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Commercial Insurance Blog

500 Million Yahoo users hacked - What to do?

Posted by Geoffrey Gordon on Fri, Sep 23, 2016 @ 10:41 AM

Yahoo recently announced that 500 million Yahoo accounts were hacked.  Cyber criminals are already taking advantage of Yahoo accounts, and these guys are very good at what they do,   Here are a few suggestions on steps to protect yourself.

If you are a Yahoo user,yahoo_accounts_hacked-662163-edited.jpg

  • go to Yahoo in your browser (chrome or Internet Explorer) directly. Do not follow a link in any email. Reset your password and make it a strong, complex password with letters, numbers and symbols, or a pass-phrase.
  • If you were using that same password on multiple websites, change them, Using the same password all over the place is an invitation to get hacked.  If you did use your Yahoo password on other sites, change the password there too.
  • Also, change the security questions and make the answer something non-obvious.
  • Add 2-step verification: any changes to your account, including access from an unexpected computer requires sending a text or getting a call to your phone.

For non-Yahoo users:

  • Watch out for any phishing emails that relate to Yahoo in any way.
  • Be suspicious of Yahoo related emails, including emails that look like they're from people you know who use Yahoo! email accounts.  It might NOT actually be your friend.

This is a major breach in security and should makeus all cognizant of information held on line.

Tags: cyber, Cyber Liability

What is a Package Policy?

Posted by Geoffrey Gordon on Mon, Aug 08, 2016 @ 04:33 PM

Success_Starts_Here_Freeway_Style_Desert_Landscape.jpgA package policy is a type of insurance policy that usually includes more than one kind of insurance policy. The most common package policy brings property coverage, such as for buildings or business contents, together with liability, such as premises liability or product liability.

One advantage to packaging coverages is the cost. When a single company can provide coverage for several lines of business, such as property, liability, business income, and so forth, they can offer pricing considerations.

A business owner's policy is the most common type of package policy, but other package policies comprise the majority of commercial insurance programs when more than one line of insurance is written by the same insurance company.

For example, a company with no property except a marine and liability exposure could have a package policy covering those two lines. A package policy may be used when the business doesn't qualify for the broadest form, a business owners policy.

Two coverages included in a business owner's policy that might need to be priced specifically are business income and product liability. For example, many restaurants use a package policy because the product liability - food poisoning or choking – needs to be specifically rated.

Similarly some businesses have such large business income and extra expense needs that that coverage also needs to be rated specifically. 

The advantage to a non-business owner package policy is that companies only buy coverages specifically asked for. A business owner's policy includes many many coverages that maybe not necessary but also some that may be necessary but reflect unanticipated needs.

Certain lines are very rarely included under a package policy, most commonly Worker's Compensation, and automobile or fleet insurance.  These generally stay as separate policies because of the combination of the highly regulated nature of these lines and disparate underwriting considerations.

To find out more about what which package policy is right for you, CALL US at (781) 659-2262, Get a Quote, or follow us on any of our social media pages.

 

Tags: commercial, BOP, insurance, business owner policy, commercial package policy, CPP, package policy

What is a BOP?

Posted by Geoffrey Gordon on Fri, Jul 29, 2016 @ 01:52 PM

A BOP is an acronym for Business Owner’s Policy and is a good simple solution for many small businesses’ core property and liability insurance needs.

A typical BOP has three primary sections:

  1. Property coverage for your business property such as furniture, stock and inventory.

  2. Liability coverage in case you are sued or your product hurts somebody.

  3. And business income coverage if your business is damaged such that it cannot operate for a period of time. This coverage will cover lost income including payroll and profits.

 

A business owner’s policy is the insurance industry's answer to small businesses inspired by the homeowners policy that most people have to insure their homes. With a homeowners policy is considerred a “package” of disparate coverages.  The homeowner gets financial protection for their house, their contents (their stuff), liability coverage including defense, and a rental to live in if their house cannot be occupied. The BOP works the same way, but for businesses.   It is also a package of a variety of protections, to include business property: furnishings, stock, and inventory, plus liability and defense coverage.  You can include the building when owned by the same owner too.  Instead of rental coverage included in the homeowners policy, a commercial enterprise needs to cover ongoing business expenses: to pay bills, include paroll and owners’ profit.

