R&R Insurance Blog

Have you ever thought about what would happen if you exceed your liability limits?

Many people believe that they are good drivers, and therefore do not need a lot of insurance. However, we would like to point out that no driver ever thinks that they are going to have an accident. Yet, in Wisconsin alone there are consistently over 273 accidents per day, and more than one of those accidents will result in a fatality  (WI DOT).

Wisconsin law requires you to have a minimum liability coverage of 25/50/10, which means:

• $25,000 per person for bodily injury or death
• $50,000 total for injury or death to multiple people per accident
• $10,000 for property damage to others

Though some may take this as the state saying that this level of coverage is good enough, we would never advise anyone to have liability limits so low. In fact, some quality insurance carriers will refuse to write anything lower than 100/300/100. There are many good reasons for this.

Perhaps the easiest to understand is the limit for property damage. This coverage would pay for damages to other vehicles, street lights, fences, etc. Now think about your daily commute. How many vehicles do you drive next to every day that are worth more than $10,000?  A brand new Ford F-150. A two-year-old Chevy Equinox. Any Lexus, BMW, or Acura. A limit of only $10,000 may not be enough to repair and certainly not enough to replace many of the cars on the road. But when this limit is exhausted, it is not the end of the claim.

The owner of the car is going to want the vehicle fixed or replaced, and they are not going to pay for it themselves. When the $10,000 limit is cashed, your bank account and other assets can be used to pay for damages. One way or another, someone else is going to pay for those repairs. Either the liability limits on the policy will be high enough for the insurance carrier to cover the cost, or your savings, assets, and/or future paychecks will.

What is harder to understand but is also a bigger threat to your future earnings is the limit for bodily injury. Medical attention and emergency services do not come with price tags. We have a much more difficult time wrapping our heads around how much any type of surgery or doctor’s appointment will cost. However, I can assure you that these expenses can easily exhaust a low limit.

Recently, I had a small and planned surgery. I was only under the knife for 45 minutes and only in the hospital for 3 hours. No follow up appointments were required. Want to know what the final bill was to my health insurance?  Answer:  $22,000. A surprising number, right?

Now imagine that instead of a planned surgery, there was an emergency situation – like a car accident. Instead of one person being injured, there were multiple.  Instead of a few hours at the hospital, the victims needed a few days, and everyone needed physical therapy and months of follow up appointments with specialist.

Can you see how limits of $25,000 per person and $50,000 per accident are not only inadequate, but also extremely dangerous?

Just like the owner of the brand new Ford F-150 will not want to pay for his car to be repaired if you are at fault, you can bet that the injured victims of an auto accident are not going to pay for their medical expenses if you are at fault. Once again, either the liability limits on your policy will be high enough for the insurance carrier to cover the cost, or your savings, assets, and/or future paychecks will.

For more information please contact your Knowledgebroker. Be sure to ask him or her about your liability limits and if an umbrella policy would be right for you.

There will always be circumstances beyond your control that can affect your business. Preparing for the worst can minimize the risk. 

A disaster is an event that would cause the inability to continue your normal business operations. Fortunately, these situations are rare, but overall billions of dollars have been on the repercussions of natural disasters. Not to mention all the revenue businesses have forgone while recovering from the disaster and getting their operations back up and running.

Some of the most recognizable disasters are:

• Fire                                                    
• Tornado                                           
• Hurricane                                         
• Flooding                                          
• Severe Storms
• Wild Fires
• Power Failure
• Riot / Civil Disorder

Indirect disasters can also be devastating. These trigger a domino effect that can be felt through all members of your operations and supply chain.

• How would your business operations be affected if your biggest customer’s purchases were cancelled due to a disaster?
• How would your customers be affected if your biggest supplier was down and you were unable to get your supplies and merchandise to fulfill purchase orders?

However, there are steps that can be taken to prepare your business for the worst, should disaster strike:

• Review your insurance:
  • Know the value of your building, contents, and equipment.
  • Review your business interruption expenses. Can you meet payroll, pay vendors, pay rent/mortgage, purchase equipment and supplies?
  • Estimate the length of time it would take to rebuild or relocate to get the business functioning again.
• Back-up your data.
• Mark your main water shut off valves and fire extinguishers for quick access.
• Discuss disaster planning with your management team. Be sure they know what steps each of them would be responsible for in the event of a disaster.

Up to 40% of businesses never recover after experiencing a disaster. However, only approximately 30% of businesses have a disaster plan. Don’t be caught unprepared. Start planning today.

Contact a Knowledge Broker to discuss how you can better protect your business in a time of crisis.

