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Homeowners Insurance & Social Gatherings

Many homeowners enjoy throwing parties for holidays or special events. If a party is in the near future, be sure that individual homeowners insurance coverage is adequate. Guests who are injured may need to file an injury claim  if they fall down or if a pet bites them.

Research shows that about 75 percent of adult homeowners who plan social gatherings in their homes do not have a personal umbrella insurance policy. This makes them more vulnerable to lawsuits stemming from guests who suffer injuries. The same research study showed that the remainder of the homeowners surveyed did not know what type of insurance coverage they had. This means it is likely that the percentage of homeowners who do not have adequate insurance coverage is more than 75 percent. However, they should have this extra coverage to protect themselves from lawsuits. Although dog bites and falls are common, alcohol is one liability issue that is often overlooked but is very risky.

Alcoholic drinks are viewed as a way to relax and enjoy socializing. However, there is one sobering fact that many homeowners who plan to serve these drinks should know. In 30 states, homeowners may be responsible for damages arising from any auto accidents caused by their intoxicated guests who choose to drive home. In a research survey, more than 50 percent of homeowners said they agreed that party hosts should be responsible for their guests’ safety. However, very few took any steps to obtain adequate insurance coverage. The research study concluded that most people avoid purchasing a personal umbrella insurance policy because they are under the impression that their regular homeowners insurance coverage provides adequate protection for such matters. Since many lawsuits include large awards and medical costs, it is easy for one incident to exceed the homeowners insurance liability limits.

Homeowners must take two steps to ensure they are protected. First, it is imperative for them to contact a Trusted Choice ® Insurance Agency to discuss umbrella insurance policy options. It is also important to take the agent’s advice to avoid facing a costly lawsuit. The second step homeowners must take is to read the following suggestions, which are designed to reduce their risk of lawsuits from intoxicated party guests:

• Ensure that there are filling food options and non-alcoholic beverage choices available.
• To avoid trouble from party-crashing strangers, limit invitations to friends or familiar people.
• For guests who appear drunk, provide transportation or overnight accommodations.
• Avoid serving alcohol to guests who appear intoxicated.
• Plan activities that draw attention away from drinking alcohol.
• If several guests are expected at a home party, consider hiring an off-duty police officer to handle problems and discreetly monitor guests’ alcohol consumption.
• Take away all alcoholic drinks at least one hour before the part is supposed to end.

Taking these small steps could save you from facing huge problems.  After all, you want your holiday gathering to be remembered for the fun and the social interaction, and not remembered for a bad incident that resulted in injury or death.

 

Stay Safe in your SUV

Considering the increase in fuel costs and environmental awareness, it is surprising that the most popular vehicle in America is still the sport utility vehicle. With a higher rollover occurrence, higher center of gravity, and increased difficulty of handling, driving a SUV can be dangerous.

SUV’s are completely different from lower-bodied sedans. They are much heavier and therefore, they need much more braking distance between themselves and the car in front of them. They also are much more prone to slip, skid, or flip in hazardous road conditions; according to research done by the National Highway Traffic Safety Administration, more than 10,000 people each year die in SUV rollovers..

The statistics also show that most passenger care have about a 10% chance of rollover if involved in a single car accident, while SUV’s have between 14% and 23% chance of rollover in the same scenario.

By following these basic tips, you will be better informed of how to safely maneuver in a SUV.

• Slow down. Driving too fast is dangerous; driving too fast in an SUV is even more so.  The longer you have to react, the less likely you are to cause or be involved in an accident.
• Avoid sudden or sharp steering.  An SUV is not designed to make fast, sharp turns as a smaller, lower, car can.  Allowing yourself more time to react will allow you to make smoother steering transitions.
• Learn to brake in an SUV. While driving your vehicle, you should be considerate of those around you.  Those behind and beside you will not be able to see around you, so the more warning you can give before you brake, the better.
• Check blind spots frequently.  The biggest mistake most SUV drivers make is feeling invincible.  You are in the largest car, but that doesn’t mean you are in the safest.  Many SUV drivers do not use turn signals, or check blind spots, before pulling out or changing lanes, making a collision with a smaller vehicle all the more likely.
• Avoid overloads. Carrying a great deal of cargo (especially on roof racks), or even passengers, can throw off the center of gravity even further, making the car more likely to flip over. This also wears on tires and brakes, overheats tires, and can result in a blowout.

