No business wants to think about having a loss. In fact, in a recent client meeting, I was asked the question “why should I even insure that property, I don’t care if I have a loss; in fact, I wouldn’t even rebuild if it were destroyed.” No doubt, the client was surprised when I responded by saying “if you’re not going to rebuild after a loss, then it’s a waste of money to insure the property.”
The fact is, there’s no point purchasing insurance for anything – a house, a business, equipment, etc. – if you have no desire to replace the property if it’s damaged or destroyed. But for most of us, we do want to protect our assets – our house, business, equipment, etc. – so we want to know about our options for protecting all that’s important to us. In my opinion, one of the most important coverage options business owners should consider is business income and extra expense coverage. But this coverage, like most insurance options available, won’t be necessary for every business.
If your business suffers a major disaster that interrupts normal business operations, what effect will it have on your business over the long term? Will you be able to retain customers? Will you lose valuable employees? Alternatively, does your business allow you the flexibility to operate from a different location with equipment that is easily acquired? The answers to these questions allow a business owner to determine whether business income coverage, extra expense insurance or a combination of both, are needed.
Businesses, especially those offering a service that can easily be replaced by another business, may face permanent loss of customers if business is interrupted for an extended period of time.
Businesses whose operations depend more on employees than on location may not have a serious threat of income loss, since they can continue operating from a temporary location preserving income flow. However, operating from a temporary location and expediting delivery of replacement supplies and equipment can add up to a considerable extra expense. Additional advertising may also be necessary to let people know you aren’t out of business. In many cases, a business may need both business income coverage and extra expense coverage.
The promise of extra expense coverage is to pay the actual and necessary extra expenses needed to continue operations, which would not have been incurred if there had not been a direct physical loss to the business. The period of restoration begins on the date of loss and ends when the property should be repaired, if reasonable speed is applied while returning the property to its pre-loss condition. Interference by building ordinance, zoning law or environmental protection law does not extend the period of time when extra expenses are payable. The period of restoration is based on the period of time during which repairs should be completed. The expiration of the policy has no bearing on this period of time.
Like nearly all insurance options, business income and extra expense coverage is not a one-size-fits-all item. A business must first determine whether they have an exposure and if so, what limit of coverage is appropriate to best protect the income for their business. Make sure you’re having this conversation with your insurance advisor… assuming you want to protect the income your business earns.
Think about this, how much time and effort do you spend researching different vehicles when you’re in the market for a new car? If you’re like me, it’s probably quite a few hours over the course of several days or even weeks. After all, a new car is a major decision and not just financially, but also from a safety perspective.
Now consider how much time and attention you devote to reviewing your insurance protection. It’s probably not a process that lasts for weeks… or days… or if we’re being honest, it might not even take a few hours of your time, right? It’s scary when you think about how much time we spend considering all the various options on a vehicle we’re looking to purchase, but we don’t even spend a fraction of that amount of time to ensure we’re protected from a financial catastrophe such as a lawsuit.
Why, you ask? There are numerous reasons we’ve heard over the years, but in my opinion, it’s because insurance is just plain confusing. The fact is, insurance policies are legal contracts. They’re drafted by teams of lawyers and are often left to the lawyers to interpret when a questionable claim occurs. So who wants to dive head first into this world of technical, legal language? Answer: WE DO! Because we care, deeply, about our clients and protecting all that’s important to them.
In addition to helping clients understand why certain policies and coverage options might be vitally important to their family, we also want to help clients understand the "why" behind our recommendations. To that end, we’ve identified four of the most common insurance myths:
Myth #1: All insurance policies and companies are basically the same.
Truth: While many insurance policies contain similar coverages, each company provides unique coverages and limitations. Policies that look alike can be changed by a single exclusion or endorsement.
Insurance companies also vary in the financial strength that backs your policy, which is a rating on their ability to meet their obligations – essentially, it represents their ability to pay claims for which they’ve promised in their contract. This is precisely why you need to look for an insurance company that is financially strong.
Myth #2: No one cares if I understand my insurance or if I get value from it.
Don’t feel forced to choose large, impersonal or unresponsive companies simply because they are spending billions (yes, I said billions) on their advertising campaigns. Independent insurance agents make a living by knowing which companies act responsibly and which policies are best for your needs.