Additional disaster resource Information can be found at:

• https://www.redcross.org/preparednessfastfacts
• https://www.ready.gov/

 

 

Without inland marine coverage, your business’s personal property is not covered if it is being transported off site. A business’s personal property can include: machinery, equipment, stock, leased property, furniture, and any other property owned and used by the business.

For example, if you are a contractor and you transport tools and equipment between the workplace and job site, you will need an inland marine policy that covers contractor equipment.  Or, if you are a photographer and shoot on location, the photography equipment will need to be covered on an inland marine form. Basically, if you use equipment that does not stay at your premises, you may need to include it on an inland marine policy.

A business auto policy covers your vehicles, but what about mobile equipment such as a cherry picker, bulldozer, or even a golf cart? If you have mobile equipment that is not subject to compulsory insurance laws and used off public roads, it is not considered an auto. Therefore, you will need to insure that liability under your general liability policy and also insure it on an inland marine policy to cover any physical damage.

How can you determine what to insure?  Keep your agent informed. Let us at R&R know what you need insured and what you use it for. We will make sure that all your property has the appropriate coverage.

For more coverage information, contact a knowledge broker.

 

Every October OSHA releases a preliminary list of most frequently cited safety and health violations for the fiscal year.  From 32,000 workplace inspections, topping the list for 2016 top hazards include lack of adequate fall protection, unsafe scaffolds, hazard communications problems, and lack of machine guarding.

According to OSHA, "one remarkable thing about the list is that it rarely changes.  Year after year our inspectors see thousands of the same on-the-job hazards."

From the OSHA website, consider this list a starting point for workplace safety:

1. Fall protection
2. Hazard communication
3. Scaffolds
4. Respiratory protection
5. Lockout/tagout
6. Powered industrial trucks
7. Ladders
8. Machine guarding
9. Electrical wiring
10. Electrical, general requirements

While the list is not all encompassing, employers are urged to go beyond minimal requirements to create a safe working environment.  A culture of safety has been shown to reduce costs, raise productivity, and improve morale.

Related content:

OSHA Webinar Series
OSHA Inspection Guide
OSHA - New Electronic Recordkeeping Requirements

The Consumer Product Safety Commission (CPSC) estimates there are 5,740 hospital emergency room injuries a year caused by snow blowers. The CPSC reports 19 deaths since 1992 from using snow blowers. Five deaths were caused by carbon monoxide poisoning because someone left the engine running in an enclosed area.

 

The American Society for Surgery of the Hand, reminds us that accidents can happen when using a snow blower.

 

Injury Profile:

• Average age: 44 years
• Sex: Male
• 90% of injuries: dominant hand
• Amputations of tips of fingers
• Middle finger most commonly injured

 

Injury Causes:

• Snow clogging the exit chute of the machine
• Not noticing that the impeller blades are still rotating even though the machine is off
• Operator attempts to clean the clogged exit chute with hands
• Hands connect with the rotating blades, resulting in severe injury snow blowers are safe if used properly

 

If Your Snow Blower Jams:

• Turn it OFF!
• Disengage clutch.
• Wait five seconds after shutting machine off to allow impeller blades to stop rotating.
• ALWAYS use a stick or broom handle to clear impacted snow.
• NEVER put your hand down chute or around blades.
• Keep all shields in place. DO NOT REMOVE the safety devices on the machine.
• Keep hands and feet away from all moving parts.
• Keep a clear head, concentrate
• DO NOT DRINK before using your snow blower!

 

Three Snow Blower Safety Tips:

• Never put your hands inside the snow blower chute for any reason. If the chute becomes clogged with snow (or another object), turn it off, wait for all moving parts to come to a complete stop and then clear the chute with a stick. It may be frigid outside but don't risk not shutting off your machine to clear an object, because once you clear the obstruction, the parts will start to move again!
• Dress properly for the job. Be sure to wear adequate winter clothing and footwear that will improve footing on slippery surfaces. Wear safety glasses, and avoid any loose fitting clothing that could get caught in moving parts. Be careful of long hair. Wear ear plugs or other ear protection - they are loud!
• Remove debris and other obstacles (door mats, toys, decorations) the snow blower might strike or throw, as they may cause injury or damage to the snow blower.

 

Wisconsin residents, contact an R&R knowledgebroker about your current home and auto coverage, or any questions you might have for us at R&R Insurance!

It is every IT manager, CISO, CFO and CEO’s worst nightmare. The FBI has notified you that a cyber attack of unknown origin and scope has been identified as occurring in your network; An employee advises that a mobile device that contains personally identifiable information is missing; a ransomware note suddenly appears on a desktop computer indicating that your system has been encrypted by outside actors demanding payment in bitcoin; an employee was tricked via a phishing email into sending a spreadsheet containing W-2 information on your employees to an outside source.

