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Wednesday, December 7, 2011

Putting out the Fires of Risk

I recently read an article in Fortune that hit a nerve that's been exposed for a while.  The article can be found here http://management.fortune.cnn.com/2011/11/23/board-directors-risk-management/.  It discussed how recent surveys are pointing to the fact that most managers of the companies that supply us with things we need and our leaders as well do not monitor the risk management process or do so on an ad hoc basis.  Which is to say, they simply check a box, and the job's done. 

Historically, companies of all sizes, whether they know it or not, categorize risk into four groups: strategic, operational, financial, and compliance risks.  Each group identifies a key exposure to loss to any company.  Well, the time for just ticking off tasks is gone.  There are so many more unseen risks that can have a negative impact on a company's bottom and top line.  Brown's Insurance plays a unique role in the risk management process.  We provide risk transfer solutions and we are very good at what we do.  Call us so we see if your risks are covered properly.

Friday, November 11, 2011

Insurance Fraud

Insurance fraud makes victims out of insurance companies and their customers. In common terms, insurance fraud is lying to or deceiving an insurer in order to make money or to become insured. Some common fraud schemes include:
  • "padding" (inflating the true amount of) a claim
  • lying or hiding (concealing) important information when applying for insurance
  • lying or hiding (concealing) important information when reporting a loss
  • submitting false claims
  • "staging" accidents
  • Failing to report recovered property
  • faking theft claims
  • committing (home or vehicular) arson for profit
As a consumer, fraud should concern you since the cost is passed directly on to you in the form of higher insurance rates. You can play an important role in reducing fraud.

Fighting Auto Insurance Fraud
Persons attempting to commit insurance fraud often do so by deceiving innocent drivers during actual accidents or by involving innocent drivers in "staged" accidents. Do the following in order to minimize this risk:
  • Drive defensively, keeping space between you and surrounding cars.
  • When traffic slows, begin braking before the car in front of you does.
  • Be careful when turning into a lane that allows two or more autos to turn left at the same time. Victims of insurance fraud are often people who float across the line when turning and then are intentionally sideswiped by a person who is "staging" an accident.
  • If you are in an accident, write down license numbers of all cars involved in the accident, get the names and contact information of all persons involved and their insurers. Count the number of passengers in the other cars and get their names, addresses and any other pertinent information.
  • Call the police and get a police report even if the damage is minimal. DO NOT let another driver talk you out of calling the police.
  • Carry a disposable camera in your glove compartment or make use of a cell phones camera feature and take pictures of the damage to the vehicles and of all drivers and passengers in the cars.
Fighting Homeowners Insurance Fraud
It is far more difficult to involve an innocent party in homeowner fraud. However, a homeowner can help himself and help deter fraudulent claims by properly maintaining their home, and by removing or repairing items that could create tripping hazards to outside parties. Also, if someone is injured in your home, be certain that you get full information and be sure that an injured person gets any needed treatment. Carefully document any incident, including all impressions about likely injury. It may also be prudent to show healthy skepticism over any information on medical bills or claims.

Report suspicious actions such as a friend who asks you to store valuable property and you then find that they reported to his insurer that the property was stolen.

Think of insurance fraud as money out of your pocket-because it is. According to the US Chamber of Commerce, fraud adds 25% to property and casualty insurance rates.

If you are involved in an accident and you are suspicious that fraud may be involved, report it to the authorities and your insurer. Another helpful source for fraud information is the National Insurance Crime Bureau at 1-800-TEL-NICB (at the time of this writing, their Website was located at http://www.nicb.org/).

Call Brown's Insurance Agency 877-835-1948 to save time and money on your Home, Auto and other insurance!

Monday, January 31, 2011

Do Directors and Officer Liability Policies - a brief review

Even if you're not a publicly traded company, you can still have a board of directors. Most if not all non-profits, small to large, have a board of directors. A company's board provides the company with direction, advice, and overall inspiration. It is generally the responsibility of the Board to ensure that the company fulfills its mission statement and vision. In order to do this, the Board must institute certain business policies and practices. For this reason, a good Board will include seasoned professionals and executives with broad business acumen. Not some shmuck of the street.

Generally, members of the Board are compensated for their position, and they can be held fiscally responsible for the performance of the company. Because of this responsibility, It is not uncommon for specific Board members, or the Board in its entirety, to be sued for allowing the company to drift into bankruptcy or for acts of negligence. Generally, Boards have liability in the following areas:

Duty of Care:
Members owe a duty of care to the sharedholders to act in their best interest.

