News : Commercial

Why does it matter how my business policy is “Classed”??

The excerpt below is from the ISO BusinessOwners Common Policy Conditions. This is included in pretty much every BOP (BusinessOwners Policy) as well as most Commercial Packages.

“C. Concealment, Misrepresentation Or Fraud
This policy is void in any case of fraud by you as it relates to this policy at any time. It is also void if you or any other insured, at any time, intentionally conceal or misrepresent a material fact concerning:
1. This policy;
2. The Covered Property;
3. Your interest in the Covered Property; or
4. A claim under this policy.”

Why, then, is it important for you as an insured to know how your policies are classed?

Each insurance policy is “classed” based on the exposures that exist within your operation. The insurance industry has come up with a set of codes that we use to attach to your specific business operations based on what you do. Each class has a “scope” that includes a set spectrum of operations and activities that would fall into each classification.

Some insurance agents will attempt to improperly classify a risk in order to reduce price or fit it into a specialty program with competitive pricing. This sometimes goes beyond “thinking outside the box” and enters into a situation that might fall into the above condition, potentially resulting in a “voided” policy.

Additionally, applications for insurance are a very important part of classifying a risk. The statements you make on the application directly impact how an insurance company classifies your operations. As a result, it is imperative to be truthful and complete in your answers on the insurance application. In many cases, courts have decided that misrepresentation or providing false information on an insurance application is sufficient reason to deny payment of a claim.

We sometimes run into cases where a prospect’s current policies are classed in a way we feel does not accurately reflecting the real exposures of the operation. In that case, we cannot in good conscience offer coverage under those old classifications. At times, this may put us at a pricing disadvantage but we believe that the long term benefits of properly advising our clients far outweigh the short term benefits improperly classing a risk.

We take our job seriously and we take protecting our client’s business seriously. The more you know about your exposures and coverage, the more successful and protected your business will be.

By: Patrick F. Baggett
Vice President Commercial Lines





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The Risks of Saying “I do”- Wedding Insurance


In our office, we often get calls for Wedding Insurance. However, I would venture to say that a majority of “Brides to be” just don’t

 You may want to consider these liability concerns for your upcoming Big Day: consider the liability risks associated with their nuptials.

  1.  Alcohol – Many people think that because a venue or caterer is serving the alcohol, you are not liable for anything that happens as a result of serving. This is a common misconception and could be a costly one. When entertaining with alcohol, always make sure you have adequate liquor liability in place by consulting a knowledgeable insurance professional.  
  2. Certificates of Insurance – You can never be too safe in this arena. If you are hiring a caterer, band, party bus, etc… always make sure those contracted carry adequate liability insurance. Being named on their policy would also limit your exposure for any actions of those you subcontract for the wedding.
  3. Exotic Venues – Opting for a wedding in your Grandparent’s 200 year old barn seems idyllic. However, make sure to carefully consider the risks your guests might encounter at the unique and perfect venue you select.

These three items are a good way to start considering the liabilities associated with your wedding. It is your big day and we hope nothing goes wrong… but if it does, make sure you are protected with wedding insurance from a trusted insurance professional.


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Poll: Nearly Half of All Drivers Who Hit Parked Cars Don’t Always Leave Notes

I am sure you have had this happen to you. Go into Target to pick up a few items and come back to a ding on the side of your car. Maybe a dented bumper that you know wasn’t there before.

Surprisingly, in Portland Oregon, there is a 50/50 chance that individual did not leave a note with contact information to file a claim.

View the entire article in Claims Journal here.

By:Patrick Baggett – Vice President Commercial Lines

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Internet Liability Coverage

Is your business protected against allegations, including infringement

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of Internet-related copyright, trademark, trade dress or service mark; defamation; violation of another's right to privacy; failure to adequately protect private information; or damage to other's networks or computer systems due to the transmission of a virus or other malicious code?

Internet Liability Coverage protects you

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against Web site publishing or network security liabilities involving the transmision of data to and from your web sites or your computer networks.  Our Internet Liability Coverages address both the security breach and intellectual property/personal injury exposures associated iwth the use of technology in today's business world.  Contact our Commercial Lines department for additional information.

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Computers – Where would your business be without them?

Your computer system organizes your communications, controls your inventory and holds your creative ideas.

You have a significant investment in this technology, and you should protect it.

Your conventional property insurance policy may cover damage by fire, wind or theft; but that policy may not completely protect your hardware, software and network capabilities. In order to protect your system against special electronic hazards, you need a policy tailored to the unique nature of the technology.

