Friday, March 4, 2011

Have an "Umbrella" to protect you from the liability rain!

What amount of money will you be required to pay out when you are found negligent? There is no easy answer to this question, and whether for your business or your personal needs, you should have Umbrella or Excess liability coverage in addition to your standard liability policies to prepare for this possibility.

We all know that the today we live in is very litigious. Everyday we can read, hear or see a story about how someone recently won a verdict in which the defendant would be required to pay for their mistake. Often that is what it was too, a horrible, tragic mistake. Some unintentional defect in manufacture, a tool left where it shouldn't be, eye averted checking that last text while driving. We are all guilty of some type of brief lapse in judgment or sheer bad luck. Very often we catch the mistake before something bad happens, but unfortunately the odds catch up with us at the worst possible time.

When that storm happens, that is when you want to know you have an Umbrella or Excess liability insurance policy. These are in fact 2 kinds of coverage, with some of the same features, but also with some important differences. Both the Umbrellaand Excess liability polices provide an additional layer of liability protection in excess of you primary underlying insurance polices, such as your automobile, homeowners, general liability, etc. However, an Excess  policy is only that, excess over the policies named in the schedule. It does not enhance or broaden any coverage, just follows as more liability coverage over the named policies.

An Umbrella policy on the other hand, does all the same things as the Excess policy AND can drop down to be a Primary coverage under certain circumstances where there is no underlying liability coverage. For example for you liability assumed as the member of a Not for profit board, or for personal injury(libel, slander, false arrest, etc.) liability.

The distinction between the 2 types is very important and applies whether you are buying for your business or personal insurance needs. It is very important when comparing Excess or Umbrella policies. Though some standardization amongst carriers has begun, there is still significant variance between insurance carriers in their unique policy language. The most important area to look at in the policy language is the Definitions and the Exclusions. There is where you will find the meat of the coverage.

Most insurance companies today only offer the Excess form of the extra coverage. They may call it and umbrella policy, but in fact it is only an extra layer of coverage intend to "follow form" over the polices it names.

Regardless of whether or not you can get an Excess or Umbrella policy, it is important that you contact your independent insurance agent to see about securing this extra protection for you or your business. After all, if you are driving around with your assets in the front seat of your car, wouldn't you want to make sure they survive the accident?

Friday, January 7, 2011

Six Hours can give you 3 Years of Savings!

In 2005, New York State had one of the highest average car insurance rates in the country (National Association of Insurance Commissioners). Factors like area accident rates and location can affect even the perfect driver’s premium.

The New York State Department of Motor Vehicles (DMV) allows motorists to take a defensive driving course for not only traffic point reduction, but also a 10% car insurance discount. This rate decrease is mandatory and will last you 3 years. All you have to do is take the defensive driving course and present the certificate of completion to your insurance company.

The NY DMV, as part of its part of the New York Department of Motor Vehicle’s Internet Point and Insurance Reduction Program or (IPIRP), recently authorized the ability to complete the NY Defensive Driving course on line through authorized vendors. This course is designed to teach motorist’s driving strategies that help minimize risks associated with hazards on the road. In addition, this defensive driving courses includes applicable New York state traffic laws that help drivers use safer driving techniques to avoid and prevent accidents.

Some frequently asked questions related to the course are as follows:

  • How long is the New York Defensive Driving Course?
    This defensive driving course is a total of 6 hours. The online course, unlike the classroom course, allows you to log on and off and complete the course at your own pace.
  • Do I have to take a test at the end?
    No. This course does not require you to pass a final exam to get your certificate.
  • How do I know I can qualify for point reduction?
    You must have received the violation and points eighteen months before course completion. Points for earlier violations or future violations will not be affected.
  • How do I get my points reduced by taking this defensive driving course?
    Once you complete the course, we will notify the New York DMV. At that point, it will be entered on your driving record and it will automatically reduce your active point total by up to four points. Important: "Point reduction" means the DMV will not count up to four points on your driving record toward license revocation or suspension.
  • How do I verify my course completion has been noted on my driving record? We will be offering a service for you to pull your driving record at a nominal fee. However, if you need to verify the defensive driving course completion is on your record, you may request a copy of your driving record from the DMV. Click this link for more information and access to the New York DMV form: FORM
  • How do I qualify for insurance premium reduction by taking the defensive driving course?
    You will receive a certificate of completion when you graduate via the delivery method you choose. If you present this certificate of completion to your insurance company or agent within 90 days after course completion, your liability and collision premium reduction will begin immediately. This reduction will actually be retroactive to the date you completed the course.
    If you present your certificate more than 90 days after course completion, your insurer could issue the premium discount effective from the date presented.
  • How often can I take this defensive driving course to reduce my insurance premium?
    You may take the course once every 36 months to keep your insurance reduction benefits.
  • Can more than one person on the same insurance policy receive a discount for taking the course?
    The discount can be applied to only one driver for each covered vehicle. The insurance reduction applies to all motor vehicles principally operated by the motorist who completes the course.