Duty of Loyalty:
Members have a duty to avoid actual or apparent conflicts of interest with other entities

Personal/Company Assetts:
Members owe a duty to the shareholders to avoid the intermingling of company and personal assetts

A breach of these duties and the board and/or specific members could find themselves slapped with a lawsuit. To protect itself from these damages, the Board can purchase Directors and Officers Liability Insurance ( D&O ).

So what does this policy cover?
Usually there are three kinds of coverage types in a D&O policy, A-side, B-side, and C-side. Why can't they just make one policy to cover one thing you ask? Well because insurance people, like attorneys, get pleasure out of the contorted looks on their confused customers' faces while they spew technical jargon.

Without getting too technical, these policies cover claims against the board and its directors. They also provide coverage to reimburse the company if it has an agreement with board members to indemnify them for damages the members incur.

Check out some of the cases in which Boards have been held liable.

D&O: The Crisis Cometh

Thursday, January 20, 2011

Eleven Workers' Compensation Issues Sure to Impact 2011 | PropertyCasualty360

Here is an excellent article that demonstrates the impact that the economic changes we are experiencing has on the cost of insurance for your business...especially Workers Compensation.  This should help you business owners prepare for and reduce back-end employee related costs.  It's one thing for your insurance premiums to increase, but it's another thing to let these trends go uncontrolled.  As a response to this, Brown's has partnered with East Coast Risk Management to begin offering a program that will assist employers in controlling excessive employee related costs. This could include, claims management, Federal regulation compliance, safety plans, and many other service offered under this program. 

Check out the article published by National Underwriter to see what issues could be affecting your bottom line and how you can prepare for this.

Eleven Workers' Compensation Issues Sure to Impact 2011 PropertyCasualty360

Thursday, January 6, 2011

House Fires and other Wintertime Woes

As a continuance to our post on ice dams, I'd like to talk about another monster that seems to happen a lot in the cold months that we all should try and avoid.  The House Fire and Carbon Monoxide poisoning!  If we have a winter like we had last year in most parts of the US, no recession can keep people from inching up that thermostat a little.  When it gets cold, we all turn to drastic measures to keep warm.  Some of us even use alternative heating sources, like a fireplace or space heaters.  It's important that we understand how to keep from overdoing it and risking your home going up in flames and/or you getting Carbon Monoxide poisoning.

Not only is December through February peak time for house fires, but they are also peak time for carbon monoxide poisonings.  While some accidents are caused by other reasons, most incidents occur due to improperly ventilated or malfunctioning heating sources.  Now if you have Homeowners Insurance your policy should cover you for a complete loss by fire.  And if you have Life Insurance, you have coverage if you die from carbon monoxide poisoning.  But you don't want to lose your home you have created, and you most certainly don't want to die! Here are some things you can do to better protect yourself.

  • Do not use your oven to heat your home.  To may, this seems obvious.  But it can be tempting if your wife is cheap and keeps the thermostat at 65.
  • Do not use your grill inside.  Again, obvious.  See a pattern here.  But, I've seen guys bring it indoors to grill steaks for the Super Bowl party...don't do it.  Your house will smell like lighter fluid and burnt meat...and also your wife may leave you.
  • If you have a masonry or wood fireplace, get it inspected annually by a professional to keep it clear of debris like leaves and animals.  Not only are you risking your home...but there are other ways to smoke a bird even if you're desperate.
  • However cold it is outside, DO NOT warm your car up in the garage...open or closed.  Start your car, back it out, and let it sit. 
  • If you own an older home, and it has aaluminum wiring throughout, get it replace with Copper or better quality.  Aluminum is definitely a safety hazard and most insurance companies won't insure you if you have it
  • If you use a space heater, make sure it is in good working condition and has an automatic cut-off and guarding around the heating coils.  Also keep these heaters at least 4 feet away from anything loose that is flammable.  Don't forget to turn these off when you go to bed and keep children and pets away...especially pets...nevermind the children.
  • I don't care if you think there are no embers or coals still live.  Never ever use gasoline, charcoal lighter or other fuel to relight (or initially light for that matter) a fire because the vapors could explode.  And you don't want a mini mushroom cloud going up in your neighborhood.
Again, I know most of us already know a lot of this.  But there's no shame in revisiting some of the basics.  Hey, let's face it, we don't always do what we know is right.  Simple rule, if it seems remotely dangerous and it involves fire, play it safe.  The payoff is definitely not worth the risk.  And if you really get desperate, just go buy a Snuggie.