Being an independent agency, we feel that each client is unique, and has individual needs and desires. We believe it’s our responsibility to structure a policy that meets your specific needs and desires, versus requiring you to accept the limitations of the standard policy offered by a huge, heavily advertised national insurance company.
Myth #3: I’m just going to have to jump through hoops and fight when I have a claim.
The State Department of Insurance can tell you which companies have the fewest complaints, and which companies resolve those complaints effectively. Some companies specialize in excellent claim service. They might not be the companies you see constantly advertising because they’re more focused on providing this excellent claim service to their policyholders. Again, another reason to work with an independent agent because we can help you choose the company that offers the right mix of a fair premium, quality products and excellent claim service.
Myth #4: I have no control over my premiums.
In today’s insurance world, nearly all companies have hundreds of factors used to determine the premium you pay. Some of these factors you can control (deductible, packaging your policies, eliminating duplicate coverage), some you can’t (your age, gender, the number of claims in your geographic area).
When you work with an independent agent, we can help you pinpoint these areas where you have control and advise you on how minor changes to your policies or even your lifestyle can help you better control your insurance costs.
Hopefully dispelling these common myths will help you with your future insurance decisions. The licensed advisors at Hill & Hamilton stand ready to help you with these important decisions to protect yourself, your family and your business.
Do you think a flood could never happen to you? Are you saying to yourself “I don’t live in a flood zone”? Guess what? Everyone lives in a flood zone. It’s just a question of whether you live in a low-risk area or a high-risk area. And consider this: while flood insurance is required for those living in a high-risk area, people outside of high-risk areas file over 20% of flood claims.
Here are the most common myths we hear when discussing flood insurance with our clients:
I already have homeowners insurance so I’m covered.
Homeowners insurance does not cover damage caused by a flood. However, it does cover fires. Now consider this, in a high-risk area, your home is more than twice as likely to be damaged by a flood as by a fire.
Why pay for flood insurance when disaster assistance is offered after a flood?
Not necessarily the case. Disaster assistance is available only when the president declares a disaster, and even then, disaster assistance is usually a loan that you repay… with interest! For a $50,000 loan at 4% interest, your payment would be around $2,880 per year for 30 years, IN ADDITION to your mortgage loan that you still owe on the damaged property. PLUS, you would need to buy and maintain flood insurance for the life of the loan.
I live on a hill so I’m not at risk.
If you live on a hill or in an area that has never been flooded, your risk may be significantly reduced, but it’s not eliminated. Aside from major storms, flooding can be caused by heavy rains, melting snow, and inadequate or clogged drainage systems.
Flood insurance is too expensive.
The average flood insurance premium is about $600 per year – $50 a month. If you live in a low-risk area, you may qualify for a Preferred Risk Policy with a premium starting at $129 per year. Considering that even a few inches of water can cause tens of thousands of dollars in damage, the annual premium can be well worth the financial protection it provides.
In fact, the greatest expense could very well be not having flood insurance when you need it.
My area has never flooded so I’m sure a flood won’t affect me.
The fact that a flood has not occurred recently doesn’t mean one has not happened in the past or that one will not happen in the future. Flood history is just one element used in determining flood risk. Other factors include rainfall data, topography, wind velocity and building development in your area.
Flood insurance does not cover contents in my basement.
Contrary to what many believe, flood insurance does provide limited basement coverage. Though it does not cover finished walls, floors or ceilings, or personal belongings, it does cover structural elements, essential equipment and other basic items normally located in basements. Imagine the costs associated with replacing the items listed below:
- Furnaces, water heaters, air conditioners and heat pumps
- Electrical junction and circuit breaker boxes and required utility connections
- Unpainted drywalls and drywall ceilings, including fiberglass insulation
- Foundation elements and structural support equipment
- Sump pumps
- Well water tanks and pumps, cisterns, and the water in them
- Oil tanks and the oil in them, and natural gas tanks and the gas in them
- Pumps and tanks used in conjunction with solar energy
- Stairways and staircases
- Freezers & food contained in them
Adding flood insurance to your protection portfolio is simple, just give us a call or submit your information here. It’s important to remember though, flood insurance policies have a 30-day waiting period from the time you apply and pay for your policy so if you’re thinking of waiting until the storm is approaching to buy your policy, it’s likely too late! Don’t wait until after the storm warnings to buy flood insurance.