 

Simple Tips to Prevent Auto Theft

Imagine finishing up a nice dinner at one of your favorite restaurants.  And as you are walking through the parking lot, getting closer to the spot in which you parked your car, you start to get that sick feeling in your stomach when you start realizing that your car is not where you parked it.  What could you have done to deter the auto thieves?

Auto Theft is not an uncommon event in the United States.

About every 44 seconds, a vehicle is stolen in the United States.  That means over  750,000 vehicle owners each year find themselves victims of auto theft.  In the event your car is stolen, contact the police with the following information immediately: make, model, year, color, license plate number, VIN, approximate time of theft, location, and witnesses, if any. You should know this information, or have it available at all times. If you have a smart phone, that is a great place to easily store your vehicle and insurance information.

Then, contact your auto insurance company or local insurance agent to report the claim.  Your representative will be able to help you get through this time of crisis. The will explain your car insurance coverage and guide you through the steps needed to handle your claim.

According to the National Highway Traffic Safety Administration (NHTSA)  40% to 50% of all auto thefts are a result of driver errors. Some other interesting statistics are:

• The top two months for vehicle theft are July and August
• Only 54% of stolen vehicles are recovered
• Using the 2010 statistics, the #1 stolen vehicle was the Dodge Charger
• The annual value of stolen vehicles is in excess of $4.3 BILLION
• Maryland ranks #9 for the top states where cars are stolen (with California ranking #1)

A few simple preventative measures, however, could deter auto thieves and prevent this tragedy from ever happening.

Here are some tips to consider to deter auto thieves:

• Install an anti-theft device.
• Never leave the keys in the vehicle, or the vehicle running, while unattended.
• Keep doors locked at all times, and windows up.
• Never store valuables or packages in plain sight, which will make your vehicle a more attractive target for would a would be auto thief.
• When parking on the street, turn your wheels, use your emergency brake, and park between other cars (making it harder for a thief to tow).
• Avoid parking in long-term lots if at all possible.
• Park in a safe, well-lit, or well-traveled area at night.

 

Will your Smoke Detector help you when you need it?

In early 2006, a federal jury ruled that the design of ionization smoke alarms was defective in a fire that trapped 56-year-old William Hackert Jr. and his 31-year-old daughter Christine in their house near Albany in 2001. However, even before this ruling, safety experts were already questioning whether this type of smoke alarm is adequate to deal with the threat of fast-burning synthetic materials prevalent in American homes.

Ionization alarms, which use radioactive material to detect smoke, react earlier in fast-burning flaming fires. Photoelectric alarms, which detect changes in light patterns, react earlier in slow smoky fires. Experts agree that both types save lives. However, a problem arises because the time needed to escape has shortened significantly because of fast-burning synthetics used in furniture and carpets. Smoke alarm use standards may need to change to accommodate this phenomenon.

In 2001, Consumer Reports recommended that homeowners install at least one of each type of alarm on every level of a house to provide sufficient warning time for different types of fires. A recent report from the Public/Private Fire Safety Council noted that some test escape times were “tight or insufficient” with either alarm for bedroom or living room flaming fires. The group suggested that Underwriters Laboratories (UL) modify its standard to require faster detection of smoldering fires. Current UL smoke alarm standards require alarms to respond within 4 minutes of a flaming fire and in a smoldering fire before smoke obscures visibility by more than 10 percent per foot.

In today’s homes, the synthetics in furnishings, fabrics and carpeting smolder longer, but burn faster than natural materials like wood and cotton, which char as they burn. Synthetics melt and pool which produces significantly more energy when they burn. This has shortened the time between first flames and combustion of an entire room due to accumulated heat and gases to approximately 2 to 4 minutes. The average time between first flames and complete combustion 30 years ago when the UL standard was developed was 12 to 14 minutes.