It includes these core features, plus a variety of different coverages that some businesses need.  These are usually included automatically.  It is more cost effective for insurance companies to offer a broad array of coverage that most small businesses need, rather than customize and price each policy a la carte.   Thus some coverages in a BOP won’t aply to your business; when cmparing, focus only on those that matter to your operations.

The BOP is good buy it does not do everything.  A risk important for businesses today includes employment practices liability Insurance which is excluded under regular liability coverages as well as most BOPs.  Given the growth in claims for discrimination and wrongful termination, this coverage can either be added to a bop or by buying separate coverage. Similarly liability arising out of a data breach or other cyber attacks are normally not included in a bop. Separate coverage is appropriate.

Naturally the BOP does not include many specialty coverage as such as pollution, directors and officers and other specific needs. A BOP should be written in concert with Worker's Compensation, which protects employees when they are hurt on the job, or business fleet or auto insurance, also always handled separately.

But by itself and when eligible the BOP is a well priced and broad solution for many businesses.

Larger businesses have more complicated needs, and coverages are more appropriately obtained on an à la carte basis. It is common to package or combine the property and liability coverages along with business income protection, in a non-bop policy, but nor is it unusual to use separate policies for all of these needs.

Think the BOP is right for you? Get a Quote today! Or call us at (800) 649-3252

 
 

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To find out more about what we can do for you, CALL US at (781) 659-2262, Get a Quote,
Or follow us on any of our social media pages.

Tags: commercial, owners, policy, insurance, Business

What If a Contractor Takes Money but Doesn’t do the Work?

Posted by Jane Logan on Fri, Jul 22, 2016 @ 04:39 PM

what if a contractor takes money but doesn’t do the work

After an insurance claim you’ll probably need to hire a contractor to repair or rebuild your home or commercial building.  

When hiring a contractor you want to be sure they’re insured in case they injure someone or cause property damage while working.  At the very minimum, the contractor should provide you with a Certificate of Insurance showing they have General Liability and Auto Liability along with Workers Compensation coverage.  The Certificate of Insurance should have a current date in the top right of the form and your name in the Certificate Holder area in the bottom left of the form.

 

But what protects you from a contractor who takes your money but doesn’t start or starts but doesn’t finish the job?

Contractor Bonds are a financial guarantee that a contractor will perform as agreed to in a construction contract.  For example, you pay a contractor a $25,000 deposit on a $100,000 job, the contractor takes your money but doesn’t do the work.  If the contractor had provided a Bond naming you as the Obligee (protected person) you’d file a claim with Bond company, they pay you the $25,000 you’re owed by the contractor.

Bonds and insurance are completely different:

  • Insurance pays on behalf of and protects the contractor from having to pay if they accidentally cause injury or property damage to others. The insurance company doesn’t expect the contractor to reimburse them for the claim paid other than the Deductible, if any, applicable.

  • Bonds pay instead of the contractor – the Bond Company pays you but they do expect the contractor to reimburse them for the Bond claim paid.

Because Bonds cover events not accidental or outside the control the contractor, applying for a Bond is more like applying for a loan than applying for insurance.  Bond companies want to know if they pay a claim the contractor has the ability to pay them back.  Even if the contractor asks you to cover the cost of the Bond, it will be money well spent to guarantee you won’t lose your money to a contractor who won’t or can’t complete the work.

For more information on hiring a contractor and the Massachusetts Contractor Guarantee Fund:

http://www.mass.gov/ocabr/consumer-rights-and-resources/home-improvement-contract

http://www.mass.gov/ocabr/consumer-rights-and-resources/home-improvement-contract/guaranty-fund/guaranty-fund.html

Tags: Certificate of Insurance, insurance, insurance claim, bonds, contractor

Operating a business at home can void homeowner insurance coverage

Posted by Jane Logan on Tue, May 31, 2016 @ 02:57 PM

A homeowner policy is a bundle of coverages designed for an average homeowner.   Since most homeowners don’t operate a business at their home, a homeowner policy offers very limited, if any, coverage for business property or activities. Sometimes running a business out of your home voids coverage completely.