Consulting firm Javelin Strategies and Research reports more than 11 million people are affected by identity theft each year, at a cost of $54 billion to the victims. In trying to deal with this threat, the insurance industry has developed products to help a policyholder recover from this kind of loss.
The monetary loss is not the only issue with identity theft. A victim can spend thousands of dollars and hundreds of hours trying to clean up credit records due to the thief using personal information to obtain credit with no intention of repayment, thus destroying the victim’s financial reputation. Identity theft insurance protection is designed to help you with this problem by covering expenses and sometimes professional services that will help the victim recover from this type of loss.
Even with coverage provided, following simple steps can help protect you from this threat:
Shredding documents. Anything that contains sensitive information absolutely must be destroyed. There are specific documents that must always find their way to the shredder.
- Old Tax Returns. Unless the IRS suspects you of fraud in your tax filings, you are usually only exposed to the threat of an audit for three years at a time. The National Endowment for Financial Education advises you to keep three to four years of tax returns, and shred anything older. Your tax return contains sensitive information, primarily social security numbers.
- Bank Statements. Anything with bank account numbers should be shredded, including paper bank statements.
- Credit Card Offers. These offers should go from the mailbox directly to the shredder, unless you are actually going to take the bank up on its offer. A lot of identity theft happens within families, so don’t leave these offers laying around.
- Old Photo IDs. These IDs contain information, which by itself is probably not enough to be damaging, but used with other information could help perpetrate a fraud.
- Pay Stubs. Absolutely shred your pay stubs. Some financial institutions will ask you (or the identity thief) the amount of your last deposit to use as a validation. A past pay stub can give that information.
- Credit Card Convenience Checks. The most dangerous things you can receive in your mailbox are convenience checks often sent with your credit card bill. These represent a live loan to whoever holds this check. Shred these immediately.
- Canceled Checks. Canceled checks contain not only your account and routing numbers, but also your address and possibly your phone number. People often include their full account or credit card number in the memo section when paying with a check. Do your duplicate checks display your account and routing numbers? Don’t overlook those carbon copies.
Prevention of identity theft is the obvious goal, but if you desire that extra peace-of-mind, let us know and we’ll make sure Identity Theft Coverage is included on your policy.
In honor of this vitally important month, I want to share an inspiring story with you. It’s about a member of our H&H family, Marilyn Springs, who has been with us for over 20 years.
Many of you reading this know her, and for that, you are fortunate. If you don’t know Marilyn, by the end of this article, you will have a better sense of her determination, her toughness and her character.
Throughout her tenure at H&H, the service Marilyn has provided to her clients has been unparalleled. She’s extremely knowledgeable in her profession offering sound advice to clients. She’s also compassionate and understanding when clients are facing unfortunate circumstances. Marilyn is the one so many look to, not just in our office, but in our entire industry, for advice, guidance and support. To say she means the world to us does not begin to describe how important Marilyn Springs is to our H&H family.
In early 2012, we received the tragic news that Marilyn had been diagnosed with breast cancer. We were all devastated, but we did our best to remain positive. We knew Marilyn would approach this fight with the same level of determination she brings to our office each day. And fight she has.
The schedule of chemotherapy, radiation and follow-up appointments she endured for more than a year was brutal to say the least. But she never gave up. She even remained fiercely committed to her career. In fact, her dedication to her clients and her colleagues here at H&H was apparent from the beginning of her battle.
When Marilyn had the option to set her chemo and radiation schedule, she opted for the earliest appointment available. She would be on the road to Columbus before 6:00 a.m., receive her treatment and as long as the cancer center was on time, she would return to work around lunch time. This went on for months. Through feelings of extreme fatigue and nausea, sadness and at times hopelessness, Marilyn never missed one day of work. How’s that for toughness?
Within days of learning about Marilyn’s condition, I was asked to make a donation to help fund breast cancer research. The individual requesting this donation had no idea the news I’d learned about just days before. It was one of those coincidences that looking back, could not have been a coincidence. In return for my donation, I was given this pink bracelet that has not left my wrist since that day. It began as my small way of supporting Marilyn, but as months of treatment piled up and I could see first-hand the struggles she was facing, it became a reminder that no matter what challenge I encountered in my life, it paled in comparison to the fight she had each day.