The Woodoffice has recently partnered with the American Safety Council to provide an approved Online NY Defensive Driving Course. For a the low cost of just $25.00 per person you can get tremendous savings on your automobile insurance for 3 years. To access the course follow this link to the Client Tools section our our website. There you will find a banner link to the registration page for the course.

This course can not only save you money on your insurance, but is also a sound risk management strategy to help you be a better driver which can prevent an accident from occuring in the 1st place.

Happy and Safe Driving!

Monday, May 17, 2010

Their bite is worse then their bark

As this week, May 16-22, is National Dog Bite prevention week I thought this was a good topic for discussion and wanted to share a personal experience I had with this very subject matter.

While on an adventure south during a spring break trip, I stopped to stay with my brother in North Carolina. At the time, my brother had a room mate who had a dog, a Rottweiler. Now this dog was actually quite friendly, but did have some aggressive tendencies. While there, I came down stairs, encountered the dog and leaned over to pet him on top of the head. Unbeknownst to me, just few minutes before another friend had been playing a game with the dog where by he would lean over, scuffle with the dog then retreat; the dog in turn would playfully nip at him as he retreated. As you can imagine, as I leaned down the dog assumed this was a continuation of the game. Needless to say, the result was rather unpleasant and involved a trip to the hospital. I won’t share the details here, but let’s just say you would be surprised how little force the dog had to use to cause significant damage to me.

As an independent insurance agent, with over 20 years of experience I have seen a fair share of dog bite claims against my clients such as I just described. Dog bites continue to be a significant problem in the US and according to the Centers for Disease Control and Prevention (CDC) over 4.5 Million dog bite incidents occur in the US every year. Of those over 900,000 require medical care and well over half of them are children.

The Insurance Information Institute (III) shows for the years 2003 through 2008 there was an average of 15,310 claims per year and with an average total value of $337.83 million dollars in damages; that works out to a little over $22,000 per claim. The good news is that these were covered claims by the insurance carriers. The bad news is that the industry as a whole is engaging in breed profiling and closing the door on coverage for many know aggressive breeds of dogs. Their reaction to certain dogs can range from exclusion of coverage for the dog to outright refusal to write any liability coverage at all. Some of the breeds on various insurance carrier “hit lists” include:

  1. Akita
  2. Alaskan Malamute
  3. American Pit Bull Terrier
  4. Chow Chow
  5. Doberman Pincher
  6. German Shepard
  7. Rottweiler
  8. Siberian Husky
  9. Wolf Hybrids
  10. Any dog with a bite history

There is now a whole industry of specialty insurance carriers selling dog liability only policies, to help people that can not find insurance with the standard markets. However, a buyer of this type of coverage should be wary, as these policies tend to be written on proprietary forms that have terms and conditions limiting coverage. Also they are not inexpensive, though when faced with a complete lack of coverage at all, they can be worth the cost.

There are also many steps you can take to limit your risk of claim as a dog owner, regardless of the breed of dog you own. The III recommends the following:

  • Consult with a professional (e.g., veterinarian, animal behaviorist, or responsible breeder) to learn about suitable breeds of dogs for your household and neighborhood.
  • Spend time with a dog before buying or adopting it. Use caution when bringing a dog into a home of with an infant or toddler. Dogs with histories of aggression are inappropriate in households with children.
  • Be sensitive to cues that a child is fearful of or apprehensive about a dog and, if so, delay acquiring a dog. Never leave infants or young children alone with any dog.
  • Have your dog spayed or neutered. Studies show that dogs are three times more likely to bite if they are NOT neutered.
  • Socialize your dog so it knows how to act with other people and animals. Discourage children from disturbing a dog that is eating or sleeping.
  • Play non-aggressive games with your dog, such as “go fetch.” Playing aggressive games like “tug-of-war” can encourage inappropriate behavior.
  • Avoid exposing your dog to new situations in which you are unsure of its response.
  • Never approach a strange dog and always avoid eye contact with a dog that appears threatening.
  • Immediately seek professional advice from veterinarians, animal behaviorists, or responsible breeders if the dog develops aggressive or undesirable behaviors

The best tip of all is to never underestimate your own dog’s propensity to bite. After all, the bite on you wallet could be the worse bite of all.

