer Product Safety Commission (CPSC) estimated that in 2012 there were 94,900 hospital emergency room-treated injuries associated with trampolines. The agency also noted 22 deaths in the 10-year period between 2000 and 2009.

As part of its underwriting process, your insurance company may request documentation that safety measures are in place for bounce houses and trampolines.

When you serve alcohol, be especially careful. Slower response times and reduced clarity in judgment make routine games such as lawn darts, horseshoes or football more dangerous. Also, be aware that you may be held liable if a guest drives home from a party intoxicated and injures or kills someone, or damages someone’s property, on the way. Ask your insurance agent whether your potential liability would be covered by your homeowner policy. Coverage for liability arising out of serving alcohol to guests  is referred to as host liquor liability and is not covered by all insurance companies.

Location is another concern. If you rent a shelter, be sure to ask your agent if your homeowner’s liability insurance extends property damage coverage to the rented location.

Most picnics and parties go off without a hitch. However, before you plan a big event, it is a good idea to review your homeowner’s liability coverage with your agent to make sure you are covered should an accident occur.
–Coverages described here are in the most general terms and are subject to actual policy conditions and exclusions. For actual coverage wording, conditions and exclusions, refer to the policy or contact your independent agent.

By Melissa Kamp for Cincinnati Insurance Companies

Check coverage before loss of power, utilities

Check your policy before you have utility loss.

Many of us can still remember the effects of Hurricane Ike in September 2008, when the storm caused damage across 11 states. Widespread winds with gusts to hurricane force caused one of the largest power outages in the history of the Midwest, with close to 4 million customers losing power.

Of course, widespread power outages can occur at any time. Whether you are a homeowner with a personal insurance policy or a business owner with a commercial policy, it is important to understand what coverages you may have available before a storm hits.

Homeowners

Most homeowner policies exclude damage caused by utility service failure. An exclusion means that any damage caused by utility service failure is not covered by the policy. However, some insurance companies provide coverage for loss of refrigerated property by endorsement (a policy addition) or under the Additional Coverage section of the homeowner policy.

Coverage is usually limited and provides reimbursement for loss of freezer and refrigerator contents. Your agent can answer questions about what your policy covers.

Business owners

A loss of utilities can be costly. Even if your building is not damaged by a storm, a power outage could cause you to close your doors and prevent you from serving your customers. Business interruption insurance is available, but is not standard to every commercial policy. It  can usually be added for a reasonable cost.

In addition, business interruption insurance may not cover losses from utility service outages. Again, depending on your policy, you may be able to purchase a limited amount of coverage as a coverage extension or through an endorsement to your policy.

Whether you’re a homeowner or business owner, avoid surprises by checking with your agent in advance to assure you have the necessary insurance coverage in the event of a utility outage.

Submitted by Bill Gregory for Cinncinnati Insurance Companies

What Small Businesses Can Learn from ASOS Factory Fire

"Fashion website ASOS remains closed after warehouse is devastated in arson attack," read recent headlines in the Daily Mail and countless other news sources.

Reports stated that all ordering had been suspended after a suspected arson attack at the main warehouse that required more than 50 firefighters (and the evacuation of 500 workers) after the fire spread to four floors at the giant distributions center that holds 70% of the company's $270 million in inventory.

The online clothing retailer is now taking orders again, but says that about 20% of its stock was damaged in the attack. The fire and its aftermath also damaged the business's reputation and required a pause in the company's order taking and fulfillment, probable storage and relocation for its remaining stock, and property damage, among other costly impacts.

So what can small businesses learn from events like the arson attack on fashion giant ASOS?

The Asos fire raised fears that the company could be out of operation for a long time. Combined with the loss to property and stock that a company incurs when a disaster happens, a pause in business operations can be crippling to a company's revenue. Acts of Mother Nature, criminal mischief, or other accidents could find you and your business in a similar boat. Power failure from a storm, flooding, fire, hail, wind, vandalism, and equipment damage are just a few of the instances in which business interruption insurance could save your business from damaging losses.

