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.

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:

YOU ARE NOT COVERED FOR FLOOD!

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 - http://www.floodsmart.gov/.

Its Flood Season....are you ready?

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;

and

• 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?

How can I save money on my Car Insurance?

Affordable personal auto insurance in today's economy can be a moving target. Here are 5 areas you can control to help you maintain the costs of your auto insurance without sacrificing critical coverage protection for you and your loved ones.

• Driving Record - The most obvious tip, but it can not be overstated. Your driving history is the biggest factor that insurance companies will look at when evaluating you for coverage. So drive defensively and consider taking a Defensive Drive Course. The course is a great refresher for good driving habits and rules of the rode. The cost of the course will often be recouped in the savings on your insurance in the 1st year and it is good for 3 years.
• Manage your Credit - The auto insurance companies have established a link between an individuals credit history and their likelihood of having an accident. Using what is referred to as your insurance credit score, they have modeling programs that can predict for them if your likely of having an accident. Managing your credit will help you to keep your rates low.
• Vehicle Type - You car is a significant factor in the cost of your insurance. Cost, age, body type, engine performance, weight, etc.; all factor in to what your premiums will be. Generally, the newer and more expensive a vehicle, the higher the cost. When you are considering a new vehicle, contact your independent insurance agent and have them give you a quote for your insurance if you were to buy the vehicle. The cost of your insurance should be part of your purchase decision.
• Premium Payment - Pay on time, another obvious statement that can't be said enough. Insurance companies are less and less tolerant of poor pay customers as they add significant costs to the servicing of the policy. A poor pay history can make you ineligible for preferred pricing. Also, pay in less installments; the less frequently you make payments (i.e. quarterly vs. monthly) the less installment fees you pay. These fees can range from as little as $1.00 to as high as $15.00! Several companies are now even offering a Paid in Full discount!
• Target Coverage - Make sure you are paying for the coverage you need. It often makes sense on your collision coverage to assume risk (i.e. higher deductibles) of loss to your vehicle or remove it all together if the vehicle is older; and use those savings to maintain higher limits in other areas (i.e. liability, no-fault, uninsured motorist, etc). You may want to consider removing the comprehensive coverage as well, though if wish to keep glass coverage you will need to keep this coverage in place.
• Fraud - About 10% of your insurance premium is the result of fraud. Insurance companies, regulators and law enforcement personnel are in a constant battle combating fraud. You can help; ask your state legislators to make the fight against insurance fraud one of their priorities. Report insurance fraud to your insurance agent, insurance company or local police when you see or suspect it. Speak out against insurance fraud to your friends, family, and business associates. After all, it's not just the big insurance companies that pay. All those costs eventually filter down to you.

Finally, a significantly important way you can help save money on your auto insurance is by working with an Independent Insurance Agent. An independent agent will advise you in the areas named above and as well as the right coverage for you. Then, with their freedom to go to multiple carriers, they can price out your customized coverage to make sure you are maximizing the discounts and credits you deserve.

"The art of living easily as to money is to pitch your scale of living one degree below your means."

Sir Henry Taylor

"Lights, Camera, Claim Settled!"

The aftermath of a fire or natural disaster is not the time you want to be trying to remember all the treasures and possessions you have accumulated over a lifetime. Now is the time you should be preparing for the possibility of a catastrophic property loss and a Home Inventory is the best place to start.

I know what your going to say, the thought of going through your whole house, cataloging each and every item does seem daunting, but there is perhaps an easier way - Video. Today's video cameras are so much more compact and versatile than even the models from just a few years ago. The ability to store the data digitally on discs or portable hard drives give you the flexibility to make multiple copies for safe keeping at a relatively small cost.

When doing the video inventory of your home make sure you do the following:

1. Go through every room in your home. Do no forget the garage, attic and basement.
2. As you pass items of significant value or personal significance, provide a verbal description including there value and date purchase if possible.
3. Make sure you show the labels for appliance and electronics, and be sure you can read the serial and model numbers on the video.
4. Be sure to included carpeting, artwork, toys, furniture, jewelry, guns, etc.
5. Open closets, cabinets and drawers so as to get coverage of the contents inside.
6. Go back through the video and make a written inventory to go with the video.
7. Store the video and inventory in a safe deposit box and send a copy to someone you trust.
8. REMEMBER TO UPDATE THE VIDEO AT LEAST ANNUALLY. Just add the new stuff, don't shoot the whole thing all over again.

