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Commercial Insurance Blog

Business Interruption Insurance during a pandemic

Posted by Geoffrey Gordon

Mon, Mar 23, 2020 @ 10:01 AM

Here’s our take on business interruption insurance: First, we don’t make the call, meaning only the insurance companies apply policy language to situations presented.  That said, we believe the insurance industry has intentionally, and effectively, insulated itself from pandemic situations like this.  Guidance we’ve received directly from carriers reinforces this.   Black Swan

We have been working with our insurance carriers to understand if, and where, coverage exists.  We anticipate that in most, if not all cases, there will be no coverage for claims due to a loss of income from COVID-19.  Most insurance policies are clear that in order for there to be Business Income coverage, there must be a "direct physical loss to property", such as a fire, sprinkler release, vandalism, or other direct damage, first.

Further, the 'direct physical loss' trigger contains an exclusion for losses arising from "bacteria, virus, mold, or fungus..."  As mentioned, we believe the industry has insulated itself from the economic fallout of a pandemic.   

We have received some specific notices from carriers stating that there will be no coverage granted for COVID-19 claims.  Most carriers, however, have not issued guidance other than to say that when responding to a claim, they will determine if coverage exists by applying various provisions of the policy.  Due to the lack of specific guidance, we believe that for some of our clients, coverage may exist, depending on circumstance, industry and details on the loss.  As we have more details, or learn about legal challenges to this language, we will relay them to you. If you feel that you would like to open a claim with your insurance carrier, the team at Gordon Atlantic Insurance Agency is ready to assist

For what it’s worth, most billing departments are offering flexibility, based on case by case situations.  Where cash flow is the first issue with most businesses today, it’s one step. 

We are all in this together.  We will help in any way we can.

Tags: business interruption

“New” Inspection Requirement on Trailers used in Business

Posted by Gordon Atlantic Staff

Thu, Mar 05, 2020 @ 01:36 PM

“New” Inspection Requirement on Trailers used in Business

 

cars-road-vehicles-sky-172074

If you have a trailer, defined by mass.gov as: "Any vehicle or object on wheels that has no motor power of its own, but is drawn by, or used in combination with, a motor vehicle" and that vehicle is used to make money, regulations now state that the vehicle must have its own brakes regardless of the vehicle size.
Source: https://www.mass.gov/doc/540-cmr-4-annual-safety-and-combined-safety-and-emissions-inspection-of-all-motor-vehicles/download

Local towing companies have reported an uptick in vehicles towing trailers being pulled over by the police. So, if your business is using a trailer without brakes, it may be time to consider installing them. However, in some cases, it can be more economical for businesses' to simply buy a new trailer. Either way, complying with these "new" regulations is a good idea for your business.

 

 

The impact of Coronavirus on your business

Posted by Gordon Atlantic Staff

Thu, Mar 05, 2020 @ 12:02 PM

Corona Virus At Work

The Covid-19 Coronavirus is now spreading around the world, including the US. We are likely to see an uptick in cases in the coming weeks and months. There is potential for a prolonged and widespread outbreak in the US. As we’ve seen with South Korea, cases can spike from double digits to thousands in just a week or two.

One question that keeps coming up is:

Does insurance cover business interruptions when supply chains can’t deliver, or employees can’t come in to work?

The answer is, in most circumstances, No.   Broadly, these are considered business risks, not insurable risks.  Insurable risks in business interruption follow a direct physical loss, like fire, water, etc.  Sickness is not a direct physical loss, though it may feel that way.   This is one reason the stock market took such a beating last week: many of the losses businesses expect are not insured or insurable.


Corona Virus impact on your business

One way or another, your business is likely to be affected by this outbreak. The best way to protect your business is to protect your employees, including by setting them up to work from home. This limits person-to-person contact and reduces the risk of your employees infecting each other which ultimately reduces the risk to your business.  Not every business can have its employees work from home, but if you think you can make it happen, it’s strongly recommended to get set up now.

 

  1. Call your IT provider
    In China, South Korea, and Iran where case numbers are high, most schools and work places are closed and people are working from home. Twitter, which is based in San Francisco, has already told its employees to stay home because of the Coronavirus. Call your IT provider and ask them about work from home computer and phone set-ups for your employees. It’s important to move quickly to get set-up with a work from home system that works for your company.

  2. Set up a meeting with everyone on your team
    Go through all of the things that your employees need to work from home. Consider the obvious: computers, phones, email log-ins and other system log-in information. Also take a moment to figure out who on your team needs to communicate with each other and how. Imagine you couldn’t come back to the office for 2 months. What would you need to work effectively during that time?
  1. Limit or eliminate physical presence
    Think about how you can continue to do business with your customers without physical presence. How will a customer call into your business outside of the office and who will answer the phone? Are there in-person physical meetings with clients and contractors that can be replaced with Skype or other virtual meeting platforms? Think of how to replace as many physical interactions as possible with virtual ones.