These are just a few of the real life examples of cyber attacks and data breaches that companies have faced. Experts agree that cyber security will always be defensive in nature and how a company responds to the situation can mean life or death to a business.

How prepared are you to respond ? Do you even know what constitutes a “data breach” and if the situation you are experiencing meets the definition and triggers a response? Under what circumstances are you required to notify individuals, vendors, business associates, and regulators? Do you have contractual relationships that require the other party to be notified and if so, under what circumstances is notification required?

It is crucial for all businesses to have a Breach Response Plan that is well thought out, flexible enough to adapt to various scenarios, and tested. The first step in the plan is the ability to determine if the circumstances trigger your response plan. How do you determine, for example, if the data breach encompasses unauthorized access or unauthorized acquisition of personally identifiable information? Are you familiar with the various laws in the jurisdictions that the affected individuals reside to be able to determine your next steps? Within the United States there are 47 different breach laws. In addition, each country has their own set of laws that must be followed. Regulatory bodies such as HIPAA, FTC, PCI, have different requirements as well. How do you plan on conducting an investigation and who are the participants, internally and externally?

At what point does law enforcement need to be notified? Or should law enforcement be notified? If law enforcement takes control of your system or confiscates your computers, what impact does that have on your operations? But without their assistance how can the attack be stopped?

One thing however is clear, without a plan the response will be PANIC! Decisions will need to be made quickly and under pressure. Similar to the fire drills and tornado drills that we all experienced in school, preparation is key.
The first step is to identify stakeholders. This is not an IT only issue. Develop a CIRT – Computer Incident Response Team. Determine what positions need to be included on the team not the individuals. Before the plan is implemented individuals may have changed or left the company.

Establish a command center/war room where the team can convene. Remember, every minute that it takes to respond costs you money.

What is your communication plan both internally and externally? It is important that your employees be trained that they are not to communication anything that they “think” they know. Until the facts are determined communication channels need to be controlled.

It is likely that an outside forensic IT investigation firm will need to be engaged in order to determine what has happened, how it happened, and what is the status. What firm will you engage and what is the cost?

Do you have legal counsel that is prepared to respond ? Are they experts in this area of the law and familiar with the various statutory and jurisdictional requirements? What is the scope of your engagement with the firm and their fee? Will they be in a position to be your liaison with law enforcement and regulators? Will these attorneys be able to prepare notification letters?

Included with notification are the costs of paper, postage, call center, website management, etc. Are you prepared to make these arrangements and absorb these expenses?

When it comes to communication, maintaining your reputation with your customers, vendors, employees and the public will be crucial. Will you be engaging with a Public relations firm to manage these communications? How will the media be managed when reporters request information?

How will the communication with regulators be handled. Various bodies have the authority to fine and penalize a business.

Do you have experience in negotiating with cyber extortionists? Will you be in a position to decide to pay or not pay a ransom demand? How familiar are you with bitcoin?

According to a recent survey by 451 Research, 30% of businesses indicated that they have a breach response plan and only 25% have cyber insurance. However, various studies indicate that the cost of a data breach ranges from $160 to $360 per record, depending on the industry and specifics of the breach.

Cyber insurance can play an important role in this entire process. I say CAN because the scope of coverage, risk management services, and breach response vary greatly and significantly among the 60+ carriers that offer “cyber” insurance. The insurance is not an alternative to having a robust response plan but can complement and provide outside resources and vendor relationships. It is important to choose an insurance partner that can help you not only identify your risks and exposures, will provide you with a vital partnership in assessing and responding to situations as they arise.

 

 

What happens to your business in the aftermath of a disaster? That depends, in part, of the definition of disaster.

Most businesses are familiar with Business Interruption/Income Insurance. The first Business Interruption policy was issued by London Underwriters in 1939 and is designed to put the insured company back into the same financial position that which it would have enjoyed had the disaster not occurred. However, according to the American Insurance Association , the coverage is only triggered in three limited circumstances:

• There is physical damage to the premises of such magnitude that the business must suspend its operations
• There is physical damage to other property caused by a loss that would be covered under the company’s insurance policy, and that damage totally or partially prevents customers or employees from gaining access to the business
• The government shuts down an area due to property damage caused by a peril covered by the company’s insurance policy that prevents customers or employees from gaining access to the premises

So what happens in the event of a cyber attack? Unfortunately, a Network attack is not considered a disaster and is not covered by the standard Business Interruption/Income insurance policy.
What constitutes a network attack? Consider the following:

• The intentional and unauthorized gaining of access to or use of the insured’s network (computer hardware, software, firmware, electronic data stored on or within the network, connected by two or more computers including networks accessible through the internet, intranet, extranets, virtual private networks)
• Receipt of targeted malicious code from an external source
• A targeted denial of service attack

According to a report recently released by EMC Corporation for its Global Data Protection Index 2016, the average cost of a data loss and disruption is $913,958 per organization. In addition, the average costs of unplanned system downtime is $550,000 and the average length of downtime is 22 hours. Over 70% of study participants responded that they did not think that their organization would be able to fully recover their system or data.