Business interruption insurance can keep capital coming into your company in the event of such disruptions. It covers the loss of income that a business suffers after a disaster while its facility is either closed or being rebuilt. While property insurance covers only physical damage to the business, a business interruption policy covers the profits that would have been earned, allowing a business to remain in the same financial position it would have been in if no loss had occurred. It can help you with:

•    Profits – Replaces profits that would have been earned, and can keep your business 
    afloat if a loss forces you to close temporarily

•    Fixed Costs – Covers operating expenses and continuing expenses incurred by the
    property while a location is temporarily closed, rebuilt, or relocated (such as mortgage,
    advertising, taxes, and salaries)

•    Temporary Location - Some policies cover the extra expenses for temporary relocation
    and advertising fees 

•    Extra Expenses - Reimbursement for reasonable expenses (beyond the fixed costs) that
    allow a business to continue operation during property repair

Asos is now offering discounts of up to 50% as it resumes taking orders, after the blaze forced the closure of its website for two days. They launched a massive summer sale, in an attempt to woo back customers that were affected by the fire and play damage control on its reputation. That’s two full days of lost revenue, combined with reduced revenue from sale merchandise, in addition to the many other areas of business affected by the fire. To no fault of its own, Asos and other companies who incur similar, unavoidable catastrophe have to account for losses in sales and revenue above and beyond the assets lost in the fire - which can be even more damaging to a company's bottom line.

For a larger company like Asos, while the losses are higher than for smaller business, their ability to bounce back is also higher. They have more working capital, credit, and insurance coverage to work with. An unexpected loss to a poorly insured small business can be crippling. 

Asos gave a statement that it is fully insured for loss of stock and business interruption, which will mitigate the impact the fire has on its business and revenue.

Many business owners don’t have business interruption insurance, even though the protection it affords is extremely valuable in cases like these - where the losses are unexpected and huge.

Cost may be a factor in why business owners pass on this coverage, with policies ranging from $750 and up, depending on business size. However, businesses may want to reconsider interruption coverage, based on statistics showing the increasing number of natural disasters. The total has increased from 400 major incidents to more than 600 in a typical year, according to a recent survey from global insurer Allianz.

Some insurance policies that help companies affected by catastrophic losses, are: 

•    Business Interruption

•    General Liability

•    Property

•    Umbrella Insurance

If you’re curious whether your business insurance coverage adequately protects you, or need to add business income to your coverage, please contact John Jacquat at 303.834.1001, or request a free quote or existing policy review on our website.

Leave fireworks displays to the professionals

For many people, celebrating our country’s independence includes setting off fireworks on and around the Fourth of July.

While we may enjoy a spectacular fireworks display, remember that fireworks are explosives best left in the hands of professionals.

The use of fireworks by consumers is illegal in some states and strictly regulated in all, even where fireworks are labeled for consumer use. Adults planning to use fireworks to celebrate the holiday should first check the legal requirements of their state at USA.gov and take precautions to remain safe. Last year the Consumer Product Safety Commission reported that 60 percent of fireworks-related injuries happened during the 30 days surrounding the July 4 holiday. Between June 22 and July 22, 2012, more than 5,000 people were treated in hospital emergency rooms for fireworks injuries, and six were killed.

While the numbers vary from year to year, in the last 15 years between 8,500 and 9,800 people, on average, were severely injured each year using fireworks. That doesn’t include an additional 40 injuries reported in 2011 by the National Fire Protection Association (NFPA) from 17,800 fires started by fireworks, resulting in an estimated $32 million in direct property damage.

Between the injuries directly related to the handling of fireworks and those caused indirectly by the fires, more than half involve burns to the hands, head and face as well as loss of limbs. Most injuries and fires are associated with malfunctioning fireworks or improper use. Malfunctions can include unexpected detonations, unexpected flight paths and dangerous debris, while improper use can include igniting fireworks too close to someone, lighting them in one’s hand and playing with lit or used fireworks.

According to the American Pyrotechnics Association and National Council on Fireworks Safety, approximately 400 Americans annually will also lose sight in one or both eyes due to “malfunctioning” fireworks.

The U.S. Fire Administration reports that 92 percent of fireworks injuries involve items that are considered legal for consumers to use. In fact, approximately 1,000 of those injuries reported last year involved sparklers and bottle rockets – fireworks that are frequently and incorrectly considered safe for young children. Yet children between ages 10 and 14 are at three times the risk of fireworks injuries as compared with the general population.