  2. Have your office work from home for a day
    After you think you have a clear understanding of how your work from home system will function, and everything is in place, do a test work-from-home day. The first day will likely have hiccups, but it’s better to discover these issues during a test day when everyone still has access to your physical office.

  3. If you can’t work from home, how can you work away from other people?
    For businesses that cannot have employees work from home, the goal is the same, how can your business operate with limited person to person contact? For instance, a landscaping company may wish to assign one truck and one set of equipment to each employee and figure out how to have each employee work independently with limited contact during their day.

We hope you found this information helpful. For general information on the Covid-19 virus, see our other article: https://www.agordon.com/commercial-insurance-blog/preparing-for-the-coronavirus

Symptoms and Prevention of Covid-19

Business Response Planning from the CDC

Sign-up for CDC Alerts

 

Tags: disease, coronavirus, business risk, employee safety, covid-19

Preparing for the Coronavirus

Posted by Geoffrey Gordon

Fri, Feb 28, 2020 @ 12:12 PM

The Coronavirus has left China, it is no longer contained and is spreading around the world.   The world’s stock markets are more than 10% off their highs from a week ago, and financial people argue whether the effect will be short (bounce back) or longer.  We don’t know, but will know more about containment within the next week or two.

We do know a little about the Coronavirus.  What we know helps us assess and manage the risk.

What are the symptoms?  Just like the flu:

  • Cough
  • coronavirusFever
  • Shortness of breath.

One of the things about shortness of breath is a higher incidence than flu with CoVid-19 of developing pneumonia: fluid in the lungs.  Think complications.

Does a face mask help?

According to the CDC, a face mask won’t stop airborne particles from entering your lungs.  But if you have symptoms, a face mask will help prevent further spread.  Thus, if you start to feel like the flu, use a face mask to protect others.

How virulent is this disease?

At the latest count from Johns Hopkins, there were 2,867 deaths reported from 83,862 cases, or about 3% mortality, much higher than flu, not close to Ebola nor the 1917 Spanish Flu.    No deaths have been reported in the United States. 

How contagious is the disease?

A patient in California was recently diagnosed with no known recent travel, or connection to anyone traveling from China.   The speed with which this spread in China, and then escaped China, suggest high contagiousness.  It is most contagious when at its worst in the patient, but may be contagious 2-4 days before a patient shows any symptoms.  The CDC suggests keeping at least six feet distance from others to avoid inhaling respiratory droplets from a cough or sneeze.

What to do

  • Avoid contact with anyone who is sick, of anything, but especially coughing.
  • Wash your hands frequently through the day: soap and warm water.
  • Don’t touch your eyes, nose or mouth with unwashed hands.
  • Did we mention, wash your hands yet?

How long does it last on a surface?

If it behaves like its cousins MERS and SARS, this virus can last for over a week on a dry surface.  The good news is that ordinary household cleaners with a little bleach and / or hydrogen peroxide will kill the virus in minutes. 

Is there a vaccine?

Not yet, but Gilead Science is in late stage studies and Moderna has submitted a batch for clinical trials after sequencing the virus’s RNA.   Mass production won’t be available for months.

What else can we do?

Avoid crowds.  Schools in Hong King have moved most classes on-line.  Teachers work from home and student study from home.  Here at Gordon Atlantic, we are equipping more employees to be able to work from home.  We’re urging everyone to wash their hands after contact with customers, as well as when returning home after work or shopping or other interactions with others.

Be smart, be informed.   Wash your hands.

Tags: infection

Values - how we defined ours at Gordon Atlantic Insurance

Posted by Geoffrey Gordon

Mon, Dec 23, 2019 @ 04:00 PM

Values guide actions that propel our lives. A strong, clearly defined set of values helps individuals and groups gain clarity in decisions and directions. As business visionary Simon Sinek says, it’s the “Why” that matters for companies. Why do we do what we do? Stated differently, “What do we value?”.

I teach a class in Strategic Planning; the syllabus begins the planning with three foundational reference points. Values, Vision, and Mission. The starting point for a company’s exercise of self-identification is understanding its Values. Vision is an aspirational expression of these values, and Mission describes an execution strategy.  Thus, Values are the starting point of an organization’s “Why?”.

