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Is your business protected from hail?

By Cincinnati Insurance

2006-2012-hail-map

Most areas of the country experience hail storms that can cause significant damage to rooftop equipment, severely disrupting your business and costing you time, money or even customers.

A major hail storm can severely damage fins on your heating, ventilation and air conditioning equipment, rendering it inoperable. That may affect your operations or cause you to cancel functions.

You can take a few steps to help keep your business running smoothly and avoid down time by protecting the equipment that keeps your customers and employees comfortable.

Hail guards serve as a protective shield for your valuable heating, ventilation and air conditioning equipment, as well as roof vents and cooling equipment, which are highly susceptible to hail damage. Large hail can severely damage a unit, but small pellets can cause harm as well. Condenser coil damage, not noticed or addressed, affects the coil’s efficiency, increases your costs and shortens the useful life expectancy of your equipment.

Hail guards come in a variety of sizes and shapes, but most meet the needs for common equipment such as fans, air conditioners, condenser units, heaters and skylights. Many contractors offer customized options for hard-to-protect items. Look online for hail guards to find more information, resources and various types of guards.

When purchasing hail guards, consider ones that are:

  • strong enough to resist hail
  • porous enough to allow sufficient and unrestricted air flow
  • close enough to the unit to obstruct hail that strikes the roof and bounces up to the unit
  • equipped with taut mesh/fabric guards that have sufficient clearance from louvers or fins to prevent hail from deflecting into the fins

In most cases, hail guards warrant the investment when you consider the widespread frequency of hail storms and the relatively low cost of the guards compared to the down time, efficiency and shortened life or replacement of your valuable HVAC equipment. Contact your HVAC contractor or equipment manufacturer for more solutions to protect your valuable equipment and keep your business in business.

Submitted by Scott Robinson and Stephen Dale

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What you need to know about PPACA Fee’s as an Employer

The goal of health care reform is health care for all… but at what cost? By 2015, businesses with 100 or more full-time or full-time equivalent (FTE) employees will be at risk for financial penalties (the so-called “employer shared responsibility assessments”) if they do not offer health coverage to full-time employees. The same fate follows in 2016 for large employers with 50 to 99 FTEs. We are all well aware of the “no offer” and “insufficient offer” assessments that could be applied to employers that do not offer affordable, minimum value coverage to full-time employees, and most of us have already been advising clients on penalty avoidance strategies for many months. Meanwhile, business owners nationwide struggle with weighing the financial aspects of providing such coverage or paying the penalties. A recent survey suggests that only 28 percent of companies that employ a large number of low-income workers offer health benefits.

There are other costs to consider as well. In addition to the employer shared responsibility assessments, various other fees are being felt by employers. These fees are expected to ultimately result in higher premiums and could undermine the core principle of affordability in the Patient Protection and Affordable Care Act (PPACA) that is meant to provide basic health protections for all Americans. Over the next several years, group health plans may be required to absorb the costs of up to four new fees. These fees imposed by PPACA on insurers will inevitably trickle down to increase rates in the coming years. In a recent meeting presented by a major national health insurance carrier, regarding “State and Federal Reform Impact,” it became clear that at least three new assessments/fees imposed on carriers will affect employers’ renewal rates in the future and ultimately their bottom line.

Reinsurance Assessment – This per capita fee on medical plans will fund a three-year reinsurance program designed to reimburse companies that insure high-cost individuals in the individual health insurance market. The total amounts to be assessed are $12 billion in 2014, $8 billion in 2015, and $5 billion in 2016. The estimated fee is approximately $63 per year ($5.25 per month) per covered individual in the first year; however, fees are expected to decrease in subsequent years. The assessment applies to both insured and self-funded plans. Insurance providers will pay the fee for insured plans while third-party administrators may pay the fee on behalf of self-funded plans. The fee is collected each year from 2014-2016 and the first payment is due January 15, 2015, for the 2014 benefit year. Membership counts for 2014 must be submitted to HHS by Nov. 15, 2014, based on the first nine months of the year. We expect this same schedule in 2015 and 2016.

Comparative Effectiveness Research Fee (CERF) – This is an annual fee imposed on all insured and self-insured plans. The goal of the research is to determine which of two or more treatments works best when applied to patients, thereby comparing different types of therapy against each other. CERF will be charged to health plans to help fund the research that will be conducted by the Patient Centered Outcomes Research Institute, a nonprofit organization established by PPACA. The initial annual fee is $1 per year per health plan member (includes dependents). The annual charge increases to $2 per member the following year and then increases annually with inflation after that until it ends in 2019. Insurance providers will pay the fee on behalf of insured plans, while employers with self-funded plans will need to determine their liability and account for this fee in their own reporting. For many plans, the first payments were due in July 2013.

