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    Commercial Insurance Blog

    Lowering your Insurance Costs

    Posted by Val Feeney

    Thu, Jun 28, 2018 @ 11:55 AM

    Selling your product to a consumer is your forte. Selling the risk of your operations to underwriters is ours. Having done this for years, we know that establishing a coherent risk program before going to the insurance market can make a huge difference in your short term (insurance) and long term (labor and fleet costs, especially) risk costs .  

     

    manufacturing pic 

    Utilizing an independent insurance broker provides the manufacturing company with an expert advocate when purchasing property and liability insurance. Presenting what you do and how you do it through a risk lens can affect what carriers say "yes," the limits and types of coverage available to you, and of course price.  Here's how we do it...

    An in-person visit affords important information that is useful when negotiating with an underwriter. Walking through your plant and learning your company's history, as told from your lips, paints a narrative that can be shared. Experience gives us insight into what an underwriter will be looking for in terms of exposures, hazards, safety measures and employee training. Some areas risk professionals focus on are different from yours:  the year built, number of stories, construction material, the presence of a sprinkler system, and the roof type of and in your building; the square footage of your parking lot; your neighbors (no kidding); and the age and capacity of electrical systems will all affect an underwriter's appetite.

    Loss history on paper provides only numbers, no context. Knowing the circumstances behind losses and measures taken to minimize recurrence tell another story.  We love to talk about continuous improvement with underwriters.  Does your focus on continuous improvement include safety?

    Workers Compensation requires information about employee accidents. When we recommend training courses for staff, or filters for new hires, this can mean the difference between a "yes" and a "no" in terms of competitive carrier willingness to offer customized insurance.

    There are other factors common to risk in the manufacturing sector:

    Intellectual property including patents, formulas and designs has great value. Are these adequately protected?

    If you have a retail component, payment card information may include a data breach exposure. Data theft is a real thing and steps taken to protect yourself can mean the difference between moving on from a hack attempt and having to close your doors. Educating employees on confidential data, and establishing best practices with your IT partners, can drive down the cost of this risk substantially (for more, download our Cyber Whitepaper).

    Transporting your product and transporting your salespeople is another area to focus on. Running prospective employees' driving records under a "conditional offer" can help ensure fewer accidents, affecting both fleet and labor costs.

    Finally, you may have exposures to other risk such as service interruption or product recalls. Talking through your daily operations with us, along with any perceived vulnerabilities, allows us to tailor the most fitting coverage while simultaneously assuring the company underwriter you are a good risk.

    To discuss your business with a Gordon Atlantic Insurance professional, please call us toll free at 1-800-649-3252. Prefer to type versus talk? Use the form at the left of this blog.

    INSURANCE QUESTION?

     

    Tags: insurance, property insurance, insurance cost, general liability insurance, should I use an agent, risk program, selling, buying, manufacturing, cyber insurance

    What is a Waiver of Subrogation?

    Posted by Geoffrey Gordon

    Thu, Jun 07, 2018 @ 03:57 PM

    In one of our previous blogs, What is an Additional Insured?, we discussed additional insureds in contracting.   When subcontractors work for general contractors they need to show that they carry their own insurance so if something goes wrong, and sub’s insurance company will ultimately be paying first.   The GC will ask be an 'Additional Insured' to get coverage under the sub’s insurance program.   In addition, the general contractor will often require a 'Waiver of Subrogation' clause.  This waiver gives up rights of the subcontractor insurance program, so usually comes with a cost.  This is classic Contractual Risk Transfer at work.

    conditions-624911__340

    Often required by larger, mopre sophisticated contractors, the Waiver of Subrogation shifts costs on any event entirely to the subcontrtactor: regardless of fault.   Suppose an electrical subcontractor hired by a GC is hurt on a job site due to negligence of the hiring contractor.  Without a waiver in place, the worker's compensation company will demand reimbursement through the general contractor’s liability insurance in a process called Subrogation.  

    If a Waiver of Subrogation is in place, the electrician's insurer agrees NOT go after the GC's insurance, even if he's negligent, completely at fault.  The worker's compensation claim goes entirely on the electrician’s insurance history, increasing  the experience modification factor, and thus their future costs.   Nothing fair about that.

    But the general contractor has shifted that risk off his own program, onto the subcontractor's, in a tactic known broadly as contractual risk transfer.  Because your insurance company knows it can't recover against a responsible party, they commonly charge more when granted.   