We recently conducted our own valuation analysis, which we modeled from a “Discernment” program at my church that helps people in transition to identify new career paths.  Here's how it works: the support team needs to understand the candidate’s values before offering ideas or making recommendations.  So before meeting with the support group, the candidate ponders a list of top ‘values. (see our list at the bottom of this article). From a list of 50 values, the candidate must discard 35 to select the top 15, no easy task, requiring contemplation and reflection.   Once these top 15 have been identified, he or she must prioritize just the top ten, removing five. Then, once more, the list is culled to just the top five. These become the core values that most define the candidate.  It's a solid starting point.

For our company discernment, three leaders went through this process.  Then we decided to get a pulse on the rest of our staff and invited everyone: take 50 values down to 15, to 10, to 5.  While this was a voluntary exercise, every employee participated. 

GAI values wordl-1

Because we’re nearly 20 people, we needed to weigh the values in a way that allowed for breadth of ideas, while recognizing leadership's influence. For  breadth, we included everyone's top ten values, but assigned a double value to their top five choices. Thus, if  “Integrity” was #2 and “Giving” was #7, integrity got twice the weight of giving.  To recognize that leadership drives strategic decisions in our company, we double-weighted three company leaders' results. Interestingly, most of our stated values were consistent between leadership and the other employees.  Evidently, we already have a culture that reflects management’s – and employees’ – core values.

Here’s the result of our internal exercise, in order:

Gordon Atlantic Insurance Top Values:

  • Family – We are a family-oriented business, for employees, and for customers.
  • Integrity – It is our brand, our reputation; who we are as people.
  • Excellence – We strive to become better, all the time. 
  • Leadership – in our fields of specialty, and in taking responsibility for our own lives.
  • Community – We stay closely connected to where we live and work.
  • Giving – We try to give something of ourselves to others.
  • Lifetime Learning – A value combining Growth and Education.

A few observations about the data:

  •  Education and Growth; both had a strong presence on our list, so we combined and included under Lifetime Learning, a reasonable consolidation of these two.
  • Happiness, Health, and Independence also scored high, so we acknowledge these in internal discussions, remembering that these values are 'Top 5' important to several of us.
  • The process of removing many values we hold dearly to get from 50 to 15, is a valuable exercise in itself, especially at the margins, with those closest to the cut-off.

This has become useful in much decision making:  We used to struggle with how to handle certain holidays, the day after Thanksgiving a typical example.  Recognizing how much we value family, the decision to close the day after Thanksgiving became easy, as this is a day when most of us can enjoy time with our families.  With Lifetime Learning a top value, we are quick to approve education expenses for all our employees, all year long.  Integrity keeps our brand strong, and helps us be more effective when negotiating with underwriters; because they trust us.  (Bonus: This one also helps us sleep at night.)

We found that this exercise provides guidance for many decisions; it's different for every organization.  But it's a terrific process to develop self-awareness and clarity for any organization.

Below is the list of 50 values we all used for starting this exercise:  

Accomplishment Education Helpfulness Popularity
Adventure Environment Honesty Privacy
Care Ethics Humor Recognition
Community Excellence Independence Respect
Competence Faith Integrity Security
Conviction Family Justice Solitude
Courage Freedom Knowledge Spirituality
Creativity Friendship Leadership Teamwork
Decisiveness Fun Leisure Accountability
Dependability Giving Lifetime Learning Variety
Diligence Growth Loyalty Wealth
Diversity Happiness Nurturing Work
  Health Order  

 

Tags: community, values, leadership

New Staff Additions and Farewells

Posted by Gordon Atlantic Staff

Thu, Dec 19, 2019 @ 03:38 PM

GA Christmas Party

We are excited to announce that Gordon Atlantic is growing! In 2019,  we made 5 new and excellent additions to our staff:

John Rennie

John joined our personal lines team with several years of experience in home, auto, and marine insurance here on the South Shore.  He focuses on developing more complicated personal insurance solutions.  A resident of Hanover, car enthusiast, who works at staying healthy and fit, John is easy to work with on any personal insurance need.

Julie Osborne

Julie began with the agency in 2019, having spent seven years with another local agency.  Her experience within the customer service industry makes her a terrific addition to our Personal Lines department.  Julie's knowledge, attention to detail, and calm attitude are attributes our customers appreciate while assisting with your insurance needs.

Melinda Ranous

Mindy also started here in 2019, having worked in both a small agency and a large national firm, and has  solid experience in a customer service,   Mindy works closely with customers to seek economical and appropriate personal insurance solutions.

Brian Jones

Brian comes from a corporate background creating and managing marketing solutions for some of the world’s largest retailers including Amazon and Walmart. Drawing from his years of business and SEO experience, he is leading Gordon Atlantic’s online marketing initiatives.