In addition to the video you should not forget important documents. These you should photo copy; keeping the copy in your home and the originals in the same safe deposit box as the video. Some documents to consider would be:

• Personal - Birth certificates, will, passports, medical files, drivers license.
• Financial - Bank account info, stocks, financial instruments, life insurance policies, credit cards, tax returns
• Home - Title, deed, abstract, insurance policy, exterior photos, loan paperwork.

Any documents you have that will be difficult if not impossible to replace should be copied and stored securely off premises.

A little time spent now can save you a whole lot of anguish later and get you that much faster to a claim resolution. Now when the insurance claims adjuster says we will need an inventory, you can hand them the video with written summary. So what are you waiting for....LIGHTS! CAMERA! ACTION!

"Employee or Independent Contractor; Do I need Workers' Compensation Insurance?"

A very common question we get here in our agency is "Do I need Workers' Compensation Insurance for this person I occasionally hire to do work for me?" More often then not our answer is yes, because of the guidelines set by New York State.

There are 5 key factors to determining if an Employer-Employee relationship exists and thus Workers' Compensation is warranted.

1) CONTROL How much are you directing the actions of the individual in question? If you are telling the person how to do the work you have contracted them to do and are expecting them to be there doing it at specific times then likely they will be considered an employee. If however, they are operating completely on there own and on there own schedule, simply meeting the agreed to deadline, then they are more likely an independent contractor.

2) MATERIALS Are you providing all the tools and equipment they are using for the job? If yes, that is indicative on an Employer-Employee relationship.

3) PAYMENT Are you paying on a typical payroll schedule, such as daily or weekly (even monthly)? Most independent contractors are usually paid when the whole task is completed, or with a deposit and final payment. If you are paying on a schedule it may be considered an Employer-Employee relationship.

4) SIMILAR WORK Is the work or task similar to the work performed by the hiring business? If yes, this a marker of an Employer-Employee relationship. A person hired to frame a room by a carpenter is more likely to be considered an employee then say an lawyer hiring a electrician to put in a light fixture.

5) TERMINATION Do you retain full rights to hire and fire the person performing the work? A true independent contractor retains some control over how and when the work is performed.


These main factors will be taken in to consideration after an accident by workers' compensation law judge. Based on their findings a determination will be.

More often then not, the judge tends to rule that Workers' Compensation coverage was needed because an Employer-Employee relationship existed; hence our advice is typically that insurance be put in place. After all, it is far cheaper in the long run to purchase the coverage and get credit back from an audit, then to not have it and go through the legal and regulatory costs!

For more information about NYS guideline you can refer to the following link: http://www.wcb.state.ny.us/content/main/Employers/Coverage_wc/emp_empDefinition.jsp

Your Cell Phone is for more than calling in the claim!

The rapidly expanding capabilities of cell phones in today’s world are mind boggling to say the least. Calling, texting, email, pictures, video and web browsing are all just the tip of the iceberg. As the saying goes “We’ve only just begun”; with an “App” for everything from picking out wine to purchasing stocks the utilization of these handheld marvels of technology seems limitless.

One area they can be very helpful for right now is the claim process. Using just the features that are already built in to most phones today you can acquire, retain and forward key information related to a claim in real time. This will allow you to see a faster and more accurate settlement process with the insurance carrier or other party.

These devices can be helpful for virtually any type of claim, however I will use a typical auto accident as my example. Most auto accidents are of the “fender bender” variety, meaning 2 cars and no injuries. Regardless of who is at fault, you can use your phone to:

* Call the police so the accident can be reported.
* Take pictures of the accident scene, including positions of the vehicles and damage.
* Record information on the other driver such as name, contact, insurance and vehicle information.
* Gather information on witnesses, passenger and other parties(i.e. police officer) involved.
* Record information about accident itself including, time, date, weather conditions, road information, traffic conditions, etc.
* A record of events can be written while events are fresh in the mind, statements can even be recorded!

All of this critical yet often forgotten or lost information can be easy stored and transmitted to your agent for organization and processing. They in turn can get this to your own insurance carrier in a more timely fashion. This will help your agent to stay on top of the claim for you, speed up the work of the adjuster and get you to a satisfactory conclusion much faster.

If you in fact are the negligent party, it can help you to defend yourself and limit your exposure. With accurate information you can better aid your insurance company in defending you and limiting the potential for faulty or exaggerated claims by the other party. This is especially true if unfortunately it is more then a dented fender and people have been injured.

As illustrated, the benefit of a portable communication device at the time of a loss is in the gathering and retaining of information. Information is the key to any situation, the more you have the better off you are. Losses are more easily handled with accurate and pertinent information. These magical objects can make a world of difference and save you time.

Oh but please remember, it is better if they aide you AFTER the claim and not be the CAUSE OF a loss. Please do not use them while you are driving. :-)