In February of 2006, UL began studying the smoke characteristics from 40 materials commonly found in homes in the effort to make alarms more effective. Also under study are the byproducts of today’s smoke, which can be lethal. Results of these studies are expected by the end of the year.

Another reason for UL concern is the increase in U.S. fire fatalities in the past 12 months to a rate of about 3,500 annually. One likely factor is the increasing use of candles as mood lighting. Candles now cause about 18,000 fires a year, triple the number five years ago.

 

The proper Contractors Insurance can help save your Construction Business.

Construction can be dangerous work. The majority of injuries to workers and members of the public are relatively minor; the injured persons fully recover in short order. However, catastrophic injuries, while rare, can devastate a person’s life, cost enormous amounts of money, attract unwanted media attention, and harm a contractor’s reputation and business.

There is no single definition of catastrophic injury. Organizations may define it in dollar terms, such as an injury that incurs liability of $250,000 or more. Others may define it in terms of the injury’s severity – a broken arm might not be considered catastrophic, but a crushed or severed arm might be. Still others may define it in terms of a change in an individual’s earning capacity – an injury that prevents a person from working or reduces his wages for less than a year might not be considered catastrophic, but one that permanently reduces or eliminates earning capacity might be.

Whatever the definition, there are some things a contractor can do to effectively manage a claim. A few steps the contractor can take before an injury occurs may pay dividends later:

• Plan ahead. Most construction businesses are too small to have their own risk management departments, so form a partnership with a Trusted Choice Independent Insurance Agent experienced in insuring construction risks and obtain coverage from a company with expertise in handling construction claims.
• Form good relationships. Many companies that insure contractors are willing to have a meeting involving the customer, agent, loss control and claims staff. Take advantage of this and form good working relationships with the people who will respond to a severe claim. If the contractor uses a third party administrator for claim handling, meet in advance with the appropriate staff and get their contact information.

After a loss occurs, the company can do several things to manage the claim:

• Work with your insurance agent, insurance company, and others to evaluate the claim and prepare possible legal defenses.
• In cases, where the contractor’s liability is clear, make quick contact with the claimant and the family. Work with the medical facilities to ensure that the claimant does not receive a bill.
• Be truthful with the claimant, family, investigating authorities, and the media.
• Begin the claim investigation as soon as possible to determine the facts and build a defense strategy.
• In cases where the contractor’s liability is unclear, identify possible legal defenses. These can include contributory negligence on the part of others, no negligence on the contractor’s part, intervening causes, product defects, and others. Use these defenses to get the contractor dismissed from the case.

Good communications are the keys to successfully managing a catastrophic injury case – with the claimant and family, medical providers, insurance adjusters, and other interested parties.

• Be prepared to answer the claimant’s questions or to find the answers. Frequent and meaningful communication with the claimant should assure him that the company cares about his situation. A claimant who feels that someone is paying attention to his needs is less likely to hire a lawyer.
• Working with medical providers will keep the contractor informed as to the claimant’s progress, expected therapies and treatments, and projected length of disability.
• Work with the insurance company and medical providers to minimize and resolve disputes.
• Stay involved with the insurance company’s handling of the claim. The company’s goals might not be the same as the contractor’s.

No contractor wants to see someone harmed because of their construction operations. However, severe injuries can and do occur on job sites. With careful pre planning, proactive involvement after the fact, and prudent claim management, a contractor can do the right thing by the claimant and protect his business at the same time.

Do you know about your Homeowners Insurance Policy?

If you feel in a quandary when you look at your homeowner’s insurance, take heart; you are not alone. In fact, a recent study conducted by Harris Interactive for Travelers Insurance shows that a large number of American homeowners are unsure of their coverage specifics. Many of these homeowners are under insured and the smallest disaster could send them into a financial hardship.