Health Insurance Industry Fee – This annual fee impacts fully insured plans. The estimated cost of this tax will be $8 billion for 2014 and eventually increase to $14.3 billion by 2018. The tax is divided among health insurers and will likely be passed on to plan sponsors as an addition to premium. The Health Insurance Industry Fee has a much greater potential financial impact than either of the other two taxes because it is intended to help fund the cost-generating provisions of the PPACA. The fee will be divided among health insurance carriers based on each carrier’s share of the overall premium base and will only be assessed relative to insured health plans, inclusive of medical, dental, and vision plans. Self-funded health plans and associated stop loss premium will not be included in the premium base. The cost impact of the fee is expected to be in the range of 2 percent to 2.5 percent of premium in 2014, increasing to 3 percent to 4 percent of premium in later years. Insurance companies will likely begin to reflect this additional cost in their premium rates in 2013 and/or 2014. Importantly, this fee does not sunset.

Cadillac Tax – A 40 percent excise tax will be assessed on the cost of coverage for health plans that exceed a certain annual limit ($10,200 for individual coverage and $27,500 for other than individual coverage) beginning in 2018. Under the current regulations, the cost of health coverage includes employer contributions to HRAs, as well as employer plus employee pre-tax contributions to FSAs and HSAs. Health insurance issuers and sponsors of self-funded group health plans must pay the tax on any dollar amount beyond the caps that is considered “excess” health spending. Note: There are certain adjustments built into the thresholds that may apply by 2018. Also, the thresholds may increase for certain plans pursuant to age and gender adjustments.

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Safeguard valuable business records and papers

By Cincinnati Insurance

paper-documents-and-records

Take steps to protect
paper documents and records.

Even in our electronic, computer-driven world, few businesses can operate without acquiring a number of valuable papers and physical records. Losing them to a fire or natural disaster could seriously affect business operations. Before you have a loss, take steps to protect valuable papers, or consider ways to store copies.

You know your specific business needs, but valuable papers and records may include:

  • property deeds or construction plans
  • patient, customer or employee records (remember that some may contain information protected by state and federal privacy laws, requiring additional protection measures)
  • financial documents
  • original copyrights or patents to key products
  • product specifications
  • manuscripts or blueprints
  • customer lists
  • licenses, permits, contracts

Any business could experience a loss of valuable papers and records, most commonly from an accidental cause such as a fire. Earthquake or weather events such as tornado, hurricane or flood also account for a significant number of losses. Water damage can also occur from a plumbing failure, accidental discharge from a fire suppression system or backup of sewer and drains. And documents sometimes are the target of criminals seeking proprietary data or information for identity theft.

Replacing your valuable papers and records can be expensive and time consuming. Take precautions to protect your business by storing copies of documents and records at an off-site location.

Most commercial insurance policies include limited coverage to replace valuable papers and records. Additional coverage can be added to your policy by endorsement to cover certain situations at your business or when working off-site. Your insurance agent can help you determine how much coverage you need to protect your business.

When a loss occurs, your insurance claims representative can assist you with locating vendors that specialize in remediation and restoration of valuable papers and records. USA.gov provides assistance with replacing vehicle registrations, tax returns, county and federal documents.

Submitted by Karen Roop

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Coping with loss in a catastrophe

By Cincinnati Insurance

tree-down-on-wires

Safety should be the No. 1 priority
after a natural disaster.

Protecting yourself and your family is your first priority when your auto, home, business or personal property is damaged or destroyed by a tornado, hail, flood or other catastrophic event. Promptly treat any injuries. Remain calm and carefully survey the damage.

Be cautious during post-catastrophe activities to avoid injuries during rescue attempts and cleanup. Watch for downed power lines, gas leaks and electrical hazards that could result in fire, explosion or electrocution. Listen to local officials and emergency management personnel, who can assist you with locating emergency medical treatment, temporary accommodations, clothing, food, water and other needs.

Emergency response agencies and your insurance company will be there to assist you. Call your agent or insurance company to report your claim. Cincinnati policyholders who are unable to reach your agent to report your claim can reach us at 877-242-2544. (This number does not apply for workers’ compensation, life, annuity and disability claims.)