Monday, January 3, 2011

Getting Married in 2011? Look over your insurance!

This week is the biggest week for new wedding engagements.  If you are one those New Year's lovebirds.  Here are some things you might want to consider.

Car Insurance:
Auto Insurance rates typically drop for men under age 25 when they marry.  Either let your agent know what is going on with you or contact a broker...like me who can get you quotes from multiple insurance companies and let you pick the cheapest one.  Also, you most likely will be able to both save money and simplify if you can consolidate all insurance policies in the household.  In addition, some discounts most companies give for couples are

  • Multicar Discount - multiple vehicles on one policy
  • Multiline Discount - for having other insurance with the same company (like Homeowners, Life Insurance, and Umbrella)
Life Insurance:
No matter who the breadwinner is, if one person in the couple kicks the bucket prematurely, there WILL be a financial burden placed on the survivor.  Early in marriage, you may not be able to purchase all the life insurance you need.  Instead, buy what you can...buy something.  You don't want to leave your spouse with nothing, and for younger individuals, life insurance rates are ultra low.  Use a Life Insurance Calculator to find what you need...you'll be surprised!

Health Insurance:
Look at your health insurance plans.  You're going to have to decide if it's better to keep individual plans, or make a change. For example, if both of you work, then find out which employer-sponsored plan is cheaper.  In many cases, coverage will be better, and at a lower cost to you, on employer-sponsored plans.  You'll need to consider long-term plans as well as your immediate needs, if you're planning on starting a family. If you're a student, there are often plans available through your school.

Homeowners Insurance:
If you've just moved in together, or bought a new house, you'll soon find out that you have a lot more stuff than before.  Plus add in all those blenders you got for wedding gifts and its doubled. Make sure that you have an adequate limit of insurance for your personal property, or contents under your homeowners policy.  If you find you need additional insurance, it can be added quickly and at little cost.  Homeowners and Renters for that matter, do protect against a lot and most of your belongings would be covered.  However, these policies don't always cover jewelry, antiques, or other valuables.  Do you have that rock insured adequately?  In most cases, the company that provides your homeowners can provide coverage for jewelry as well, but they will need a certified appraisal of the ring and other items.  A quick note on this...when discussing jewelry and other valuables, make sure that you ask whether the coverage is for "actual cash value (ACV)" or "replacement cost".  Replacement Cost is typically more expensive but it covers more.  ACV factors in depreciation to the valuables so you'll only be paid what the item was worth at the time of loss, and NOT what you actually paid for it.

Marriage is a beautiful thing...I recommend it to all.  But with love comes lots and lots of paperwork and responsibility to protect both your loved ones and your assets.


Thursday, December 30, 2010

The iceman cometh...protect your home from ice and water damage

So last winter we had some pretty nasty weather on the East Coast.  This year it looks like, at least in many parts of the country, we're having a repeat of nasty weather and low temps.  What does water do when it gets cold class???  That's right makes ice and wreaks havoc on your house.  One specific monstrosity is what we want to discuss here...ice dams.  What's an ice dam?
That's an ice dam.  It's exactly how it sounds, ice forms in your gutters and snow compacts on top.  Trapped warmer air in your attic melts the snow, and the ice acts as a barrier or dam.  Since the water has no where else to go, it runs back under the shingles and into your walls...where it stays...like this

Result...yucky moldy drywall and rotten wood if left untreated.  If you have a Homeowners insurance policy, check with your agent to make sure you have coverage (most policies do afford coverage).  But nobody really wants to make a claim against their insurance, since you'll at least have to pay your deductible out of pocket, and also since this is a very preventable problem.

So how what is an affordable way to destroy the iceman.  Well...time to take your pantyhose off...literally.  You can make what is called an ice melt sock, or ice melt nylon in this case.  Fill a pair of nylons with environmentally friendly rock salt (calcium or magnesium carbonate) and lay the nylons purpendicular (that's the opposite of paralell ya'll) to the ice dam.  The rock salt will melt the ice and create channel of free flowing water that won't backup into your house.  On behalf of our company, I don't recommend doing this yourself, especially if you have a multi-story home.  It is a risky and dangerous operation.  That's what your in-laws are for.  Seriously...consider hiring a pro to do it.
Here's a video on how to do it yourself. 




So there you go.  Remember, if you start seeing icicles in your gutters that look like they've come straight out of a Clive Barker horror film, you probably have an ice dam.  Save yourself the hassle and headache of having your home gutted out from mold damage and melt that ice!