Without ever knowing, or even setting out to do so, she taught each of us incredible life lessons through her remarkable example. We’re extremely happy and blessed to share that Marilyn was recently given an optimistic outlook from her oncologist. While we can never be certain about what the future holds, we’re incredibly thankful that for the time being, Marilyn is doing well. She has returned to her normal routine here at H&H, and mostly normal day-to-day activities with one major exception: she recently became a grandma to a beautiful little girl, Norah.
If this is the first you’ve heard about Marilyn’s incredible story, don’t be surprised. She’s a very private person and did not want her condition to affect her work. In fact, it took a fair amount of convincing before she agreed to have us tell you her story. According to Marilyn, she’s no different than anyone else fighting this battle. From the perspective of those of us that feel blessed to work with her, we believed it was an inspiring story worth sharing, and perhaps could provide hope to those facing similar situations.
From the beginning of her fight, it’s been Marilyn’s preference that no one treat her any different than they did before. That feeling remains to this day so if you speak to Marilyn, feel free to share in the happiness of where she is today. However, don’t expect her to indulge in conversations about her tough road or the obstacles she still faces… it’s not her style.
With Cyber, Security & Privacy threats proving more and more prevalent everyday, can you really afford not to have this crucial insurance coverage?
Ponemon Institute: 2011 Cost of Data Breach Study
Verizon: 2012 Data Breach Investigations Report
In addition to the Ponemon Institute's study, Verizon has just released their own investigative report on data breaches, with assistance from the Australian Federal Police, Dutch National High Tech Crime Unit, Irish Reporting and Information Security Service, Police Central e-Crime Unit, and the United States Secret Service. This report confirms many of the Cyber, Security & Privacy professional's worst fears. Cyber, Security & Privacy threats are an international problem; those who commit these crimes are actively seeking out susceptible targets. Are you doing everything you can to protect your business from the never ending barrage of Cyber, Security & Privacy threats? If not, we suggest you consider a Privacy & Information Security Policy.
Realizing that Cyber, Security & Privacy was only going to become more and more prevalent in the digital world in which we find ourselves today, we stand ready to help you transfer your risk of loss with a specific insurance policy tailored to your needs.
April 12, 2013
The National Association of Professional Insurance Agents (PIA) announced today that Matt Simon, Insurance Advisor with Hill & Hamilton Insurance, is the recipient of its
prestigious Young Agent of the Year award. Each year, PIA honors one outstanding young insurance agent in the United States for his or her professionalism, achievement and contributions to the insurance industry.
Matt has worked in the insurance industry full time since 2004. He began his career with a regional insurance company headquartered in Columbus, Ohio before joining the team at Hill & Hamilton. Talk with Matt for just a few minutes and you get a sense of just how passionate he is about continuing the success of the agency that’s been around since 1920, while leading not just his business, but also the independent insurance agency system, into the 21st century.
“I believe as Professional Insurance Agents, it’s not just our job but more importantly, our responsibility, to educate our clients on the importance of their insurance protection. As consumers are increasingly bombarded with advertising that encourages them to base their insurance buying decisions solely on the price of the coverage, I feel even more obligated to advise my clients on exactly what they’re purchasing. At the end of the day, if you don’t have the coverage you need for a devastating claim, it doesn’t really matter what you paid,” Matt says.
Throughout his years with Hill & Hamilton, Matt has worked to instill a culture focused on doing what’s right for clients… a philosophy that’s been the foundation of the agency since its founding. Industry colleague and President of Securance Service Inc. Dan Henry said “I have worked with Matt on many occasions and have always come away from my interactions with him feeling that we are going to be in VERY good hands in the future under his leadership.”
When asked about being honored with the National Young Insurance Professional of the Year Award, Matt was quick to point out that it’s recognition of all his agency associates. “I’m absolutely thrilled to be recognized as the Young Agent of the Year, but it’s really a reflection of the people I work with. If I wasn’t surrounded by the talented, experienced and hard-working associates that I’m blessed to work with, I certainly wouldn’t have been in a position to win this award.”
Matt was presented with his award in Arlington, Virginia today during the Professional Insurance Agents National Awards Luncheon and in typical fashion, was on the phone with a client helping handle an issue within an hour of his acceptance speech. Matt’s clients have always been his top priority and nothing appears to be altering his philosophy… even his national notoriety!