Friday, April 30, 2010

Its a bad Environment to do business in.

With the massive oil slick containing hundreds of thousands of gallons of oil bearing down on the gulf coast I thought it was a good time to talk about Environmental Liability coverage. Now, I know that most small businesses are not faced with the possibility a of multi-billion dollar environmental disaster like this one; however, the level of the disaster is in the eye of the beholder and how relative it is to them.

Most businesses fail to recognize their own potential for some type of environmental mishap due to their operations. Environmental exposures are perceived to be exclusive to specific types of business, such as contractors, oil companies or automobile service operations. Any business that has large equipment/machinery (i.e. processing machines, refrigeration units, vehicles), storage tanks, chemicals etc has a potential for a pollution loss that should not be underestimated. Hotels, schools, manufacturers, hospitals, retail stores and restaurants all have the potential for an environmental mishap that could not only involve expensive clean up costs, but also expenses to restore the reputation of the business.

All businesses need to evaluate thier potential risk for some type of environmental liability loss and what they should do to manage it. Some of the critical questions to ask are:

What are its exposures?
What will the response be should an event occur?
How will we pay for the clean up & and any claims that may result

The cost of an event can not be understated. Management should understand when it comes to paying for any losses that their Commercial General Liability(CGL) coverage, in almost all cases, specifically excludes Environmental related claims and can not be relied upon as a financing source. The CGL policy was never intended, nor priced, to provide coverage for these types of losses. Fortunately there is insurance coverage available for these risks.

Known as Environmental Impairment Liability Coverage, it is designed specifically by insurance companies to handle the unique exposures and losses related to environmental issues. Key areas of coverage include:

  • Remediation Expense includes actual clean up costs, compensatory costs for cleanup costs incurred by others and related legal and defense expense.
  • Coverage for losses arising out of contamination due to the insured’s waste or products at Non-Owned Locations
  • Coverage available for loss arising out of contamination due to transport of the insured’s waste or product by the insured or a third party carrier
  • Underground Storage Tank coverage available
  • Coverage available for loss arising out of contamination due to the insured’s contracting operations
  • Coverage available for Business Interruption and Extra Expense due to contamination at an insured location
  • Image Restoration Coverage to assist the insured in restoring their reputation in the event of a claim or remediation expenses
  • Disciplinary proceeding defense cost
  • Coverage for the ‘midnight dumping’ at project sites or owned and leased locations – Contaminants illegally disposed of or abandoned by a third party
  • Coverage for the insured’s Emergency Expenses, to protect third parties or the environment from an imminent endangerment due to contamination
  • Coverage due to mold, legionella and low level radioactive matter or waste
  • Property Damage includes coverage for Natural Resource Damages
  • Bodily Injury includes medical and environmental monitoring
  • Remediation Expense includes both clean-up to the extent required by law and in absence of such laws to the extent recommended by an Environmental Professional

This coverage, though not inexpensive, is readily available from many insurance carriers for a wide variety of operations and situations. A true risk manager or responsible business owner will recognize having the insurance is does not preclude responsibility. Each business needs to set up a proactive strategy to deal with an event in a fast, yet effective manner should the need arise. The insurance should not be thought of as the exclusive remedy, but merely as the financing tool that allows them to be aggressive and timely in their response. A business should want their neighbors, customers, regulators and the public in general to know they care about what happens, and are acting quickly to mitigate the effects of the loss, thus limiting the harm.

Talk to an independent insurance agent who understands this type of coverage and can help provide you with the tools to evaluate your potential exposure. Stay ahead of any potential problems so they do not blind side your business. After all, the real potential damage from these types of losses is to the business environment you operate in

Monday, April 5, 2010

Your skill is what can get you into trouble!

During an economic downturn, especially a protracted one such as we are in now, many individuals turn to working from home as the new means of employment. In fact many companies will "down size" only to hire back an employee as a contractor to do the same work they were doing as an employee. This new "self-employed" status for individuals can create a range of new exposures to loss that may be missed without careful consideration.

The new exposures now faced with this "home-based" business include:

  • Property - some coverage can be found on the Homeowners (HO)policy but the amount can vary significantly from carrier to carrier. Also specialized coverage for computers, software, loss of income, valuable papers & records, etc; are virtually non-existent on a traditional HO policy.

  • General Liability - coverage for Bodily Injury (BI) & Property Damage (PD) related to the business can be endorsed on a LIMITED basis on a traditional HO policy. However it is usually only for on-premises (the home only) and fairly restricted in the types of business operations it will allow. No coverage for Advertising injury (libel, slander, copyright infringement, etc) is afforded either.