The researchers questioned more than 1,300 homeowners to determine exactly what they knew about their homeowners insurance coverage. They also asked the study participants how often they reviewed their homeowners insurance policy to ensure they maintained appropriate coverage and how they conducted their review.  According to the survey data, more than 44 percent of those surveyed had not examined their home insurance coverage in the past year. Some respondents had not reviewed their home insurance policy in the last 10 years.

The “Travelers In-synch Homeowner’s Insurance Study” also indicated that nearly 27 percent of these homeowners weren’t sure whether their policy would cover the cost of rebuilding their home. Thirty-six percent didn’t know whether their home insurance policy would cover damage caused by a hurricane. Forty-two percent were unsure if they had earthquake insurance coverage. Twenty-six percent didn’t know if they had coverage against flood damage or if they had Flood Insurance, and 37 percent didn’t know whether their home insurance policy would cover a prolonged hotel stay if their home were damaged.

Many items impact the amount of homeowner’s insurance coverage you need. That’s why it is important to review your insurance coverage frequently. Here are some criteria to use in your review:

• Have you recently remodeled your home?
  If you’ve improved your home, chances are you’ve increased its estimated replacement cost.

• Has the inflation rate increased since your home was last appraised?
  Certain conditions, such as severe weather, can increase the demand for labor and materials, which raises costs beyond the normal inflation level. It is important to update your coverage each year to account for changing inflation.

• What factors influence building costs in your area?
  Replacement costs are directly proportionate to factors, such as the availability of labor, the current demand for labor, and the cost of construction materials. Adjusting your coverage regularly can ensure your policy will provide the money you need to rebuild.

To determine whether you have adequate homeowner’s insurance coverage you should know your home’s estimated replacement cost. Keep in mind that your replacement cost could be higher or lower than your home’s market value. You should also consider the building materials used to construct your home. The more difficult the building materials are to find, the higher your replacement cost. Your coverage needs to reflect these increased costs.

The best way to stay ahead of changing costs is to contact your insurance agent annually to discuss your current coverage and your changing needs. They can help you manage risk by updating your coverage so there won’t be any surprises should your home be damaged.

 

Can Social Media Get You Sued?

When using social media sites, it is easy to get carried away with expressing disgust or irritation. Everyone is entitled to their own opinion, but it is important to avoid libel. The first step in avoiding it is to know the definition. Libel is any type of defamation that takes place on a more permanent source. Some examples include printed publications, blogs, films or any other written documents. Those who write, publish or are involved in similar practices should read about publishing laws. It is important to fully understand what is constituted as libel or slander. Avoiding such trouble online is the best way to also avoid a costly lawsuit. In addition to being expensive, lawsuits also tarnish the reputations of trusted publishing sources. Even bloggers who have a faithful followers may lose them if libel becomes an issue.

One of the best ways to avoid libel is to check facts. Responsible journalism demands this practice. Never rely on commercial sites for accurate information. Wiki sites are also bad sources for information. Anyone can add text to them, so it is easy for inaccurate stories and figures to surface. If a specific piece of literature lists a person or organization as the main source of information, contact the main source for verification. Quotes and testimonials should also be verified before printing. If a libel suit surfaces, it is important to have a list of sources to back the information. If it is impossible to verify a piece of information directly, be sure to clearly cite the source where the words came from.

In addition to avoiding misquoting people, it is important to avoid trade libel. Making disparaging remarks about a product or the company producing it is considered trade libel. After purchasing a defective product, it is easy to vent personal frustration online. In some cases, people simply want to alert others about a bad experience. However, it is best to contact the offending company directly. If the matter cannot be solved, contact the Better Business Bureau to resolve the issue. Never post insulting comments about a company or product online. Many social media profiles are public, and a quick Internet search for a person’s name may show several social media posts. Avoid jokes that may be interpreted as libel.

Overall, the main idea to remember is to test a comment or statement before posting it. Think carefully about the comment. Would it hurt a company’s reputation? Is it personally insulting to a certain individual? If it may be damaging and cannot be verified completely, avoid posting it.

Does your Company Need Product Liability Insurance?