Nobody lives forever. This is one of the hard and fast truths in life. If you have others who depend on you for support, this issue becomes especially important. Have you considered talking with your insurance advisor about looking into the various options for the best coverage and premiums available to protect those that depend on you?
Taking the time now to plan for the future will help ensure your dependents have the necessary funds, even if you can no longer be there to provide for them. It can also mean that your children will not have to forgo plans such as college, just because you are no longer there to provide.
Whether you are healthy or have health problems, prices among similar policies can vary greatly. Life insurance is a highly competitive business, and that’s a good thing for consumers. On the other hand, you could waste thousands of dollars over the course of a life insurance policy by not using an independent agent who represents many companies. An independent agent can do the shopping for you and show you rates from many different companies.
Be an informed consumer, don’t wait until it’s too late to protect the ones you love. We just published a new whitepaper titled How to Protect Yourself and Your Family: What Everyone Must Know About Life Insurance. This report, an $87 value, is available to all clients of H&H at no cost. You really can’t afford to ignore the vital information in this report.
Now before you say to yourself, “I’ll take my daily latte instead” or for that matter, anything other than cyber liability insurance, if you’re a business owner, you need to pay attention.
Electronic data has become essential in all aspects of business activity, and has intrinsic value. Most businesses these days are completely dependent on their computer system. Storing personal data on your network, individual computers or even keeping this personal information in a paper file leaves businesses vulnerable to an attack.
The looming threat of a virus, hack on your system or even a rogue employee are risks to be taken very seriously. Cyber liability insurance has become increasingly important to addresses these risks.
While cyber liability insurance has been around for nearly 10 years, most business owners have just started hearing about it over the past few years. When we review this coverage with clients, the two most common questions are:
- What is it?
- Do I need it?
What is cyber liability?
Cyber liability addresses the risk the business faces with e-business, the Internet, networks, electronic data, informational assets and other personally identifiable information the business keeps about its clients or employees. Common types of risks include:
- Hacked computers
- Virus attacks
- Web content liability
- Privacy issues
- Infringement of intellectual property
These types of attacks tend to be more public because the amount of damage is so huge – as evidenced by the Sony data breach at an estimated $171 million – but employees continue to pose the greatest threat.
According to Kristen Simonson, underwriting director with Travelers Global Technology division, “Many of the data breaches that have occurred over the past several years are not limited to hacking. In fact, the majority stem from old world issues such as employee negligence in password management or leaving confidential documents out for anyone to see.”
Do I need it?
- Does your business maintain electronic records with personal data on your clients?
- Do you keep paper files with personal data on your clients?
- Do you store (digitally or in a paper file) personal data on your employees?
- Do you accept credit card payments from your customers?
- Do you have a laptop or smartphone to access your email?
- Do you shred outdated files?
If you answered yes to any of these questions, you have a risk that needs to be addressed. Seem like a fairly broad list? That’s because nearly every business in operation faces the risk of its clients information, or personal information of its employees, being compromised.
For more information on cyber liability insurance, or for specific recommendations on best practices to reduce your cyber liability risk exposure, contact us… we’re here to help.
Portions of this article reprinted with permission from Professional Insurance Agents Association of Ohio
When a tenant makes permanent improvements to a leased building, the improvements usually become the property of the building owner. The tenant gains the ability to use and enjoy the improvement or betterment during the period of the lease.
Examples of improvements could be:
The typical business property policy defines improvements and betterments as: “fixtures, alterations, installations or additions that are made a part of the building that is occupied but not owned by the named insured, and the named insured acquires or makes at his expense but cannot legally remove.”
Here’s the important question for the tenant that has made improvements to the leased building: If there is a loss and the improvements are damaged, what has the tenant lost if the building improvement actually belongs to the building owner?
The tenant has lost the “use interest” in the improvement. For example, if a tenant installed an air conditioning system in her retail store to keep her customers comfortable during the hot summer months and it’s struck by lightning, the tenant has lost the use of the air conditioner even though it’s considered part of the building that she doesn’t own. It is a possible loss of use of the improvement that gives a tenant an insurable interest.
Coverage for improvements and betterments are automatically included since the business personal property section of the business property policy actually refers to a named insured’s “use interest” as tenant in improvements and betterments. BUT, don’t forget – it’s important when determining a limit for business personal property to consider the value of improvements and betterments.