  • Professional Liability - This is by far the most likely area of exposure for a self-employed professional and for which there is NO coverage available on the HO policy .

It is this Professional Liability exposure I would like to address in greater detail. As a "Professional" or "Expert" you are typically being hired for your knowledge or skill in a given area. The subsequent advice or services you provide based on that expertise is what the client will in turn make decisions on. These decisions will have financial ramifications on the client's own business, and the results of those ramifications are your biggest exposure, especially if they are negative to the client's bottom line.

The damages your professional expertise may cause to a client is what you need to protect yourself from. More importantly it is the mere accusation of harm that can cost you tens of thousands of dollars in defending yourself from. You may be entirely blameless from having caused any financial harm to the client, but you still have a long and expensive road to go down in order to exonerate yourself and your reputation.

A Professional Liability (PL) policy, sometimes referred to as and Errors & Omissions policy, is your best protection from claims of negligence on behalf of clients who feel you provided faulty or unsound advice or services. The policy is fairly customized around the type of services you are providing. Often times it can be tailored to very specific types of work and are usually written with Insurance Companies well versed in your area of expertise. You want to be sure you choose coverage with knowledgeable insurers so that you can avail yourself of their legal and loss control experts should the need arise.

The PL policy is not a license to be reckless. You want to have good risk management strategies to help mitigate your exposure to claims from a disgruntled client. A critical component of risk management for the professional is a solid contract that clearly spells out the terms, conditions and expectations of the services to be provided. A contract is not a firewall against litigation, but may be an important piece of your defense. You should work with a good attorney who is knowledgeable about your business and where potential litigation arises from. Your contract will be the 1st line of defense should an issue arise.

When comparing coverage between insurance companies you should proceed carefully. There is no standardization between coverage forms of the various insurance companies that provide PL coverage. It is important to work with an Independent Insurance Agent to help you navigate through the various offerings to determine which policy is providing you with the best coverage for your premium dollars. Some things to look out for include:

  • Defense Costs- Are they included in the coverage limit or outside the limit of liability?

  • Deductible - Is it applicable to defense cost, damages or both?

  • Definition of covered services - Does it clearly define what you are doing as covered?

  • Territory of coverage - is it United States and territories, or is it world wide.

  • Coverage basis - Is coverage on a "Claims-Made" or "Occurrence" basis.

These are just some of the aspects of the coverage you should be cognizant of when procuring a PL policy for coverage Make sure you avail yourself of the knowledge and skill of your independent agent when looking in to this vital coverage for your business. After all you are hired for your expertise and skill, you should trust in theirs.

Friday, March 19, 2010

Spring brings flowers, birds, greenery and oh yeah Flood!

Last Friday evening was a beautiful spring (almost) evening here in Central New York, and flooding was the furthest thing from my mind with the sunny blue skies over head. That was until I ventured up to the new shed I built last year to rescue one of my daughter's bikes from it's winter slumber. You see the ground was literally seeping water around my shoes with each step and that reminded me that its Flood Season.

It is that time of year when the winter melt combined with the spring rains often creates the perfect recipe for flooding and tragically this peril is not covered by any personal property insurance policies (e.g. Homeowner Insurance) nor by 99% of commercial property policies in effect today. Sadly, despite millions of dollars in awareness advertising by the National Flood Insurance Program(NFIP) and written notice in every property policy letting the policyholders know, many insureds do not understand this gap in coverage exists until it is too late.

Let me be perfectly clear now so there is no misunderstanding:


There I said it, now you know. Of course you should understand what is meant when someone calls something a flood. The NFIP defines Flood as follows:

  • A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is the policyholder's property) from: --Overflow of inland or tidal waters; or--Unusual and rapid accumulation or runoff of surface waters from any source; or--Mudflow;or

  • Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.

The sad fact is it is not so clearly defined in most property policies out there. In fact the ISO Homeowners policy does not define it at all, but they do exclude it. You may wonder why there is no coverage for the exposure in your traditional property insurance policies, and it lies in the root of the catastrophic nature of this type of loss. For the most part floods are widespread and cause large amounts of damage. Do to this massive exposure it was deemed un-insurable by the traditional insurance companies. In response the federal government created the NFIP, a department of the Federal Emergency Management Agency (FEMA) in an effort to reduce the financial losses of consumers and public entities from the devastating effects of flooding. It was designed to provide a federally backed insurance market to handle the exposure of Flood as defined by NFIP.