If your company manufactures any kind of product, from lemonade to engines, computers to clothing, it could easily find itself on the wrong side of a lawsuit by a plaintiff claiming your product(s) caused some kind of illness, injury or damage. In today’s litigious society, it is not even necessary for you to be the manufacturer of the product. Sellers are often sued alongside the manufacturers. That is why it is vital to have the right product liability insurance program for your business.

It’s only natural that people want to be safe from injury and property damage whether from food poisoning, getting into an auto accident due to tire failure, or having the foundation of their home crack, but how do protect your company from liability? The answer may be with product liability insurance.

Is your general liability insurance enough?

Most liability claims are covered as part of your company’s commercial general liability (CGL) insurance policy. However, products that are particularly likely to lead to liability may be handled separately. As part of a sound risk management program, you should know well in advance how your current business liability insurance coverage would respond to such claims.

The CGL policy covers any bodily injury and property damage occurring away from your business premises that happens as a result of your product or completed work. If a product is consumed on the same premises, such as food served in a restaurant, the policy provides coverage once the insured has relinquished possession of the product whether the injury or damage occurs on or away from the premises.

The standard policy excludes damage to the product when the damage was caused by some part of the product itself or faulty workmanship in its manufacturing. For example, one small part in a complex, expensive piece of equipment may fail and cause tremendous damage to that equipment. If the part that fails was purchased from an independent subcontractor, the insurer of the manufacturer of that part would cover damage to the equipment. By contrast, if the manufacturer of the expensive equipment itself produced the piece that failed, the damage is not insured under the CGL policy.

A product liability exposure lasts as long as the product is in use. Someone may be injured or damage may result from use of the product years after it was manufactured and the product may no longer be in production. Product liability insurance should be kept in force as long as the products are being used and could cause injury or damage. Partnerships and sole proprietorships are especially vulnerable. These business owners cannot evade personal liability exposure by taking cover behind a corporate shield; thus, they need to take particular care to keep product liability coverage continuously in force. Because of the continued liability exposure, insurers require insured’s to provide detailed information about discontinued products.

The CGL provides coverage for product liability that may arise when products are sold internationally, but only if liability is determined by a lawsuit in the United States, Puerto Rico, or Canada. Since product liability lawsuits are often filed in the country where the alleged injury or damage occurred, any business whose products are sold overseas will need a foreign coverage endorsement added to its CGL policy.  Also, if the property is manufactured outside of the United States and you are acting as the distributor or the wholesaler or retailer in the county, then you too need products liability coverage, because most likely the manufacturer is not providing this coverage.

Another type of coverage not provided by the CGL policy is the expense of a product recall, though this can be expensive and severely damaging to a company’s reputation. Separate product withdrawal expense insurance may be available depending on the particulars of your business and its product.

The basic premise of most product liability lawsuits is that the product manufacturer or vendor failed to take appropriate steps to insure the product was safe and sound. It is impossible to eliminate all hazards in connection with many products. No matter what you do, someone could fall off a ladder or burn themselves with a hair dryer, and so forth. To show that you did everything possible to prevent such injuries, it is critically important to communicate with buyers and users of the product about such hazards. The thing to remember is that if there is a lawsuit, your best defense is to prove you took all reasonable measures to assure no one would be injured.

 

The University of Utah completed a study that revealed some startling results about the likelihood of children being struck by a truck or minivan backing out of a driveway. Researchers found that children are 2.4 times more likely to be struck by a van and 53% more likely to be hit by a truck than by a car. The study also found that children hit by trucks or minivans are more likely to require hospitalization, surgery, and treatment in an intensive care unit than children backed over by cars.

The research was conducted using medical records and police reports that provided back-over injury data for Utah children under age 10 from 1998 to 2003. The number of state-registered vehicles was used to determine if injuries were more common among certain types of vehicles. The researchers further discovered that driveway back-over injuries represent an incidence of 7.09 per 100,000 children younger than 10 years old annually. Passenger cars account for only 1.62 injuries per 100,000 registered vehicles.  Previous reports have suggested that trucks and minivans produce a large rear blind spot, which makes them especially susceptible to this type of accident. However, this is the first study in the United States that has attempted to document the rate of injury by these vehicles.

