R&R Insurance Blog

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.

In the marketplace, drones are on the rise as a commercially used technology. When looking to insure them, there are questions that need to be answered when discussing coverage options.

1. Are all drones registered with the FAA?
2. Are all operators certified to fly drones?
3. Can the operator provide evidence of his/her certification?
4. How will the drone be used?
5. Where will it take off, land, and what is the flight path?
6. Will flights take place around the public?
7. Will the unnamed aerial vehicle remain within its operator’s line of sight?
8. How high and how fast will it fly? (Right now drones are limited to an altitude of 400 feet and a speed of 100 mph)
9. Is there a maintained log kept to show all flight activity?
10. Will the drone collect data; including pictures, video, or sound?
11. How will the data be used?
12. What are the possibilities for unintended eavesdropping?
13. Has the drone owner or operator had any drone related incidents that could lead to a claim?

These questions are based on an article found in Best’s Review, April 2016, article, Flight Risk, by Angela Adams.

For further information about drones and their rules and regulations, hazards, and coverage under commercial insurance, check out this article from the R&R blog.

There may be a silver lining to the economic crisis that Americans have lived through over the past few years:  We have become accustomed to spending less and saving more.  Even as the economy rebounds, many people continue to look for ways to keep their household budgets in check.   Luckily, spending less doesn’t have to mean doing with less, especially when it comes to life insurance coverage.  There are ways you can maintain your coverage, but pay less for it.

“Life insurance is a financial safety net for your loved ones, so it’s critical to maintain that coverage especially with the uncertainty that remains in the economy,” says Tom Driscoll with R&R Insurance.  “But keeping that coverage doesn’t have to be a financial burden.  There are ways to save money on your existing coverage, and I’ve got some tips to help you do just that.”

September is Life Insurance Awareness Month, the perfect time to review your life insurance needs with an insurance professional.  If you already have coverage, you may be able to cut costs based on the following says Driscoll:

1. You’re healthier.  If you have quit smoking, lost a substantial amount of weight or made significant improvements to your health, let your insurance company know.  You may be able to qualify for a lower rate on your coverage.
2. Rates are near historic lows.  Life insurance rates remain near historic lows.  In fact, the cost of basic term life insurance has fallen by nearly 50 percent over the past decade.  So, if your family’s budget is tight and your health status hasn’t changed much since the last time you purchased coverage, you may want to apply for a new policy.  If you do, make sure not to drop your current coverage until the new policy is in force.
3. Circumstances have changed.  It is smart to review your policy every year to make sure it’s adequate and up to date.  If the kids are out of the house, your mortgage is paid down, you’ve gotten divorced or family members no longer need your  financial support, your need for life insurance coverage may have decreased.  A smaller face amount policy will likely save you money.

“If people depend on you financially, life insurance is an absolute must,” says Driscoll.  “But no one should pay more than they have to.”

Interested in a free review of your current life insurance policy?  Contact us.

About Life Insurance Awareness Month

Held each September, Life Insurance Awareness Month is an industry-wide effort that is coordinated by the nonprofit LIFE Foundation.  The campaign was created in response to growing concern about the large number of Americans who lack adequate life Insurance protection.  Roughly 70 million adult Americans have no life insurance, and most of those who do have far less coverage than more financial experts recommend.  For more information on life insurance, visit LIFE’s website at www.lifehappens.org.

Many high net worth business owners are going to be impacted by the Federal Estate Tax – a rate that is higher than the highest Income Tax Rate. It’s a 40% tax on any assets exceeding the Unified Credit level. The IRS has two “Trump Cards” to play that can push you into that tax bracket.

Personal or corporate-owned life insurance can unintentionally bump the values of their estates at the worst possible time – death. The second and potentially even more damaging trigger is pegging the value of their business. They may be operating with the notion that Book Value will be the accepted method used by the IRS. It typically is not. Some combination of Book Value and Capitalization of Earnings is a far more likely method.

Imagine what would happen if your business suddenly had to continue without you, a partner or key employee. The death, disability or retirement of a key executive causes a number of problems which can be addressed with proper planning.

Through R&R, you can make sure that you are covered in case the unexpected happens. Please contact Tom or Pat Driscoll to get more information on R&R's business valuation services and more.  

More than ever in this day in age, we hear about major retailers having a breach of customers' personal information. By the time you realize one happened to your business, its often too late. Therefore, it is best to be aware and protected just in case. Do you know if your business covered for a Data Compromise?

What is a Data Compromise?

• A breach of a company’s network, in which customer information is stored, processed,  transmitted, etc. 

What do I need to do to make sure my business is covered?

• Be sure to talk to your insurance agent about Data Breach Coverage today! When purchasing Data Breach Coverage you will want to make sure Response Expense AND Defense & Liability Coverage is included.