For example, most homeowner policies provide converge for Other Structures (buildings not attached to the dwelling) such as a detached garage, shed, barn or any free-standing building. However, if you operate a business out of a detached building, the Homeowner policy doesn’t provide coverage for the building.  Your homeowner policy may be able to cover the building for an additional premium charge, but you may need a commercial policy.

In addition to property coverage, a home business may change or void liability your liability coverage.

The main point to keep in mind is a homeowner policy is designed to cover activities typical of a private home. If you operate a business out of, or at your home, you should call your insurance agent to discuss your insurance coverage so you don’t find too late you don’t have coverage for you home based business.

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Tags: business insurance, homeowners insurance, home business, business owner policy

Should I cancel my insurance policy?

Posted by Jane Logan on Wed, May 04, 2016 @ 02:38 PM

The decision of when to cancel an insurance policy not being replaced with another policy depends on the type of policy:

Auto – In Massachusetts the vehicle may be deleted, or if there is only one vehicle on the policy the policy may be canceled when the vehicle is sold or the lease terminated, the registration canceled and the Plate Return Receipt submitted to your agent or insurance company.

Property – When the property has been sold and you no longer have an ownership or other interest in the property.

General Liability – When to cancel a liability policy depends on the coverage provided by the policy and the type of operation, service or product sold.  Standard General Liability policies provide coverage for three types of situations ongoing operations, completed operations and product liability.

For example, an electrician installs wires in a house, the ongoing operations covers him while he’s on the job site, completed operations covers him after the completes the work and products liability covers  the wiring, sockets, light fixtures installed in the house.   If the electrician closes his business and cancels his coverage he has no coverage for claims that occur after the cancellation date even though the work was done during the policy term because the coverage reads “the bodily injury or property damage must occur during the policy period”.  To clarify, an electrician installs wiring in August, he cancels his coverage in October and In December the wiring starts a fire – since he canceled his converge in October he has no coverage for the fire in December even though he installed the wiring in August when he had coverage.

Professional Liability - When all operations have ceased, however instead of canceling the policy purchase the extended reporting period or other coverage available to cover any claims reported in the future for services provided in the past.

Workers Compensation – When there is no employee, subcontract, contract or 1099 labor being used  or paid and the Principals aren’t required to be covered the policy may be canceled.  In Massachusetts if a corporation isn’t dissolved and the officers don’t want to carry Workers Compensation they may apply to be exempt from the law requiring the coverage.  In order to be exempt corporate officers must own at least 25% of stock in the corporation, this is the link to the MA Division of Industrial Accidents corporate officer exemption website: http://www.mass.gov/lwd/workers-compensation/investigations/form-153.html

Another issue to consider is have you signed any contracts require you to maintain coverage?

The decision to cancel a policy can be complicated; your agent should be able to help you make your decision.

Tags: Can I cancel my insurance policy?, Cancelling my Insurance

Securing Worker's Compensation insurance in Rhode Island

Posted by Geoffrey Gordon on Wed, Feb 17, 2016 @ 11:04 AM

Worker's Compensation insurance is required in all 50 states for employees who may be hurt on the job.  It is a form of no-fault insurance, meaning you don’t need to show that anyone was liable, or responsible for the accident or injury.  If it happens on the job, workers comp responds.   It includes both medical expenses and wage replacement.

Rhode_Island.png

Every state has different rates, rules, and classifications, and the highly regulated nature of Worker's Compensation can make securing coverage tedious due to bureaucratic inertia. But these steps will get you started in securing coverage as required under the law.

Here is a general outline of the pre-procedure for obtaining Worker's Compensation in the State of Rhode Island.