The researchers emphasized the importance of educating parents and young children about the rules for safe play in driveways. They commented on the availability of rear cameras and sensors to warn a driver that a child or other obstacle is behind a vehicle. However, the study noted that there is no substitute for walking behind, or at least looking behind your vehicle before putting the car in reverse.

The federal government has also been working on this problem. Legislation pending in Congress would require the National Highway Traffic Safety Administration (NHTSA) to set a standard for rear visibility that all vehicles must meet. Larger rear-view mirrors, rear sensors that sound a warning beep or cameras are among the options.

NHTSA expects to complete work on a study on the various types of back-over technology within a couple of months. The purpose of the study is to examine how effective the systems are and how they are used by drivers. The information will then be used to establish a standard.

Why are Certificates of Insurance so important?

More and more companies are hiring independent contractors to handle not only administrative matters, such as benefits and human resources, but also sales and distribution. With this delegation of authority to third-party suppliers comes less direct control over these operations, and becomes the need for clients to demand that vendors provide them with timely Certificates of Insurance (COI).

The Certificate of Insurance (COI) proves that the insured (the third party) has purchased the insurance coverages as required by the outsourcing client. But, the COI also states that the holder of the certificate has no legal right to be covered by the insurance described in the COI, nor does it amend, extend or alter the represented coverage. The Certificates of Insurance (COI) only shows that the outside contractor has the insurance coverage as explained on the certificate. This protects the business that has contracted with the third party against liability for negligence caused by the independent contractor up to the limits of the policy.

It is the responsibility of the independent contractor to provide the Certificate of Insurance (COI) to the client that has hired the firm. Usually a COI is prepared by an agent/broker with a copy sent to the insurance company and the client for whom the third party has contracted to perform certain functions.

The Certificate of Insurance (COI) contains the name of the insured, the name of the insurance companies issuing the policies as stated on the COI, what specific coverages are contained in the insurance policies issued to the insured, and various descriptions of normal policy terms, exclusions and conditions.

Most often Certificates of Insurance are obtained for commercial general liability to provide protection from liability arising out of the insured’s premises or operations, products and completed operations. Usually, a general form will provide broad, standardized coverage terms. In cases, where the coverage is more complex and of a higher risk, manuscript forms of a COI can be written specifically by or for an insurance company. These manuscript COIs should be reviewed carefully for the scope of coverage being provided.

There are two types of general liability insurance forms — claims-made and occurrence. The trigger that compels the policy to respond is the main difference between the two forms. In the occurrence policy, occurrences are covered that take place during the policy period, no matter when a claim is reported. A claims-made insurance policy requires that the occurrence take place after the retroactive date and the claim be reported during the policy period. Most COIs use the occurrence form for all independent contractors as claims-made policies limit coverage.

But simply having a COI in hand does not always mean that the independent contractor has the insurance coverage. A prudent practice is to have a system to audit, review and correct the certificates to reflect the provisions in the contracts. Some clients establish an auditing program in house, while others have the insurance agent or broker manage the program as part of their fee arrangement. This cost depends greatly on the workload.

The consequences of not monitoring COIs of a third party can be costly for the firm that hired the contractor. Consider this sobering example. A business hired an independent contractor to provide distribution service for the company. An employee of the vendor had a serious car accident, and soon afterwards, the contractor ceased business. When the employee began submitting workers’ compensation insurance claims, there was no coverage — the contractor had never maintained that insurance. Unfortunately, the company had not insisted on a COI from the independent contractor to verify this coverage. Casting about for payment of the claim, the court ruled that the vendor’s employee was a statutory employee of the company that hired the contractor. The workers’ compensation insurance claims have totaled more than $100,000 with more to come.

This is just one of many chilling cases of companies that have been caught with unexpected losses that came from not requiring proper COIs from independent contractors and auditing them to make sure they remain current and reflect the actual coverages held by the insured.

If you have any questions on how Certificates of Insurance work, or any other general insurance questions feel free to call one of our experienced team members at Huff Insurance.