You have a small fire that destroys $20,000 of case goods and the insurance company settles the claim for only a fraction of the $20,000.  Mad, of course you are, and how did this happen?  Property insurance policies have a little known clause that can penalize a client when they have a loss, Co-Insurance. 

Co-insurance is designed to require the insured to properly value their buildings and contents, generally for full replacement cost, and not underinsure to save premiums. Typically the insured values must be 80% or 90% of the true replacement cost or a penalty applies to any loss.  Co-insurance applies to most all property policies; business and personal insurance.

You did not know you were underinsured as you were asked what the value of your stock was and at the time it was only about $10,000, a guestimate at best.  Stock values go up and down all the time, so how do you get the correct value for your insurance policy?   Set the value at the highest value you expect to have, add an endorsements that allows for seasonal fluctuations and look for an insurance policy that does not have a Co-insurance penalty.

 Give us a call if you would like to learn more. 

Many winery owners have an insurance policy that does not adequately cover all their exposures. Do you have coverage for equipment breakdown? Wine Contamination? Property in Transit? Wine Leakage?

For a Second Opinion on Your Insurance Give us a call. We would be more than happy to review your current coverage with you.

   Many vineyard owners don’t carry crop insurance to protect against flood, drought, insects, hail, or disease. All of which are very common natural hazards that can literally disrupt your entire harvest, resulting in lost revenue. Crop insurance is not part of your normal insurance policy; rather it is a separate coverage. There are two kinds of crop insurance, Crop-Hail insurance offered by private sectors and Multi-peril crop insurance backed by the Federal Crop Insurance Corporation. Crop-Hail insurance can be purchased anytime during the year; however Multi-peril crop insurance must be purchased prior to planting, as this policy will extend coverage for drought, excessive moisture, hail, freezing, etc. According to the National Crop Insurance Services, “More than 80% of insurable farmland in the United States is now protected through the federal crop insurance program.” Are you part of that 80%?

If you think your chances of being sued by any of your employees are one in a million…think again.  The chances are far greater than you think.  Even an organization with good human resources, and sound policies and procedures, can be sued.  The cost of defending such claims can be enormous.  It is not uncommon for legal fees to exceed $250,000 to defend and win such a case.  The national jury-award median for employment practice liability was $200,000 in 2006.

The areas of exposure for Employers are:

1. Hiring
2. Supervision/management of employees
3. Termination of employees
4. Administration of Benefits

Components of Employment Practices & Discrimination Liability:

1. Discrimination (Compensation, hiring and promotion, everyday activities)
2. Sexual Harassment
3. Wrongful Termination
4. Employment Benefits (Denial of benefits, conflicts of interest, imprudent investing)

Claim Scenarios

National Origin Discrimination-$250,000

An employee sued a company for national origin discrimination in violation of Title VII, which prohibits employment discrimination based on race, color, religion, sex and national origin.  The employee alleged that he was wrongfully terminated when he complained to his supervisors that co-workers had made disparaging remarks relating to his ethnic background.  The plaintiff was awarded $250,000 in damages.

Third Party Sexual Harassment-$100,000

Two employees of the company made inappropriate comments about the physical appearance of a female freelance contractor working on the premises.  The contractor filed a claim against the company for third party sexual harassment.  The suit was settled for $100,000.

Discrimination and Retaliation-$317,000

A plaintiff alleged that the insured discriminated against him on the basis of his age and disability.  The plaintiff further alleged that he was terminated in retaliation for filing a workers compensation claim and for complaining about discrimination.  The defendant contended that the plaintiff was not able to perform the essential functions of the job and that he was discharged for legitimate non-discriminatory and non-retaliatory reasons.  The insurance company spent more than $175,000 defending the case and paid $142,000 in settlement costs.

FLASH REPORT!

Workers' Comp Carriers' Profitability An Issue At Commissioner's Rate Hearing

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Speakers at Insurance Commissioner Steve Poizner's pure premium rate hearing yesterday questioned the Workers' Compensation Insurance Rating Bureau's (WCIRB) conclusion that workers' comp carriers in California need a 27.7% increase in the state's workers' comp claims cost benchmark. Testifying on behalf of Compline and its broker members, J Dale Debber presented an independent analysis disputing WCIRB's conclusion that the industry lost $1.5 billion on its California book last year, as well as many of its other presentations. Workers' Comp Executive covered the meeting with its mobile camera crew. Click here to watch the action.

Copyright 2010 Providence Publications, LLC. All Rights Reserved. The Workers' Comp Executive may be forwarded, copied or distributed subject to the following conditions: (1) The full report including text, graphics and links must be copied without modification and all pages must be included; (2) All copies must contain Providence Publications copyright notice; (3) This document may not be distributed for profit."

Most winery insurance programs include “Leakage”.  However all policies are not alike and coverage differences can cause a major uninsured loss.  The primary cause of loss of wine from a tank is employee error.  Make sure that this is a covered cause of loss, especially this year with the late harvest and shortened crush period. 

Errors do happen.  Does your policy cover manufacturer’s defects?  Most policies do not so if you lose a tank it may not be covered.  Take a look at the policy and make sure you have the proper coverage.

Workers Compensation

 29.6% Rate Increase Recommended!

Workers' Compensation Insurance Rating Bureau of California decided to file its largest ever recommended increase in the workers' comp pure premium rate; 29.6%

 Don’t expect your Workers’ Compensation premium to increase by that amount, but do expect that the insurance carriers writing this coverage will increase rates, withdraw from the California market or reduce what they write.  Many carriers tend to file for a 4-8% increase. Change is coming.

 Insurance carrier loss ratios are high and getting higher.  This is caused by the cost of medical care, increased claim numbers and the recession.  This along with changes in how Experience Modifications are calculated and new case law are forcing the insurance companies to reevaluate their rates and what they are willing to insure.

Now is a good time to review this coverage.  Give us a call!  We have markets that will be here for the long term.

Wineries and Vineyards today, like most other businesses, are more dependant then ever on highly complex and fragile equipment and systems to maintain operations. Because of the dependence on this technology a breakdown at any part of the operation can cause down time and delays and perhaps damage the wine making process and possibly loss of revenue.

While equipment and systems are covered by the standard fire policy for fire and other perils they are not covered for breakdown. All businesses need equipment breakdown insurance as part of their risk management program. This insurance protects:

1. Electrical Panels, Motors and other Electrical Driven Devices
2. Air Conditioning and Refrigeration (cooling jackets)
3. Boilers or Pressure Vessels
4. Computers and Communication Equipment
5. Mechanical Equipment

Mark MacGougan, assistant vice president of the Hartford Steam Boiler Inspection and Insurance Company states that Equipment Breakdown Insurance is like your companies Health and disability insurance for your equipment. If there is an accident this policy provides coverage including loss or income.

Wear and tear and software issues are not covered; there must be some sort of accident to hardware or equipment. A power surge that damages a computer system or destroys an electrical panel is an accident as is a part breaking unexpectedly in a piece of equipment.

An example of an accident that should be covered by Equipment Breakdown Insurance is a power surge that damages the control panel or causes the need for an electrician to reset the equipment or replace fuses for critical equipment. Many times these accidents are just considered maintenance and paid for by the insured, not the insurance carrier. It pays to ask if something is covered or just wear and tear.