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Insurance problems and cures

Archive for September 2010

Following flood conditions in rivers and streams

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If you would like to follow the increase in streamflows around NJ (in case the weather forecast comes true), here’s the official US waterdata site for NJ. The little green and orange dotes (average and low flow) will turn blue, or black if they’re going to flood. Or check us at  if you have any questions.

Written by gbwinsurance

September 29, 2010 at 2:23 pm

National Flood Insurance Program approved for one year

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Congress got its act together and approved a one year extension of the NFIP. Not, perhaps, statesmanlike but good enough for the moment. Call a local flood insurance authorized agent if you need coverage. It still takes a month to go into effect. for more information

Written by gbwinsurance

September 27, 2010 at 8:25 am

Flood Insurance to expire 9/30

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Here we go again. Congress has no problem inconveniencing property owners and business people. These repeated disruptions come about because two senators play chicken with the re-authorization, trying to hold up the bill to get their version passed. Their version doesn’t have support and would bankrupt the program even more deeply, but facts are not a problem in Washington. Here’s what we just got from Travelers Insurance, which is one of the servicing companies.

“Dear Travelers Flood Agent,
We are writing to provide you with an update on the National Flood Insurance Program (NFIP).
As you are likely aware, in July, Congress passed a bill that extended the statutory authority to issue flood policies pursuant to the NFIP. The NFIP is due to expire again on September 30, 2010.
Over the past several months, we have continued to work with the industry trades and FEMA, both
of which are hopeful that Congress will pass another extension prior to the September 30, 2010 deadline. While we are hopeful that Congress will pass the necessary bill, we believe it is important
to provide you with the necessary information in the event Congress does not take action prior to the expiration of the Program.
Under existing statutory authority, we can process and issue policies for all new applications, renewals and endorsements for coverage changes, provided they are accompanied by the appropriate premium and received in our offices on or before September 30, 2010, regardless of the actual effective date of the policy.
Should Congress fail to extend the program on or before September 30, 2010 we would not be able
to process or issue policies until the NFIP was re-authorized. “

Written by gbwinsurance

September 20, 2010 at 7:50 pm

Premises security issues 3

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Brief legal note: Premises security cases are difficult to settle; there may be horrific injuries or damages. But the law is favorable to the defense in most states. Courts generally hold that property owners are not guarantors of public safety; they are responsible for reasonable security. And when liability is apportioned, a judge may well be reluctant to assign more responsibility to the property owner than to the assailant.

Are there crimes in the area? What kind? How close? How many?
What security features does the building have? What is the quality of maintenance? Do you screen building staff?

By the way, we’ve worked with a large building where one security staff member committed a theft and another was responsible for sexual harassment just short of assault. Reviewing the security camera record on that case, the victim should have pressed assault charges. While Workers Compensation might bar a case against the employer, it would not protect the security company, property management company, or building owner.

Another consideration: we see large office buildings where a whole floor or wing is unoccupied in the current economic situation. How are you protecting the property from damage? How are you making sure that tenants or visitors don’t gain access to that area, or drag a person into that area for assault or robbery?

Premises security issues 2

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This issue is heating up. We see seminars for the plaintiffs bar, and seminars by the defense bar for their clients.
I just looked at a survey that says hotels generate 22% of premises security cases, hospitals 5%, and residences 36%. The rest spread across offices, bars, colleges, and so on.

The cost of a settlement depends on how much injury is alleged. The painful equation is: wrongful death > rape > assault > robbery. But small cases can still hit six figures.

So now what?  What are the risk management steps to take before the loss?

Written by gbwinsurance

September 14, 2010 at 4:37 pm

More Property Manager liability issues

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If you own and manage property, which has other owners, do you have coverage for E&O that harms the other owners? (Probably not.)
Do insurance carriers offer varying coverage for property managers so you have to review the form? (YES.)
What is your exposure as the management company if a third party is injured by an attacker on a property that you manage?
More to follow…

Written by gbwinsurance

September 13, 2010 at 1:07 pm

Workers Compensation Insurance Premium Credit

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Our thanks to Acadia Insurance for the following:
Most contractors know that workers compensation insurance premiums are based on payroll. However, many do not know that 20 states allow a “Contractors Premium Credit Adjustment” if the hourly wage level exceeds the state hourly average wage. (See list of states below.) Contractors paying union scale will almost always qualify for the credit. The size of the credit varies, but in most states, eligible contractors can earn a credit of anywhere from 5 percent to 40 percent, and discounts of 20 percent or more are not uncommon. Most states use a formula based on the state average weekly wage to determine the size of the credit; however, six states determine the credit from a table. This is a credit only, never a debit.

States allowing a Contractors Premium Credit Adjustment are Alaska, Connecticut, Delaware, Florida, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Virginia, and Wisconsin. To qualify, most states require at least 50 percent of the policy premium to be in construction codes. Connecticut, Illinois, and Oregon require the contractor to have an experience modifier below 1.0 in order to be eligible for the credit. The credit must be verified during the premium audit, so contractors must be diligent to maintain relevant documentation to ensure the credit will be upheld.

The Contractors Premium Credit Adjustment can be obtained by completing a simple application form supplied by the National Council on Compensation Insurance (NCCI) or the appropriate independent state bureau. Because the credit applies on a per-state basis, eligible contractors operating in one of these states can take advantage of the credit, even if they also have operations in other states that do not allow the credit. Contractors should contact their agent or broker to determine if they are eligible for, or receiving, this credit.