What you can do to streamline the claim process

  • Provide your claims representative with a contact number or numbers to reach you during daytime and evening hours.
  • Many areas are not accessible after a disaster due to safety concerns. If possible, let your claims representative know when the authorities allow access in order to schedule the earliest possible inspection of your property.
  • Make a list of your immediate needs to share with the claims representative.
  • Take photos of your damaged auto, home, business and personal property.

Protect your auto, home, business and personal property from further damage

  • Cover openings with tarps.
  • Board up windows and doors.
  • Turn off utilities.
  • Drain water lines to prevent freezing.
  • Extract water and start the drying process.

Complete an inventory of your personal property

  • It’s helpful to have an inventory stored in your safe deposit box or other off-site location. See our blog about how to create a home inventory.
  • Contact a contractor or builder to assess the building damage. If you are not familiar with the contractor or builder, request references. Some municipalities screen vendors and require registration to protect home and business owners. See our blog about how to avoid fraud after a disaster.
  • Secure a repair estimate for the damaged property, if possible.
  • With extensive damage, it is helpful to have pre-loss photos, blueprints and floor plans.

Disaster Resources

These additional resources may assist you in preparing for and recovering from disaster:

Early detection key to managing data theft risk

By Cincinnati Insurance

Monitoring is an important part of preventing data theft.

Monitoring is an important part
of preventing data theft.

Every business, large or small, should consider the growing exposure to loss or theft of personally identifying information of customers or employees and be prepared to respond to an unfortunate event. Data security is one of the top risks that any organization faces.

Based on a Trend Micro-sponsored Ponemon Institute study, more than 78 percent of organizations have suffered at least one data breach over the past two years.

We discussed some basic steps that any organization can take to protect sensitive data and to control technology practices in our blog last year: Protect your business from data theft.

Early detection and response is crucial in mitigating the financial risk of a breach event. An effective incident response plan can help you detect an attack and outline procedures to minimize damage.

You may wish to purchase insurance to assist you with pre-breach preparations and with expenses involved in responding to and containing a loss of sensitive company information. When considering data breach expense coverage, look for a policy and company that provides you with:

  • Ongoing breach preparation tools and services, providing you with templates for development of an incident response plan, current information about notification laws for your state and educational resources including data protection tips and an encryption guide
  • Direct access to individuals who are trained to help you assess breach situations and guide you in your response to the event, helping you to mitigate the effects. They should be able to alert you to compliance issues, including laws and regulations that may affect your business
  • Coverage for forensic analysis and legal review of the event to determine if there was a breach and what likely caused it
  • A toll-free helpline for your customers, clients, members and employees whose personally identifiable information may have been exposed, to answer their questions about the breach and give them guidance
  • Optional enrollment available to affected individuals for services that include a credit report and automatic monitoring of credit and public record activities, when Social Security or driver’s license numbers have been exposed
  • Services of an identity restoration case manager for individuals who appear to have been the victim of identity theft as a result of the breach. This case manager helps the victim correct credit and other records and regain control of their personal identity

Ninety-seven percent of data breaches examined in the 2012 Verizon …read more

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Invest your time with an independent agent

By Cincinnati Insurance

Avoid insurance gaps by discussing your needs with your agent.

Avoid insurance gaps by discussing your needs with your agent.

When you’re purchasing insurance for your home or business, the most important investment you make is not the premium you pay, but the time you spend with your agent.

Once every three years, at least, sit down with your independent agent and get some good advice.

Some policyholders are disappointed when their expectations for insurance coverage are not met: they have a loss and file a claim, but things don’t work out the way they expect. In many instances, you can avoid a less than satisfying outcome by taking just a little time beforehand to discuss your situation and expectations.

For example:

  • Businesses benefit from business interruption insurance, but they need to understand what’s covered and what’s not. It can be complex to establish appropriate limits to cover the interruption of income from a covered loss – funds you would need to pay bills, payroll, mortgages and other expenses. An agent can help you identify your specific needs.
  • Many people don’t know that damage from flood is not covered under a standard homeowner policy, nor do they completely understand other water damage limitations: backup of sewer, hydrostatic pressure, sump pump failure, etc. An agent can help you understand these limitations and your options.
  • A homeowner might have thousands of dollars of heirloom silverware – It’s not automatically covered for its full value in a standard policy. But you can get coverage. Your agent has to understand your specific exposures and expectations in order to advise you on the right coverage for valuables and collections.
  • Rental cars – should you take the insurance offered by the rental company? It depends on your auto policy. For some of these things, even your agent may have to think about it. But you need to give them the opportunity to do so.