How do you recoup data forensic expenses, costs to restore or replace digital assets, extra expenses, and the reduction in business income? Fortunately, insurance coverage can be obtained through a Cyber Insurance Policy. Unfortunately, coverage is not offered by all carriers, is frequently overlooked and not understood. This creates a significant risk to any business operations.

References:
American Insurance Association
EMC Corporation, Global Protection Index 2016
Allied World Insurance policy forms SRVS2 00002 and SRVS2 00052 00

Coinsurance is the percentage of property value that the policyholder is required to insure.

If one insures the property for less than that amount, the insurance company imposes a "coinsurance penalty" once a claim is filed.  The value is determined at the time of the loss. If the amount of insurance is found to be under the stated coinsurance percentage, then a penalty is applied reducing the claim payment.

Most business policies include a "coinsurance" clause, determining what percentage of its value the property must be insured for in order to be fully reimbursed for a loss.

Example: There is a building that one believes would cost $100,000 to replace and a coinsurance penalty in the policy of 80 percent. One insures the building for $80,000 thinking they have fulfilled the coinsurance clause. A fire loss causes $60,000 worth of damage so a claim is submitted. The insurance company subsequently determines that the replacement cost of the building is actually $150,000.

To determine how much to pay on the claim, the insurer divides the amount of insurance purchased ($80,000) by the amount that should have been purchased (80% of $150,000 or $120,000). The result (two-thirds, or $40,000) is the amount of the claim the insurer will pay.

If the building had been insured for at least $120,000, the insurer would have been reimbursed for the full amount of the loss.

 

Coinsurance can be tricky and could end up having a high cost if one under insures the property.

Reach out to one of R&R's Knowledge Brokers to ensure that you have the proper amount of coverage and to clarify any questions you may have on coinsurance.

 

 

Waukesha, WI – R&R Insurance Services, Inc. welcomes Steve King as Risk Management Consultant.

Steve has more than 30 years of experience in the insurance industry, including strategic planning, territorial management, underwriting and risk management. His greatest satisfaction is solving problems for clients. As a member of R&R’s Professional Service Division, Steve will be developing and implementing quantifiable risk service plans, and providing risk management stewardship and client advocacy with carriers.

 “Steve is incredibly passionate and brings a great deal of knowledge to R&R,” states Ken Riesch, President of R&R Insurance Services. “We look forward to adding his experience to our Professional Service team and are excited about the continued growth of R&R.”

Click to learn more about Steve.

R&R Insurance Services, Inc. has served the insurance needs of southeastern Wisconsin since 1975. Today, R&R is Wisconsin’s largest singly owned independent insurance agency offering businesses and individuals a full range of insurance products including property casualty, employee benefits, workers compensation, liability, life, dental and home/auto. R&R is also a shareholder with Assurex Global, a worldwide network of leading independent insurance agencies.

Bob is the owner of Giovin, Inc. He owns a car that is titled in his name only.  He also uses the car primarily for the business of Giovin, Inc.  Because of that, Bob had his insurance agent add the car to Giovin Inc.’s commercial automobile policy.  Bob even has a lease with Giovin that pays Bob for the use of that car.  This seems like a great deal for Bob, and in the real world, this scenario happens fairly often.

However, there is a serious coverage problem with this arrangement.  Bob may not be covered personally if there is an accident.  Here is an example of what might happen:   

Let’s say Bob is driving the car on business for Giovin Inc., when he rear ends another car, injuring the occupants.  The occupants file a lawsuit against both Bob, personally, and Giovin, Inc.

This is when Bob gets a nasty surprise.  A standard commercial automobile policy does not cover and defend Bob in this situation.  He will have to pay for his own defense in this lawsuit.  If there is a judgment or settlement, he will likely have to pay that personally as well.

This outcome could have been avoided if Bob had told Giovin’s insurance agent that he was the owner of the vehicle, not Giovin, Inc.    

This situation can be handled to make sure that Bob is covered under the policy.  There are different ways of doing that, and the first step is making your agent aware of who actually owns what vehicle.  To be sure, the insurance carrier’s underwriters will have some questions that will need to be answered.  

A good rule of thumb when it comes to commercial automobile policies:  If a vehicle is titled to someone other than the business named in the policy, you need to check with your agent to make sure that the actual owner is covered in case of an accident.      

Contact a Knowledge Broker at R&R Insurance for additional information.