Alana White

Alana joined our agency as an administrative assistant and receptionist with an eye on a career in insurance. She is a quick learner and is already picking up the ins and outs of our complicated industry.

Jason Gordon

Congratulations to Jason Gordon for his promotion from personal to commercial lines.  Personal account wil miss Jason, but he's still here and advancing in the commercial insurance arena.

Best Wishes to our staff members who left this year

Toni, one of our commercial lines account managers, left our agency to pursue the opportunity of a lifetime in the fitness industry. Congratulations and good luck Toni!

Darcie retired earlier in 2019. Wishing you a long, healthy, and happy retirement!   Best wishes on your new chapter in life.

 

 

What is the ERM-14 form in Massachusetts?

Posted by Geoffrey Gordon

Tue, Sep 03, 2019 @ 03:44 PM

What is the ERM-14 form in Massachusetts?

The ERM-14 form is a form required by the Massachusetts Workers Compensation Board whenever there is a change in an entity’s name, structure or ownership.   The form discloses owners of an entity, such as members of an LLC, major shareholders (5% voting interest) or partners.  It is used whenever there is a change in ownership, including a sale or transfer of assets.

Download our fillable version of the ERM-14
picture of ERM-14

 

 

 

 

 

 

 

 

 

or download the form from the Commonwealth of MA here:
https://www.wcribma.org/mass/ToolsAndServices/UnderwritingToolsandForms/ApplicationsForms/MA_ERM_Form_2017.pdf

 

Why does the Workers Comp Board make you disclose all this?

Workers compensation insurance is one of the most sensitive lines of insurance to past experience.  Before this form was used, an owner of a company with a poor history of worker safety (and increasing workers compensation costs) could transfer assets of one company into another to start fresh, with no bad experience to increase those costs.  Particularly in higher risk industries, the difference in companies “experience modification factor” can have a significant impact on costs.  So transferring assets to another company to get a fresh start made sense, when this was legal.

The purpose of the ERM-14 form is to keep track of significant shareholders movement from entity to entity.  An officer from a high workers compensation experience modification factor (the mod) now may bring that high mod to his or her new company. 

How hard is it to fill out the form?

That depends on the simplicity or complexity of ownership., but we won’t sugar-coat it.  It’s intrusive and looks for lots of entity structure details that may be tedious to find.   One thing we do know: if an officer / shareholder of a company with bad workers comp experience becomes an officer / shareholder of another company, the experience may follow from one entity to another.

Aside from entity gymnastics, how else can a company reduce workers compensation costs?

Workers comp is the most experience-sensitive line of insurance.  At Gordon Atlantic we can project the impact of claims, or no claims, on future workers comp costs, providing a compelling economic message for instilling a culture of safety.  We work closely with companies on industry specific risk reduction and safety programs.  A safe workplace is a competitive workplace, because lower workers comp costs mean lower labor costs relative you your peers, which translate to pricing advantages.

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Tags: ERM-14, ERM-14 MA, ERM, ERM14, ERM-14 MA workers comp, ERM14 MA entity change

When does my builders risk coverage end?

Posted by Natalie DiCecca

Thu, Jul 11, 2019 @ 12:25 PM

Most insurance policies have a clear beginning and end date (also called the effective and expiration dates). Builder’s Risk coverage, however, can be different.  Builder’s Risk coverage is placed for construction operations to cover a building during the course of construction.  Built into the pricing is the changing value, recognizing that early in the project, a million dollar finished building has only $250,000 in it; as the project continues and more labor and materials are added, the value increases accordingly.   Unlike many other insurance policies, in addition to the effective dates, there are 5 other situations in which insurance coverage can end:

  1. The project is accepted by the purchaser

Often, the builder is responsible for the insurance – the builder’s risk policy - during construction.  Once the purchaser closes the deal with the builder, it becomes their responsibility.

  1. Insurable Interest ceases

Insurable interest is similar to and includes ownership as in the first example.  Other insurable interest could include debtors on the property, such as a bank.  When the bank changes, the former bank no longer has an ‘insurable interest’; if they’re holding the builder’s risk policy, someone else – with an insurable interest, such as a replacement bank - needs to place coverage.

  1. The project is abandoned without intent to complete

If the builder walks away from the project for whatever reason, the insurance company has an escape path too.   Abandoned buildings pose a greater risk for vandalism, arson and other problems, so insurance companies have a way to avoid these.  But people with remaining interests may need to place their own coverage if this happens.

  1. The project has been completed for 30 days

Once a occupancy permit or similar completion confirmation has been granted, a builder’s risk policy is no longer the right kind of insurance.  Either the building or the owner can place property coverage easily and usually less expensively, as a replacement.