    For a video on the topic that appears in BusinessTown, click to watch:.

    If you have a question regarding your own personal insurance circumstances, please call the Gordon Atlantic Insurance professionals toll free at 1-800-649-3252.  Prefer to type versus talk?  Use the form to the left of this blog for a return phone call or email.

    For other pertinent commercial insurance topics, check out our commercial insurance blog


    Geoff Gordon

    INSURANCE QUESTION?

    Tags: construction, commercial, insurance, Business, contractors, insurance waiver, waiver, subrogation, additional, insured, certificate

    Workers Compensation Audit Compliance

    Posted by Geoffrey Gordon

    Fri, May 11, 2018 @ 12:19 PM

    Your Workers Compensation insurance renews and you receive the letter informing you it's time for the prior term's audit.  

    Initial premium is based on estimated payroll.  At the end of the year the company needs to determine actual payroll, including casual labor and uninsured subcontractors. If the actual is less than the estimate you get a refund.  If the actual is greater than the estimate, you owe the difference. 
     
    Business Man Pic
    When you purchase Workers Compensation insurance, part of the agreement is they may audit your payroll to be sure it's accurate.  It may be a phone audit, a self-audit, or a physical on-site audit, (physical is required in Massachusetts at least every three years).

    Should you refuse, it's rough: the carrier issues a high "estimate" with premium due. If you do not pay the estimated additional, your policy gets cancelled and the Department of Industrial Accidents may issue a Stop Work Order. You may also have an uninsured loss and then have to pay for medical expenses and lost wages out of pocket, plus be subject to a fine.  

    To prepare for the audit try to have:

    • Payroll records
    • Federal 941 Tax Returns (most recent four quarters)
    • 1099 Tax Forms 
    • Federal Tax Return including Profit & Loss section (1040 Schedule C, etc.)
    • General ledger or checkbook
    • Certificates of Insurance from subcontractors

    You will receive a Final Audit Report from the carrier.  If money is owed and you disagree you can file a dispute. The payment due date will be suspended until the dispute is settled.  

    Here's a chalkboard video that summarizes all this:

     

     

    To discuss your Workers Compensation coverage with a Gordon Atlantic Insurance professional, call us toll free at 1-800-649-3252.  Prefer to type versus talk?  Use the form at the top left of this blog for a return phone call or email.

    Geoff Gordon

    INSURANCE QUESTION?

    Tags: commercial, workers compensation, insurance, Business, insurance audit, audit

    Massachusetts Potentially a Hotbed for New Marijuana Markets

    Posted by Jeff Helm

    Thu, Apr 05, 2018 @ 02:11 PM

     According to marijuana.com, there is a great deal of interest developing in the newly emerging Massachusetts Recreational Marijuana market.  Reportedly there are over 200 applications already in process for consideration by the Commonwealth's Cannabis Control Commission through their website

    Cannabis Pic

    Operators of medical dispensary operations that wish to expand into the recreational sales area may have priority certifications, having already passed through the stringent approval process.  Those with priority certification applied for licenses through April 16, 2018.  

    Applications for retail or cultivation licensing will be accepted later this spring. 

    Commercial sale of recreational marijuana in the state is expected to begin on July 1st following the initiative approved by voters in November of 2016.

    One of the business challenges in this new industry is paying for things.  Because marijuana is still a federally controlled substance, banks operating across state lines are severely limited in whom they can do business with.  This poses a risk of holding cash, especially large amounts of cash.  This challenge is felt along the entire vertical: growing, distributing, right down to retail sales.  Talk to Gordon Atlantic experts about ways to manage this risk, including insurance options.  

    To discuss risk management strategies for your business, including insurance, please call me toll free at (800) 649-3252.  Prefer to type versus talk?  Click below!

     
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     Jeff Helm Web Card A 2018-5
     
     

    Tags: commercial, insurance, Business, marijuana

    Claims Made Versus Occurrence Liability Form

    Posted by Geoffrey Gordon

    Wed, Aug 16, 2017 @ 02:48 PM

    A "claims made" policy treats the timing of a claim differently than the more commonly seen "occurrence" policy.

    Here's how it works.