The process starts with establishing with the state of Rhode Island that you are a legitimate business.  For Massachusetts businesses this means obtaining from the Commonwealth of Massachusetts a Certificate of Good Standing.  This confirms is that you are up-to-date on your taxes to Massachusetts including unemployment tax. You can obtain this online at http://corp.sec.state.ma.us/CorpWeb/Certificates/CertificateOrderForm.aspx, using your existing Massachusetts unemployment insurance identification number in the ID number field.

Once you have a Massachusetts certificate of Good Standing you can apply to Rhode Island department of revenue as a non-resident business operating in Rhode Island.  You can begin at the State of Rhode Island Business regulation website, https://www.ri.gov/taxation/BAR/ or call 401-547-8700.  The main objective is to get your unemployment Tax ID number. 

Once you have an unemployment tax ID number for Rhode Island you can apply to the monopolistic Worker's Compensation insurance company, Beacon Mutual.   Our office assists existing Gordon Insurance customers who are entering Rhode Island by preparing and submitting the required documents.   Knowing your projected payroll in Rhode Island is required to submit for insurance, and often this is a ‘best guess’ when opening a new location.  All payrolls are subject to audit after the first year, so more realistic projections avoid audit surprises at the end of the policy year.  More about audits here.

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In general, Rhode Island workers compensation rates are higher than Massachusetts rates (the lowest in New England).  Ask us for a projection as you prepare to expand into the Ocean State.

If you do not have an agent licensed in Rhode Island, call 401-825-2667 or toll-free 888-886-4450, or visit https://www.beaconmutual.com/pages/Employers.aspx to submit directly. 

If you hire only independent contractors in Rhode Island, these contractors can opt out using the form DWC 11-IC which can be completed on-line here: https://wcompsys.dlt.ri.gov/Pages/Modules/ICWaiver/IC/OnlineCertificatePrintingdoc.aspx

 

Tags: RI workers compensation;

The Workers' Compensation Audit - Why Bother?

Posted by Geoffrey Gordon on Wed, Feb 10, 2016 @ 12:39 PM

Workers’ Compensation is a kind of insurance to protect employees from the cost of medical care and lost income if they are hurt at work.

The cost of Workers' Compensation is directly related to payroll.   Different types of work (based on chances of injury) use different classifications, each of which carry specific rates.   While rates do differ from state to state because of differing loss expereince, rates within a state are the same.   So the rate for any given classification will be different in Massachusetts than it is in Connecticut or New Hampshire for example.

An important factor in getting the pricing correct is the policy year-end audit. The purpose is to reconcile the estimated payroll from the beginning of a policy year with the actual payroll at the end of the year.  For example, if you estimated your payroll would be $1,000,000 in the forthcoming year (and paid premiums based on that payoll), but payroll was actually $1,200,000, the company makes a retroactive adjustment, in this case for insurance based on an additional $200,000 of payroll.

There are three different kinds of audits, broadly speaking.

  1. The first is the self audit where the business owner, treasurer or bookkeeper lists employees, confirms what they do (to determine which class they belong in) and provides documentation from tax forms (quarterly 941s).
  2. Another type is the telephone audit where an auditor calls the book keeper or accountant and asks for the numbers over the phone. The classification and payroll assignment is done by the phone auditor. Tax forms and other documentation may follow by email, fax, or snail mail.
  3. The third format of audit is on-site, commonly used with larger companies and more complicated payroll. For on-site audits the auditor spends time going through the forms and collecting copies to confirm that tax forms match disclosed payroll records.

Once the payroll is known and classifications assigned, raters or underwriters calculate the corrected premium for the previous policy year. If the original estimate was high, then the company buying the Workers' Compensation (the policyholder) gets money back. If, on the other hand, the payroll estimated was low, then the premium for the additional payroll charge is assessed.  It is also payable and due immediately, since it is a charge from a prior year policy.

 What happens if the audit is not completed?

 Insurance companies really want you to complete that audit, tedious and painful as that process can be.