  1. The covered property has been put to its intended use

Similar to completion example above, once construction is done and the building begins its intended use as a factory, retail or other operation, different insurance (property) makes more sense, and is often less expensive anyway. 

If any of the above applies, regardless of the dates on the policy, the builders risk coverage ceases.  There are always other ways to insure these properties, depending on the construction phase or new use.   If you have questions about your current builders risk policy, or need to obtain cost estimates for a new project, please contact us.

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Tags: commercial insurance, builders risk coverage, builders insruance

Did we accidentally void our crime policy?

Posted by Natalie DiCecca

Tue, Jul 09, 2019 @ 12:13 PM

Crime insurance policies, part of what is broadly known as fidelity coverage, include many kinds of theft, often of money, and can include theft by employees as well as external sources like burglary.  That means an employer can file a claim for loss of money, securities, or property resulting directly from theft committed by an employee – acting alone or in collusion with someone else.  However, policies won’t cover employees that committed a theft prior to a policy taking effect, and this provision may have ripple effects.  Here’s a tragic example:

John owns a small retail shop. In 2010, his employee Mary stole $100 from the register and John found out.  Mary confessed, paid John back, and promised never to do that again.  In 2019, Mary stole $10,000 of inventory over several months.  John fired Mary and reported the claim to his carrier.  The carrier denied the claim because John knew of the first theft, prior to the policy period, and decided to keep Mary on staff.  Crime policies include an exclusion for any employees who have stolen from the employer before.  On its face, this makes sense: insurance companies don’t want to provide financial backup for employees known to have stolen from their employers in the past.    By allowing Mary to remain employed, John unintentionally voided his crime policy for coverage to any future acts by Mary.

Exclusions are important details to know before placing insurance coverage so that management can take steps to mitigate losses that insurance won’t cover.  Mary should have been let go after the 2010 event, or certainly once John decided to buy crime coverage for employee theft.

If you have questions about your current crime policy, or want to discuss which business risks you want to insure, contact us.

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Tags: crime prevention, crime, employee theft, employee theft insurance

The top 5 insurance claims during summer months

Posted by Gordon Atlantic Staff

Thu, Jun 27, 2019 @ 09:26 AM

BBQ Grill Fires- Cooking out with friends and family can be a great time, but can turn catastrophic in an instant if you aren’t cautious. To reduce the risk of a cookout calamity, never place your grill near flammables and never leave it unattended. If using a charcoal grill, make sure the embers are completely extinguished before leaving it.

barbecue-bbq-beef-1105325

 

Boating Accidents- Owning a boat is a huge pleasure, but also a huge responsibility. Boating accidents increase during the summer months for obvious reasons, but what this means for you is that each time you get on the water, you run the risk of having a mechanical break down, collision with another boat, or hitting an object(s) or people. Before you hit the waters, make sure your boat is in good mechanical running order, reacquaint yourself on boat safety rules/regulations, AND make sure you have the adequate Massachusetts boat insurance protection that you need.

boat-boating-cap-209978

 

Car Accidents- Summertime travel plans typically involve spending more time on the road in your car. What this means is an increase in the number of auto accidents/incidents on the highways during the summer months. To increase your safety and reduce your risk to this type of exposure, make sure you stay on top of your car maintenance to avoid an overheated vehicle, tire blowout, or impact with another vehicle. Also, review your level of auto insurance coverage with your Florida independent insurance agent for your own safety and protection should you be involved in a car accident.

car-1149997_1920

 

Drownings- There is a direct correlation between the soaring temperature outside and the number of pool drownings. During the summer months, more people are swimming which can turn disastrous if certain precautions are not taken. If you are a pool owner, make sure your gates are always locked and inaccessible so that neighbors/kids cannot slip into your backyard and jump into the pool. Being the owner of a pool comes with a lot of accountability so make sure you do the responsible thing and have adequate Massachusetts homeowners insurance protection. Our independent insurance agency is here to assist you so that should a terrible accident like this happen, you will be adequately protected.

fun-1850709_1920

 

Home Burglary and Break-Ins- During the summer months, people tend to vacation more, leaving their homes unoccupied. An unoccupied home is a target for burglars and that is when break-ins are more likely to occur. You can reduce the risk of this happening to your home by following some easy tips, such as installing security alarm system, motion detection lights, and having neighbors collect any mail, newspapers or packages left at the door.

thief-1562699_1920

 

 

To discuss your exposure with an experienced professional at Gordon Atlantic Insurance, please call our office at (800)-649-3252.  If you have a quick question to pose, click below!HAVE A QUESTION?

Tags: home insurance, car insurance, boat insurance

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