    Suppose you have a policy that runs from January 1 to January 1. In November of the current policy year someone at your building slips on the steps, falls down and hurts themselves. You don't hear about it…until sometime the following spring when the demand from the injured person's lawyer reaches you. In this example the fall, meaning the actual "occurrence" that prompted the claim, happened in the first policy year, but the claim was filed in the second policy year. The more traditional "occurrence" policy would have the policy that was in effect when the incident happened defend the claim. A "claims made" policy would have the second policy term respond to the incident as this is when the lawsuit was actually made.

    claims made versus occurance liability

    History

    This newer approach was developed in response to lengthy time lags between claims occurring and insurance companies learning about them. This reached a crisis point in the 1970s with the explosion of asbestos and similar industrial or pollution related claims. When lawsuits drained policy limits, policy language gave access to previous years' policies as well. These piled-on claims were never contemplated in the pricing of the insurance; the industry needed a way to close the books on certain types of long tail liability. The solution was what we now call the "claims made" policy.

    Insurance companies prefer "claims made" policies so as to close their books on liabilities that have occurred but nobody knows about yet. These policies are most common with Professional Liability, some Products Liability, Employment Practices, Directors & Officers, and other specialty lines, particularly those with long "tails" or discovery periods. Read our blog describing tail coverage and prior acts HERE.

    There are many other factors that characterize these highly specialized policies; customizing a policy to meet your specific needs should not be taken lightly. Some of those features are highlighted on this comparison sheet.

    Prefer video?  

    To further discuss the ramifications of policy types and how they may impact your business, please contact the professionals at Gordon Atlantic Insurance at (781) 659-2262.  Questions?  Click the link below:

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    Tags: insurance, malpractice, professional liability, occurrence form, retro date, tail coverage, E&O

    Can Changing Your Legal Entity Status Affect Your Insurance?

    Posted by Geoffrey Gordon

    Fri, Jul 28, 2017 @ 11:16 AM

    Know how your legal entity status affects your commercial business insurance policy with andrew gordon incChanging the legal entity type of your business can affect your insurance, but changes affect different lines differently.  For most kinds of insurance, carriers will usually change the “named insured”  based on a request from the customer, provided there are no material changes in the scope of the operation.  If there are changes in the operation, such as change in management, ownership, or strategic direction, then a new policy is usually underwritten and rewritten. 

    Workers Compensation is one kind of insurance greatly affected, however. A change from proprietorship to corporation, or corporation to LLC, will result in material changes to this particular insurance line as the premium charged is a direct function of payroll.  In particular, owners’ payroll is fixed statutorily and differs for proprietorship, corporations, LLC's and partnerships. 

    Because the payroll amount of compensation in a corporation can be managed through distributions, deductions to qualified plans and other accounting practices, Workers Compensation assigns a minimum payroll of $10,920 and maximum of $55,120 annually for officers (with >25% ownership). Thus a corporate officer taking no payroll (and living only on distributions) will still be charged as though his or her payroll was $10,400.  Conversely, a corporate officer making $500,000 a year is capped at $52,000. Although included officers are automatically subject to this payroll floor and ceiling, owners with 25% or greater ownership may opt out. 

    Proprietorship is different. Unlike corporations where corporate officers are included by default, proprietorship excludes owners by default. As with the option of corporate officer opt-out, proprietors may opt in. When this is the case, their payroll is statutorily set at $47,000 (as of October 2017 and subject to change). Partners in partnerships and members in LLC's are treated the same as proprietors for Workers Compensation purposes; they are excluded by default but may opt in.

    Why opt in? The most important reason is you’re covered! If you get hurt at work the policy will pay medical expenses and lost wages. Why opt out? To keep workers compensation costs low.

    Some contractors will require that their subcontractors include owners on their workers comp insurance policy. The purpose of this is to prevent payments to these contractors from being charged to the general contractor’s payroll. To make the distinction clear, Certificates of workers compensation insurance usually state in the comments section whether owners are included or excluded.  

    Businesses are dynamic and changes to corporate structure are one of many changes that businesses experience. If you are contemplating a change in business entity structure, have your attorney and your insurance agent or risk partner collaborate on how this might affect your risk and insurance program. To discuss your situation, call one of the professionals at Gordon Atlantic Insurance toll free at 800-649-3252.  Prefer to type instead of talk?  Submit your question below.

     

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    Geoff Gordon

    Tags: commercial, comp, workers, compensation, legal, insurance, Business, proprietorship, entity, status

    Business Owners: Consider Google

    Posted by Gordon Atlantic Insurance

    Sun, Jan 22, 2017 @ 09:00 AM

    As social media engineer, I spend most of my time on the internet where I run into lots of great tools. Lately, I’ve become a bit of a Google addict. Now, most computer users are familiar with Google’s incredible search engine, but are unaware of the whole host of formidably effective tools that Google offers FREE. Google’s innovations have been so useful to me; I decided to write about them.

