Why your privately held business needs directors and officers insurance

D&O insurance protects your company and its board.

Every corporation relies on the guidance of its board of directors for success. Although lawsuits against larger, publicly traded companies receive the lion’s share of media attention, privately held corporations are also vulnerable to lawsuits by competitors, government agencies, creditors and employees. 

You can protect your hard-earned success by purchasing directors and officers insurance (D&O) coverage for your company. Read more of this post


by Tom Kelly for The Cincinnati Insurance Companies

Prevent Frozen Pipes in Your Home

A plumbing pipe in a friend's condo froze and burst recently, flooding two floors of an eight-story building, and leaving three and a half feet of standing water. Not only were the tenants whose condos were flooded displaced from their homes while repairs were made, their furniture and belongs were ruined.

[Fun fact for renters: your belongings are not covered under your landlord's insurance policy, even in cases of flooding caused by burst pipes. Watch out for a February blog article about renters insurance for tips on how to prevent this.]

We hear horror stories about frozen pipes and the damage they cause from homeowners and renters alike every year when the weather turns wintery. So we decided it would be helpful to share tips on how to prevent it from happening in the first place.

Frozen pipes are one of the most common causes of property damage when temperatures drop. A burst pipe can cost upwards of $5,000 in water damage, according to IBHS research.

Busted water pipes are a much bigger problem than you might imagine. According to State Farm Insurance, more than 250,000 homes are damaged annually by frozen or burst water pipes, ranking second only to hurricanes in terms of damage and repair costs. However, unlike hurricanes, frozen water pipes can be prevented.

Taking preventive measures before cold weather hits, such as keeping temperatures above 32 degrees (the freezing point for water), can prevent pipes from freezing, and the costly damage that goes with them. Most plumbers recommend keeping heat at 55 degrees when temperatures are frosty.

Homeowners - check out the tips and link below for tips on how to repair burst pipes and prevent them from freezing in the first place. Condo and apartment owners - pass this on to your board. Renters  share these tips with your landlord. Here are some simple precautions to follow:

Prevent Frozen Pipes

• Provide a reliable back-up power source to ensure continuous power to the building.
• Insulate all attic penetrations.
• Ensure proper seals on all doors and windows.
• Seal all wall cracks and penetrations, including domestic and fire protection lines, electrical conduit, other utility service line, etc.
• Install insulation and/or heat trace tape with a reliable power source on various wet sprinkler system piping. This includes main lines coming up from underground passing through a wall as well as sprinkler branch lines. 
• Place a monitored automatic excess flow switch on the main incoming domestic water line to provide early detection of a broken pipe or valve when the space is unoccupied.

Source: Insurance Institute for Business & Home Safety

For more information on how to prevent frozen pipes, and the pipes most at risk, click here.

  

NEW! Ask Us Anything: What you need to know about Cam Newton's car accident

(Todd Sumlin/AP/The Charlotte Observer)

Last month, we rolled out an Ask Us Anything column in our newsletter, so that you can send us your insurance "what ifs" and "how abouts," and we'll respond with advice and recommendations on how you can save money and protect all of your most important stuff…. All without having to ask your insurance carrier (who may note even hypothetical questions in your file. We know - sneaky!).

The first question is:  The news about  Cam Newton's car accident made me wonder what the repercussions will be for the driver who hit him. Were I to cause an accident and injure someone, famous or not, can you tell me the policy limits and coverage that I should have to protect me against injury, damage to vehicle, etc.

Our answer:  There’s really no short sweet answer to how much coverage a person should purchase. Some professionals will recommend analyzing your assets and purchasing liability limits that are of a similar value. I believe it is more complicated than that. The Cam Newton accident is a great example as to why. If the driver of this vehicle were found “At-Fault” and liable for the damages he caused, and Cam had been paralyzed (or just simply unable to perform his job any longer due to the accident), the at-fault individual would have been liable for millions of dollars. 

....Let’s see, Cam is 25 years old. In July 2011, NBC Sports posted that Cam Newton was signed to a $22 Million deal, meaning that's his market worth. That's a whole lot of money! Again, if the individual who caused the accident and injury had been found at-fault, and had he ended Newton’s career, he’d be bankrupt. Even if Cam only had to miss a few games, if those injuries cost the driver the salary Cam gets paid per game, that’s still a lot of money. In this case, both parties were lucky, with Cam being released from the hospital with only minor injuries. But it's best to protect yourself against any of these scenarios.

I’m of the belief and hope that it is rare for an insured person to sideline the career or someone like Cam Newton, Peyton Manning, or worse yet, Russell Wilson. That said, the insurance we purchase is there to protect us -- not only from everyone else on the road, but from ourselves and damages we may cause as well. 

So, back to the question at hand: how much coverage is the right amount of coverage?  This is a risk tolerance and a cost analysis question that needs to be answered. What is your net worth, how much “risk” do you want to assume, and how much do you want to pay for the “risk transfer” (insurance jargon - blah!). The bottom line is, it’s a personal preference, and one that takes some thoughtful consideration. The majority of insurance buyers out there will spend 10 times longer determining how to get the most bang for their buck shopping for their next 65” curved LED TV than considering their coverage options. (Check this one out. Pretty sweet. I found that in 4.58 seconds…. BTW, did you know that’s Cam’s 40 yard dash time?)  ;o)

I hope this is somewhat helpful. For further clarification or help determining your personal net worth and the amount of risk you are able to assume vs. transfer to your insurance policy, give me a call. 