You can get quotes online for generic coverages, assuming the details of your situation are just like everyone else’s. But every situation is unique, and unless you take the time to identify what makes it so, an insurance company may assume your needs are generic.

After a loss, it seems we all have plenty of time to talk with an agent. But the best time to have that conversation is before the loss occurs.

Make an appointment with your insurance agent as you would any other financial adviser. Explain what is unique about you, your family, your situation, your plans and goals. Your …read more

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When water is not your friend

By Cincinnati Insurance

Automatic shut-off systems can help prevent costly damage or frustrating cleanup.

Automatic shut-off systems
can prevent costly damage.

Refrigerators, water heaters, dishwashers, washing machines and toilets can be sources of leaks that can cause significant damage if not detected early.

A burst pipe with as little as a one-eighth-inch crack can release 250 gallons of water a day, according to the Insurance Institute for Business and Home Safety.

The most effective way to prevent costly water damage in your home is to install a leak detection and water shut-off system. There are several levels of protection that can meet the needs and budgets of all homeowners:

  • Leak detection system. This system sounds an audible alarm when a water leak is detected. These can often be integrated with your security system to automatically notify you even when you are not at home. This type of device does not provide any water shut-off feature once the leak is detected, but it can be purchased for $50 or less.
  • Leak detection with single-appliance shut-off system. The next level system detects water leaks in a single appliance, then automatically shuts off the water supply to that appliance. These are commonly used on water heaters and washing machines. Single-appliance devices can be purchased for $75 to $150.
  • Whole-house leak detection/automatic shut-off protection. Top-level systems sound an alarm and automatically shut off the main water supply to the home when a leak is detected at any of the common water sources where a sensor has been placed. Because these systems are fully automatic, they are potentially the most effective in preventing expensive water damage claims.

They often can be connected to your home security system, and many allow you to control them remotely. Sensors can be hard-wired or wireless. A wireless system may work best for multi-level homes where multiple sensors are needed to cover all leak-prone areas. The cost may range from $300 to $1,500 depending on equipment and installation costs, with additional monthly monitoring fees if connected to a security system.

You may be able to install simpler systems yourself, but a whole-house system should be installed by a licensed plumber. Check your local codes for permit and inspection regulations.

Some insurance companies offer premium discounts for homes equipped with automatic leak detection and shut-off systems.

Consider installing an automatic leak detection/shut-off system to protect your primary residence as well as vacation homes or rental property that you own that may commonly be left unoccupied.

Submitted by Tamala Whitaker

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Contractors: How stable is your surety relationship?

By Cincinnati Insurance

Contractors need a stable surety bond program.

Contractors need a stable surety bond program.

The construction economy hasn’t exactly shifted into high gear just yet, but the future looks a lot brighter. As we move into 2014, contractors gearing up to pursue public works projects or other bonded work will want to ask yourself: where do I stand with my surety?

Your capacity to qualify for the best terms on your surety bond program creates business opportunities for you and protects the interest of the community that depends on your work.

In today’s environment nothing is certain, but there are ways you can enhance your surety position. These tips for contractors are valid for any business that does bonded work:

  • Choose your partners wisely – Build a strong supporting cast around your business, including a good construction-oriented CPA firm, a reliable bank, a professional insurance and surety agent, and a predictable surety company with accessible, knowledgeable underwriters. Look for a surety with superior financial strength and a long-range focus on building a strong relationship with you.
  • Keep lines of communication open – Taking out the element of surprise helps the surety build trust and confidence in your business. The sooner you provide financial results and other details, the sooner you and your surety can work together building your bond program.
  • Plan for the future – Make sure your surety knows and understands your business plan. Nothing helps them better understand why a particular job or business opportunity makes sense. Make sure you have a thoughtful way to analyze project risks and a process to decide what kinds of risks your company is willing and not willing to tolerate.
  • Manage your balance sheet – In good and bad economies, how well you prepare for challenging times can go a long way. Retain profit in your business; reduce dependence on bank debt; ramp up efforts to collect accounts receivable; and budget your overhead expenses to match realistic sales projections.
  • Optimize your organization – Rapid sales growth or decline can be challenging for any contractor to manage. Contractors have spent so much energy looking for ways to reduce costs in recent years, you must now find ways to use your resources wisely and price your work with adequate margins.

So, as construction activity picks up, be disciplined and steadfast as you accumulate more work. It’s easy to understand why contractors fail in declining economies, but contractors can easily over-accelerate during economic recoveries, too.

Balance sheets may be thinner and organizations …read more

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