Several organizations, including the NFPA, are opposed to the sale and use of consumer fireworks. More information and testimonials about the potential dangers of consumer fireworks is available at the NFPA website.

Fireworks laws vary widely, and warnings issued by the National Safety Council and other agencies advise that the best way to safely enjoy this Fourth of July is to watch a public fireworks display conducted by professionals.

Submitted by Wade Johnson for Cincinnati Insurance Companies

Craft Brewer Insurance Essentials: Liability Coverage

Liability risks can be some of the most 

expensive claims for your brewery.

Last month, I used a metaphor to highlight the importance of brewery-specific insurance (vs. standard commercial insurance) to your business and bottom line.

• The “Domestics”: The 7 Essential Business Insurance Policies (that you should already have).
• The “Crafts”: Brewer insurance essentials that protect your brewery better than the standard commercial ("Domestic") policy.
• The 4 P’s: Four specific areas of your brewery that have unique coverage needs (“Craft”) that you most need to protect.

This month, I’ll go into detail on the first “P,” or essential area of “Craft” coverage: liability.

The two most essential ways to Protect your Passion, or at least the opportunity to pursue it (patriotic pun intended), are through brewer-specific General Liability and Liquor Liability coverage.

We protect our passion (our breweries) by protecting ourselves from Third-Party Lawsuits. General Liability and Liquor Liability are essential to your business and your bank account. If you’re up and running, you should already have these, but there are important distinctions between general and brewery-specific coverage that can make or break the future of your business in the event of an unexpected loss.

Have you ever had a patron get hurt at your brewery? Or received a demand letter from an attorney representing someone injured by one of your patrons after they left your brewery? Then you know all too well how crucial these policies really are. If you’ve been paying the premiums but haven’t yet had to cash in on them, know that they’re worth every penny. With millions of liability claims filed each year, these policies protect your business and assets from unexpected loss, which is especially important because liability risks can be some of the most expensive business claims. 

What Does It Protect? A general liability policy can protect you against costs that result from bodily injury (to patrons), property damage, medical expenses, legal costs, judgments, and personal injury claims such as libel and slander. If you rent or lease your space, commercial general liability (CGL insurance) may also provide coverage for damage to that workplace.

How Much Do You Need? The typical General Liability limit is $1,000,000 per occurrence and $2,000,000 aggregate for the year.

Tip: Umbrella policies can provide relatively inexpensive added protection, kicking in when you exhaust the limits of your business liability coverage.

Costs: Vary considerably depending on the specific risks of the brewery, but are traditionally based on annual sales volume.  As your brewery grows, it’s important to up your insurance coverage so that you have enough protection. Check in with your agent each time you consider expanding or changing your business.

What Does It Protect? This type of policy will protect the brewery from liability if someone files a claim regarding the sale of alcohol, such as someone being injured in a car accident after drinking at your tasting room. 

How Much Do You Need? A $1,000,000 limit is often recommended.  Even if an establishment is not found liable, the average cost to defend a claim is $150,000, and in Colorado the maximum limit for an award regarding the over-serving of a patron is $219,750. That’s just one claim! The nature of your business and its perceived risks will help determine your needs. Work with an agent who is experienced in craft brewery coverage when seeking business insurance quotes. You’ve put blood, sweat, and tears into building your company. You need coverage that works just as hard to protect it.

Costs: Policy costs vary widely based on your brewery’s size and location and, again, is based on annual sales volume.

Why Choose A Brewery-specific Policy? Whether you have a full service bar or offer beer tastings after tours, liquor liability is essential to cover damages to persons and property caused by patrons who claim to have been over-served at your establishment. The sale of growlers/bombers adds another brewer-specific exposure that should be addressed by your liquor liability policy. Some carriers don’t understand the craft brewing world and the environments they create. They run from businesses that they consider “bars,” because of the liability that they carry and this lack of a full understanding of the business. Be sure the carrier you are with is comfortable with everything that you are.

Finding Brewery-Specific Coverage: Confused about where to start? As an independent agent and brewpub owner, I specialize in customized insurance policies for breweries of all sizes. I can assess your liability risks and recommend the appropriate coverage, balancing both your risk management and cost saving strategies.

Contact me, John Jacquat, for a free policy assessment and make sure your brewery assets are properly insured. Or email me at john@purerisksolutions.com.