 

Have a question yourself? Send us your insurance questions and we’ll share our advice.

The Best Worst Thing You Own

Fact: 1 In 22 Fires Is Caused By Something You Have In Your Home Right This Minute.

Laundry is a weekly chore for most of us, but did you know that clothes dryers cause around 15,500 home structure fires, 29 deaths, 400 injuries and $192 million in direct property loss each year? Most dryer fires happen in the winter, so now is the perfect time to make sure that yours is in good shape.

Causes: The #1 cause of home clothes dryer and washer fires is failure to clean. Lint is the biggest culprit. Lint traps do not catch all of the fuzzy stuff, and can gradually build up and catch fire. Lint accumulation and reduced airflow feed on each other to provide conditions ripe for a fire.      

Improper dryer vent practices restrict airflow and lead to lint buildup: the two main preventable causes of clothes dryer fires. If your dryer is installed outside of a basement, it means your dryer has longer vents with twists and turns that allow space for lint to build up. See below for tips on preventing dryer fires.

Laundry habits can also be a risk. It's easy enough to do laundry without reading drying instructions on the tag. We're all guilty of doing this. But sometimes, there are bigger consequences to drying our clothes than shrinking a favorite sweater. Items containing rubber or other materials not meant to be dried at high temperatures, and alcohol or certain sanitizing solutions that are combustible at high heat can cause a fire when exposed to dryer heat. Also, make sure that chapsticks and other plastic-containing items are removed from pockets, hoods with synthetic fur (made of plastic), etc. are removed from your laundry before you put it in the dryer.                              

Is Your Dryer At Risk?: A clothes dryer that is not working properly has an increased risk of catching fire. Signs your dryer might need service:

• Clothes are taking longer than one cycle to dry
• Clothes come out hotter than usual
• There is no visible lint on the lint trap
• Dryer repeatedly stops during a cycle
• The top of the dryer is hot to the touch while running 

Tips To Prevent Dryer Fires (from The Cincinnati Insurance Companies)

1. Have your clothes dryer professionally installed
2. Clean the lint filter before and after each load of laundry
3. Clean lint out of the vent pipe every six months
4. Replace coiled-wire foil or plastic venting with rigid, non-ribbed metal duct
5. Inspect the venting system behind your dryer for restrictions, and make sure the outdoor vent flap opens when the dryer is operating
6. Keep the area around the dryer free of items that can burn
7. Don’t overload the dryer
8. Don’t dry items made of foam, rubber or plastic
9. Have a professional inspect gas dryers annually to assure that supply lines and connections are intact and free of leaks

Smart parents monitor smartphone, tablet gifts

Set ground rules for using smartphones and tablets.

Planning to get your kids a smartphone or tablet this holiday season? 

With schools using technology in classes and kids being exposed to these devices at an early age, the question is often a matter of when, not if. Parents may have questions and concerns about how to keep kids safe online. Here are some tips and resources that can help. Read more of this post

by Kerri Hinkel for The Cincinnati Insurance Companies

Take care when naming your life insurance beneficiary

Communicate with your loved ones about your
life insurance beneficiaries and arrangements.

Purchasing a life insurance policy is an important piece of financial planning. Naming a beneficiary, and changing that beneficiary when necessary, is also a key component of insurance planning. 

Keep these tips in mind when naming a life insurance beneficiary:

Read more of this post

by Ann S. Binzer for The Cincinnati Insurance Companies

5 Tips To Avoid A Cyber Monday Hangover

Photo Credit: Shutterstock

'Tis the season for ugly Christmas sweater parties online shopping. Whether you're hitting Add To Cart on Amazon or Apple or anywhere in between, when you're putting financial information out on the interwebs be careful with where and how you share.

If the rising number of high-profile mega data breaches and cyber hacks -- most recently at Target, eBay, Neiman Marcus, and Home Depot -- taught us consumers anything, it's that sharing isn't always nice (sorry, Mom).

Cyber Monday may be behind us, but holiday gifting has just begun. No matter what you're buying, protect yourself with these 5 tips:

1. Pay with a credit card or system like Paypal rather than a debit card, to protect sensitive personal information and dispute mysterious charges if necessary.
2. Only submit payment information on secure Wifi networks. The public Wifi at the local coffee shop is great, but wait to share any sensitive information until you're surfing on a secure network.
3. Buy through reputable websites with clear contact information. This will help in the case that there is a problem with your order or the charges.
4. Look for the https://. The S stands for secure.
5. Protect personal information. Read a site’s privacy policy and understand what personal information is being requested and how it will be used.

Cyber risk is a growing threat, especially as companies and individuals alike store more (and even more) sensitive information on the cloud, with the advent of awesome, convenient technologies like Apple Pay.

Surely you've received spam or phishing email from a friend or colleague whose email account has been hacked. When you consider that we often receive sensitive information from our banks and doctors, and store passwords in our email folders, this can be a scary thought. 

The good news: Identity Theft coverage is offered under some homeowner's policies. It is usually offered as part as a very comprehensive coverage package, but inclusion of this coverage is priced competitively to policies without the additional protection.

While businesses and individuals alike have been slow to adopt cyber coverage, cyber-specific insurance policies can help reduce potential financial losses from cyber risks and identify theft. Home Depot's data breach cost the company an estimated $62 million, for example, but was offset by $27 million it expects to be reimbursed by its insurance.

More questions on insuring yourself against cyber risk? Give us a call and we're happy to answer them.