They have a more painful process for not completing the audit.

Here's how it goes down:

  1. If an audit is not received within a reasonable amount of time, (generally 60 days after the policy term ends), the carrier issues an “estimated audit”, increasing the payroll from the prior policy term by 50%.
  2. As with a real audit, the premium is due and payable immediately. When the invoice for half of your Workers’ Compensation is presented to the treasurer, owner or controller, it gets everyone's attention, which is the idea.   Because it is due right away, there is little time after the estimated audit is issued to have the real audit completed before a cancellation notice is issued for non-payment.   
  3. Remember, any premium due for an audit was for a prior policy year, so financing is seldom an option either. More often you need to pay the estimated audit, and perform a real audit to get an overpayment back.  It’s brutal.   
  4. Don’t ignore the cancellation notice, or it gets worse.  If the Insurance is canceled, the state Department of Industrial Accidents (DIA) is notified.  These guys are the ‘insurance police’ for Worker's Compensation compliance.   
  5. Because Workers’ Comp is required by law, the DIA can issue a stop work order at your place of business and literally shut your business down, since failure to have Workers' Comp for your employees is illegal. Once this happens the solution is to pay the previous carrier all money it is owed, and purchase a new policy.  To avoid delays (and continued stop-work order), the quickest solution is to go to Boston to get policy reissued by paying the estimated premium and applying for replacement insurance right at the Workers’ Compensation Assigned Risk Board.     

We have seen this clip a few times; it is not worth the aggravation.

For more about Workers’ Compensation and managing costs associated with this line of business, contact us here at Gordon insurance.

 

Tags: workers compensation, employee, insurance, audit

When to Call your Insurance Agent

Posted by Jane Logan on Thu, Jan 21, 2016 @ 05:35 PM

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Notifying your insurance agent of changes prevents suffering an uninsured loss. Any changes that could affect your insurance policy or coverage should be discussed with your agent, examples of changes that you should report immediately include:

 

  • Location change

  • Mailing address change

  • Additional locations

  • Expanding operations into new States

  • Changes in operations , products or services offered to your customers or clients

  • FEIN change

  • Legal change in entity type (Sole Proprietor to Corporation, LLC, PC etc.)

  • New vehicle – esp. if leasing in a State other than Massachusetts where evidence of insurance isn’t required to take delivery of a vehicle

  • New equipment or other business property

  • Signing a contract or lease - if a transaction involves signing documents there’s no doubt you need to review your insurance coverages

Calling your agent in advance could save you time and money; for example, moving to a new location less than a mile from the ocean will significantly increase the cost for property insurance, restrict coverage options and may require flood insurance.  A call to your agent before signing a lease could prevent additional expense or if the location costs more to insure than you expected, you may be able to negotiate a lease with better terms and rent.

 

Your agent should be able to tell you with just one quick phone call if the change you’re planning means you need to update your coverage – it’s worth a call to make sure!

Tags: Risk Changes, When to Call your Agent, Insurance Agent, Insurance Policy Changes

The timing, purpose, and reply to an Insurance Inspection

Posted by Geoffrey Gordon on Fri, Jan 15, 2016 @ 05:13 PM

When you insure a building with a new insurance company, the company will send an inspector to inspect the property.   This inspection is done by company safety engineers, or hired contractors, and happens soon after the insurance takes effect.  The purpose is to identify ‘hazards”, or conditions which increase the chance of a loss, insured or not.  

These can be valuable: your insurance company is your risk partner for the property, writing the checks when things go wrong.  And all losses, insured or not, are distracting to the core business operations (and income stream) of the property.  

Timing of the inspection:

Most insurance inspections occur within 30 days of the new policy.  Many inspections need to view the interior of the residence as well.  The company will usually contact you and arrange for the inspection, but conduct unannounced inspections on occasion.

Bear in mind that inspectors are paid to perform inspections, not to try to get an appointment with you.  Failure to agree on a date or delaying an inspection more than once will set into motion non-compliance complications that will make insuring the property more expensive and difficult for the future.  Our advice: just get it over with.