    Business owners should operate with google and commercial insurance from andrew gordon inc

    Google Chrome:

    I’ll start with the big guy. Most PC users use Internet Explorer for web browsing …I’m so sorry. As someone who dealt with the frustrations of IE for many years before switching to Firefox and then Chrome, I can highly recommend Chrome as a replacement. Google Chrome is lightweight, offers fast web browsing that works seamlessly with Google applications and offers applications for download. It also feels incredibly intuitive to use; you could download it today and wouldn’t notice a huge difference from Internet Explorer, but deal without whatever problems and bugs are plaguing the latest version of IE.

    Google Documents:

    My personal favorite. The idea is that you can store and edit your documents through Google, which is incredibly useful for business:

    • The documents can be retrieved from any computer with internet, and can be categorized into folders like your documents on your hard drive.
    • Where Gdocs hit it out of the park is with sharing your documents. You can choose to give anyone else with a Google Account rights to view and/or edit your document. You can even have multiple people working on a document AT THE SAME TIME. For real.
    • You can save documents in a wide variety of formats, including PDF or HTML
    • You can upload your Microsoft Word documents straight to Google Docs
    • Let’s say you’re working on a group project, and after editing a document for weeks, you decide your version that you had last month was better. Good thing GDocs allows you to access the complete revision history of the document, and recall it from any of its previous stages
    • Everything that I said above also works with PowerPoint presentations and Excel spreadsheets that you’re familiar with in Excel are available for use in Google though their spreadsheet function.

    Google Calendar:

    Another incredible feature. You can create an online calendar of your tasks and events, which can also be shared with anyone else with a Google Account. You can also create several color coded calendars to organize your events. It can even send you notifications through email or to your smartphone. I’ve used Google Calendar to organize my life for about a year now. When someone asks me for my availability, I just email them a screenshot of my week, print out a copy for their desk, or share it with them directly. I can even choose to only share my work schedule with them so they don’t know that I marked the Mythbusters marathon for watching!

    gmail good for businesses, wikipediaGoogle Mail:

    I’m not going to spend any time raving about Google Mail, but I would urge you to at least check it out. It’s just as great as the other tools and just as free.

     

    Google Reader:

    For those of you who manually check your favorite blogs and websites, join the 21st century and open a Google reader account. You can add the RSS feeds of your favorite blogs and websites and receive all your updates in one user-friendly application. I used to read the newspaper, but now read my news feed. It’s like my own customizable news feed from my favorite columnists, authors, and bloggers.

    Google+:

    This is Google’s new social media system, still in beta. Getting an invite is tough right now, but if you’re in, you’ll notice that it’s an upscale, cleaner Facebook. Instead of having 768 friends that see everything you do, you put your friends into circles then publish each post only to the circles that you select. This is so my family doesn’t have to see my school-related posts, and effectively eliminates the awkward 60-year-old-aunt-flora-commenting-on-every-status-you-post syndrome. Facebook does offer these tools as well, but they’re little used and frankly, Google just does it better. Google plus also offers group video chat and the ability to separate your news streams by your circles which is refreshing. Again, Facebook does offer a similar service, but it takes some headache to put in place. G+ also includes a feature called Google Sparks, which partners with Google’s search engine to match your interests with random content from the internet that it thinks you’ll like; it’s usually right. Basically, while it still has some catching on to do, Google plus represents a cleaner version of Facebook paired with the brute functionality of Skype and the addictive nature of StumbleUpon. If you can, check out Google plus.

    What’s really cool is that if you choose to use all of these Google services, you can manage almost everything important though Google. I rarely have to open external programs anymore. Google does it all.

    Tip of the Hat,

    CF

     

    Corbin Foucart. Andrew G. Gordon Insurance

    INSURANCE QUESTION?

    Tags: commercial, gmail, Google, chrome, calendar, plus, documents, docs, bussineses, consider, insurance, Business

    Business Fleets: How GPS Technology can Lower your Costs

    Posted by Gordon Atlantic Insurance

    Fri, Jan 20, 2017 @ 09:42 AM

    Keep track of your companys cars with commercial insurance from andrew gordon incWouldn’t it be great if you could watch your entire fleet of vehicles from 20,000 feet in the air? You could verify that workers are where they say they are, make sure they aren’t speeding, stop extensive idling, help a dispatcher identify location during urgent calls, or even find the most efficient route for a company vehicle to travel during a job.