The good news is you can buy flood insurance through your local Independent Insurance Agent via the NFIP or one of its approved Write Your Own (WYO) insurance carriers. This access is for both Consumers and Businesses, each in there own unique programs.

There are 2 critical things to remember when making the decision to purchase Flood Insurance. The first is that the only people that can purchase flood coverage through NFIP programs and have it be effective immediately is for a mortgage closing which requires the coverage. Otherwise you have to wait for 30 days from the date of application for your policy to become active. This stipulation was put in to prevent people from only securing coverage when there was an eminent threat of a flood, thus forcing participants to be proactive. The 2nd thing to remember is that contents of the structure are not automatically included in the base flood policy. So you will want to add that coverage in when you purchase the policy.

There are many other considerations when purchasing flood insurance. It is important you talk to an Independent Insurance Agent to discuss the coverages you need and the unique characteristics of your exposures. You will also find more information at the following website -

Its Flood Season....are you ready?

Friday, March 12, 2010

Protect yourself through "No-Fault" of your own.

Many states including New York are known as "No-Fault" states when it comes to coverage under your Personal Auto (PA) policy. This "No-Fault" status was brought on in the 1970's to help ensure that persons injured in auto accidents would have prompt and adequate resources to cover their injuries and subsequent income loss. In New York it came into effect on Feb. 1, 1974 as a result of the New York Comprehensive Motor Vehicle Insurance Reparations Act.

The intent of the law here in NY was to relieve the injured parties of the burden of the time consuming and often fruitless litigation needed to secure the money to pay for their injuries. At the time this law went into effect only 14% of liability premiums were reimbursing victims for their economic loss, and then only after 16 months from the time of the accident.

The law provides for a bundle of benefits to vehicle occupants that are injured as a result of a covered accident. These benefits are known as Personal Injury Protection (PIP) and they came from the promise of Basic Economic Loss stipulated in the legislation. In exchange for these guaranteed and promptly paid benefits, the covered individual gives up some legal rights to sue for what is known as non-economic damages, such as pain and suffering and offset by possible collection under other social programs (i.e. workers' compensation and social security). These benefit are payable regardless of who is at fault, hence the term "No-Fault". There is still the ability to litigate against the negligent party if the injury is one on the "verbal threshold". This is a list of nine injury types, and if the injury meets this definition they injured party may pursue litigation. The threshold list is:

  1. Death;

  2. Dismemberment;

  3. Significant disfigurement;

  4. A fracture;

  5. Loss of a fetus;

  6. Permanent loss of use of a body organ, member, function or system;

  7. Permanent consequential limitation of us of a body organ or member;

  8. Significant limitation of use of a body function or system;

  9. A medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment.

The PIP benefits, the product of the promise of Basic Economic Loss, are a up to $50,000 per person for the following in combination:

  • All eligible medical expenses resulting from the accident, without limit for time;

  • Income lost up to $2,000 per month and no more than 3 years;

  • Other reasonable and necessary expenses (i.e. transportation, cleaning) up to $25 per day and only for 1 year;


  • Death Benefits of $2,000 payable to the estate of the covered person.

It must be remembered that these benefits are guaranteed, however they may also come from other sources such as workers' compensation, Social Security or state disability benefits. They can contribute with your auto insurance to meet your Basic Economic Loss.

Under the law you also have the option to purchase and additional $25,000 of Optional Basic Economic Loss (OBEL) which can be used to cover the same benefits as the base $50,000. However, you or your legal representative are allowed to determine what it is spent on as opposed to the party who 1st demands it (e.g. your physician).

A NY automobile insurance policy holder also has access to purchase what is called Additional Personal Injury Protection. This as an additional amount of PIP of up to $100,000 which not only covers the 3 Basic Economic Loss benefits defined in the law; but also broadens the definition of an eligible injured person to include a NON-Residents of New York if they are a passenger in your vehicle while you are outside of NY state.

No Fault coverage is a complex yet critical component of your automobile insurance policy. It is very important you discuss this coverage thoroughly with you Independent Insurance Agent so that you fully understand how it impacts you and your family; and to determine the proper limits and structure of coverage.

At my agency we strongly encourage all of our clients to carry the maximum PIP benefits available to them. After all, the purpose of the benefits are to be sure you have the means necessary to get the medical care you need if you are injured in an automobile accident and $50,000 in today's health care climate does not go very far. As the additional cost to increase from the basic amount is nominal why not be sure you have the protection you and your family deserve.

Why expose yourself and your family to a serious financial situation from an automobile accident through "No-Fault" of your own?