The inspection typically takes anywhere from 30 minutes to a couple hours, depending on the size and nature of the property.  Commercial properties take longer than habitational.  The owner or an authorized person with full access is often needed to be on-site for the inspection.   

Additional Purposes of an inspection:

Rebuild cost

The first objective is to make sure the building is insured properly: that the policy's coverage reflects the cost to rebuild in the event of a total loss.  When we first prepare a property for shopping the insurance we often use replacement value software to determine the rebuild value. The software is good, but every property is unique, and public records are limited.   The most accurate way to validate the cost to rebuild for you is via an on-site inspection.

Identify hazards

Hazards are conditions which may lead to a loss - insured or not. To identify conditions where a loss might occur: safety items we see commonly in habitational (apartment) buildings include a deck with no handrails, or potholes (trip and fall hazards) in the sidewalk, or other susceptibility to loss, most commonly water.

What will be inspected?

Expect that the inspector will ask to see each room including the basement and all mechanicals: HVAC systems, sprinkler and other plumbing, roof, and so forth.  They will take pictures from both inside and out to help tell the story to an underwriter.  Underwriters are sponges for risk-based information, and the inspection fills in what the submitting agent or broker had not disclosed.

The inspector will usually measure the property to validate dimensions information.  If dogs are permitted in a habitational property (rented house or apartments), they will ask about written rules for tenants.  Dogs account for about 30% of personal liability claims payments, so this is one example where clear and enforced tenant rules matter.

They’ll inspect the roof condition, and inspect gutters and downspouts for flow and connections.  Trees or bushes over the roof will degrade the roof before its time, and roofs are important: they keep buildings dry.  

Here’s a tip before the inspector arrives: Debris in the yard or in common areas is a sure sign of lax property management. The little things matter.  Keep the property as clean and tidy as possible.

Avoiding surprises

If you are buying a new property, disclose everything to your insurance agent or broker up front, particularly if you are planning any construction beyond cosmetic improvement.  The pricing of the risk is very different for a functioning and rented habitational or commercial building than a vacant building or an active construction site.  Underwriters don’t like surprises, and have the right – within limited time frame – to get off a policy if conditions are not what were presented for initial pricing.  Both situations can be addressed by our agency but it is always best to disclose these plans when setting up the policy. The insurance company’s contractual right to cancel a policy for misrepresentation gives them all the leverage.

Benefits

One benefit of a home insurance inspection can be that discounts or credits are identified by the inspector that the customer was not aware. For example, some properties with central fire and burglar alarms do not realize their system also has a low temperature sensors.

The other benefit of course is that a risk professional has examined the property and identified areas most likely to lead to a loss.  As the party with the financial interest in preventing losses, carriers will ask for some changes, and demand others, depending on the perceived risk severity.

What happens after the inspection?

When the inspection is complete, a written report goes to the insurance company. They review and confirm the coverage amount and outline concerns (called recommendations’).    As mentioned above, some recommendations are just that; many are requirements: for example: if a sprinkler system has not been tested within its required cycle, or if a roof leaks.   They’ll forward the report to you or through the agent or broker.   As agent / brokers, we are adept at communications between the underwriter and property owners.  The most important part is opening up a dialogue with the insurance company.   We are experienced with these and will assist with crafting an agreeable action plan.

Keeping costs down – for you, for everyone

Having your property inspected keeps the cost of your insurance down in several ways.  It begins with reinsurance, the insurance that companies buy to protect the company from large catastrophic losses.  Companies that conduct the most rigorous inspections get deeper discounts on reinsurance, a cost passed along to the customers.  Companies that identify and prevent losses will have lower costs before using their reinsurance and continue to offer the better prices.

If you are thinking about buying a property and need a great risk partner to help you navigate this part, contact the experts at Gordon Insurance.

 

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Tags: commercial insurance, Hazards, Insurance Inspections, Inspections, Property Inspections, Apartment Inspections, Inspection Recommendations

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