    Well, technology that used to be affordable only for big corporations is now not only available but economical for fleets as small as five vehicles, right here in the Boston area.

    We recently saw a demonstration from Boston Global Tracking, a new local business dedicated to helping other businesses keep track of their vehicles. We don’t have any kind of interest in this company other than liking what they do, so our endorsement is based entirely on what we’ve seen, and how we think it can help you control your fleet.

    The simplicity behind the technology is ingenious. The same GPS that many drivers already use to find directions can be monitored through the internet at any given time, providing you not only with precise vehicular location, but also with information like speed and trip information. Furthermore, improvements in GPS technology allow the devices to be implanted in the key of a company car, which eliminates any possibility of tampering.

    This kind of a system often results in behavioral change without even having to discipline anyone. The value of better driving and fewer accidents are impossible to specifically quantify, but control over other things outlined above (such as eliminating lengthy idling), are.

    For a quote on your auto fleet, click here:

    Business Quote

     

    For answers to any of your insurance questions, click here to get a quick response from one of our insurance professionals:

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    Corbin Foucart

    Tags: commercial, insurance, Business, Boston, fleet, gps, global tracking, driving

    Liability Tips for Information Technology Professionals

    Posted by Geoffrey Gordon

    Fri, Jan 13, 2017 @ 01:00 PM

    Network Administrators and Managed Services Providers help businesses function at the speed of light.  But other businesses are out there testing how to penetrate firewalls or otherwise gain access to valuable information that can be readily resold on the dark web.

    If a penetration is successful, and ransom ware is installed, or accounts compromised, or worst case of all, private data released to the public, will the client hold the service provider responsible?

    It depends on the amount of damages, for one.  Professional services by IT professionals are similar to other professionals:  if an error or omission causes the client harm and they sue, well there's insurance for that. Liability tips for Information Technology Professionals

    A hot area of insurance today is Cyber Liability:  the insurance that protects the company for the financial expense of a hack.  As outlined above, it should include protection for ransomware, data theft, release of "personally identifiable data," and may include coverage for regulatory fines such as those called for in 201 CMR-17 here in Massachusetts.

    For IT professionals who watch over these business systems, Professional Liability and Cyber Liability really are one and the same.

    Fortunately, custom insurance products have been developed that recognize this crossover of threats, interests and damages. 

    What's an IT company to do to keep the Professional Liability insurance costs low?  Begin with a good service contract.  This is part of a broad risk control technique known as "Contractual Risk Transfer" (video).  Contractual Risk Transfer is a fancy way of saying we're transferring the risk back to the client, and enforcing this with a contract.

    Another step is to have documented steps for all service personnel.  This facilitates billing the customer (if hourly based), and provides an added measure of defense in case it's alleged that someone simply skipped an important task.

    Finally, good communication with the client, both written in the contract and expressed verbally, that supplied services imply no guarantee of safety from the powerful forces trying to steal information from servers you protect.  The best defense could in fact be recommending that every customer with data of any value consider their own liability insurance. Because even if you do have Cyber coverage, you don't want to be the only party in the room who does.

    To discuss further, please call the insurance professionals at Gordon Atlantic Insurance at (800) 649-3252.  To pose a question or request a quote, click below.

     HAVE A QUESTION?REQUEST A QUOTE

    Cyber Liability  Guide 

    Tags: IT, insurance, liability, Cyber Liability, personal information protection

    What is a Package Policy?

    Posted by Geoffrey Gordon

    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 coverage. The most common Package Policy combines property coverage, such as for buildings or business contents, with liability coverage, 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 Businessowners Policy (BOP) is the most common and broadest 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 a BOP.

    Two coverages included in a BOP 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 this coverage also needs to be rated specifically. 

    The advantage to a non-BOP Package Policy is that you only need to purchase coverage relevant to your needs. A Businessowners Policy includes many coverages that may not be relevant to your exposure, or could be necessary but reflect unanticipated needs.

    Certain lines are very rarely included under a Package Policy, most commonly Workers Compensation and Automobile or Fleet insurance.  These generally stay as separate policies because of their highly regulated nature and their disparate underwriting considerations.

    To find out more about what which Package Policy is right for you, call the insurance professionals at Gordon Atlantic toll free at (800) 649-3252.  Prefer to type instead of talk?  Click below.

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

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