Response Expense can help provide service to help your business comply with state laws requiring notification, credit monitoring, and identity restoration.  Some items you want to confirm are included in your insurance provider’s response expense are as follows:         

• Provides coverage for notification to customers who may have been affected by a data breach
• Provides 12 months of credit monitoring after data breach
• Forensic IT Review coverage to cover costs associated with hiring a third party computer expert to help determine the extent and origin of the data breach
• Legal review to pay for costs of professional advise
• Public relations coverage to pay services needed to retain goodwill with your customers

Defense and Liability Coverage will cover defense and settlement costs in the event a customer/s bring suit against your company.

 

If you have any questions about your current coverage or want to learn more about setting up a policy, contact a Knowledge Broker.

Updated June 29, 2017: OSHA Delays Electronic Recordkeeping Deadline to December 1, 2017

 

Mandatory reporting of OSHA is just around the corner! Be sure you are completing your OSHA 300 log accurately because you will very likely be sending the information to OSHA in 2017.

OSHA has updated the rules that pertain to the reporting of workplace injuries and illnesses. The new rule requires certain employers to electronically submit injury and illness data beginning in 2017. The goal is to encourage employers to better identify hazards, address safety issues, and prevent future injuries and illnesses.

New Requirements:

• Employers with 20-249 employees in high-hazard industries must electronically submit their OSHA 300A form for the year 2016. – Effective December 1, 2017 (originally July 1, 2017)

• These same employers must electronically submit their OSHA 300A information for 2017 by July 1, 2018. Beginning in 2019, these employers must submit their OSHA 300A information (for 2018) by March 2, 2019.
• These same employers must electronically submit their OSHA 300A, OSHA 300 and 301 forms. – Effective July 1, 2018.
• Beginning in 2019, these employers must submit OSHA information (for 2018) by March 2, 2019.

• Employers with 250 or more employees in industries covered by the record-keeping regulation must electronically submit their OSHA 300A form for the year 2016. – Effective December 1, 2017 (originally July 1, 2017)

 

Submission Year	Establishments with 250 or More Employees	Establishments with 20-249 Employees	Submission Deadline
2016	Form 300A	Form 300A	December 1, 2017
2017	Forms 300A, 300, 301	Form 300A	July 1, 2018
2018	Forms 300A, 300, 301	Form 300A	March 2, 2019

 

In addition to these upcoming requirements, the information submitted will also be posted publically on the OSHA website. For more information about the new OSHA recordkeeping requirements, contact a Knowledge Broker or register for our upcoming webinar.

In July 2016, the new Work Comp rates for policies, effective October 1st, 2016, were released.  Generally speaking, the rates went down by an average of 3.19%, which is great news.

What is catching companies by surprise is the WCRB also increased the Split Point for the 4th year in a row.  The new Split Point is going to be $16,000.

This is causing most Experience Modification Factors (EMR) to increase by 2 to 5 points before any other factors are input, i.e.: Payrolls and Losses.

Do you know what your projected EMR will be for your next renewal?
Do you know what the Spilt Point means and how if affects your EMR?

Please reach out if you would like to learn more about your EMR and how R&R's Professional Services manage this for customers.

The WEA trust is bringing a proven, best-in-class wellness solution to municipalities through their League Health Plan with Vitality.  Vitality is an interactive rewards based wellness program that engages its members through education and coaching to improve their health and lives.  It helps members realize how lifestyle choices impact health, and how activity and exercise can enhance their lives. 

A well implemented wellness plan can drive a handful of improvements for you as the employer as well.  A more active and healthy workforce improves productivity and lowers risk factors that drive your health claims.  Additionally, creating a wellness program provides opportunities for leadership among your employees who participate on a wellness committee, and can help brand your organization and make you an employer of choice in your community. 

Here are some of the key elements of the Vitality Wellness program through WEA and the League Health Plan:

• Biometric Screenings – Your employees will ‘know their numbers’ for blood pressure, blood sugar, cholesterol, triglycerides etc.
• Vitality Health Review – This is a health risk assessment that helps bring lifestyle into the mix of your biometrics results and paints a picture of overall health.
• Vitality Bucks – Employees earn points for the Biometric Screening, the Health Review, and also for tracking activities through a phone, smart watch or pedometer. Earning bucks allows you to buy rewards like movie passes, make charitable donations, gift cards.  Points do not expire!
• Goal Setting – Vitality will set goals for activities like steps per day, workouts per week and provides motivation to improve results of the health screening. These goals are attached to bucks, so the more you participate the more you can gifts you can purchase.
• Coaching – Vitality provides health content, articles and provides goals for improving the health of your whole organization

There are two levels of the program available.  Activate is the base level, and Elevate is a ‘buy up’ option that includes more involvement with spouses, higher levels of engagement with the program and some additional resources to help you build your wellness platform. 

If you have any questions or would like to discuss how this wellness plan can be implemented into your organization, contact me.  We have our own Certified Wellness Specialist on staff, and I would be happy to help you improve the lives and health of your employees!