Accept no substitutes

The Cincinnati Insurance Company's Electronic Data Processing Policy features protection from conventional causes of loss such as fire, wind and theft. More importantly, Cincinnati's EDP Policy protects against
loss caused by:

•    accidental erasure of data
•    mechanical breakdown
•    employee sabotage
•    short circuiting of equipment
•    sewer backup
•    computer virus
•    changes in temperature
•    flood and earthquake
•    sprinkler leakage

When software becomes a nightmare…

If only it were a dream … when your system suffers a mechanical breakdown, there may be damage to your hardware. However, even more serious is the loss of information or the loss of media (discs, tapes, CDs) on which you store information. The cost of these items may be substantial, particularly the cost to reproduce your data base and replace your programs. Cincinnati's policy extends coverage to these items for 20 percent of the equipment coverage amount on your policy up to $10,000.*

And downtime affects your bottom line

What-happens-when your–system-goes down?
In many businesses, the mere cost of repairs. The real financial impact involves the interruption of your business. If a computer breakdown could affect your earnings or require that you incur additional expense to resume operation, then EDP loss of income and extra expense coverage protects your revenues. The policy automatically
provides this coverage up to a maximum of $10,000.*

More coverage’s

Your EDP Policy:
•    covers your property while

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on your premises
•    follows you when it is necessary to move your equipment to another location
•    includes 20 percent of hardware/software limits up to $50,000* when in transit and away from premises
•    covers newly acquired property automatically up to $250,000 for up to 90 days
•    reimburses up to $50,000 for recharge expenses for fire protection system
•    covers up to 20 percent of the data/media limits up to $10,000* for duplicate and backup data/media stored
at other locations
•    provides replacement cost for valuation of property with no coinsurance requirement
•    covers scheduled locations on a blanket limit basis

Consider this option

Cincinnati's EDP Policy covers damage from electrical disturbances that occur within 1,000 feet of your business location. You may want to further protect your system from hazards created by electrical disturbances beyond 1,000 feet. A distant electrical transformer explosion may do considerable damage to your computer system. You may extend your electrical disturbance coverage as an option to your policy.  Protect your information technology with a high-tech insurance policy from The Cincinnati Insurance Company.

* Higher limits are available.

This is not a policy. For a complete statement of the coverage’s and exclusions, please see the policy contract. Coverage’s are available in most states. For information, quotes, policy service or coverage availability in your state, please contact your local independent agent recommending coverage. “The Cincinnati Insurance Companies” and “Cincinnati” refer to one or more companies of the insurer group providing property and casualty coverage’s through The Cincinnati Insurance Company or one of its wholly owned subsidiaries – o The Cincinnati Indemnity Company, The Cincinnati Casualty Company or o The Cincinnati Specialty Underwriters Insurance Company – and life and disability income insurance and annuities through o The Cincinnati Life Insurance Company. Not all subsidiaries operate in all states. 6200 South Gilmore Road, Fairfield, Ohio 45014-5141.

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Fraud and Embezzlement in the Workplace

Fraud and embezzlement in the workplace is on the rise.  We have seen an increasing trend involving Employee Dishonesty.  The Association of Certified Fraud Examiners estimates business losses due to employee theft at $400 billion per year.  Small companies can be especially affected by theft and embezzlement because they can’t afford extensive safeguards and aren’t large enough to absorb losses.

So, what can a business do to prevent this potentially devastating outcome?  First, be more vigilant with the oversight of employees that handle accounts and mon

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ey.  Create internal controls and stick to them.  Look for warning signs that indicate an employee may be stealing funds or inventory:  Changing lifestyles, unusual behavior, or reluctance to take vacation time, for example.  Installing these and other adequate controls are sound business practices to help deter theft.

Fidelity or Employee Dishonesty coverage is an inexpensive way to help protect your company assets from employee theft.  This, and the increasing trend in workplace fraud, make Fidelity coverage something we highly recommend to our clients.

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Workers’ Compensation Bill Becomes Law

SB1748/HB1645 will require sole proprietors and partners in the construction  business to carry workers’ compensation on themselves unless they are working directly for the end user. In other words, all sole proprietors and partners doing construction work for a general contractor or another subcontractor will be required to carry workers’ compensation on themselves, or be covered by the general’s policy.

The Insurors have been leading the effort to make this change in the workers’ compensation law for the last two years. The change basically puts into law court decisions on coverage for sole proprietors and partners. This change should eliminate independent contractor questions on audit as the general or subcontractor will be charged for any sole proprietors and partners that have done work for them unless the sole proprietors and partners carry their own workers’ compensation policy.

The bill was supported by all four construction trade associations, ABC, AGC, Roadbuilders and Homeb

uilders, in addition to support from organized labor and assistance from the Tennessee Departments of Labor and Insurance. Insurance interests involved include: AIA, PICA, Liberty and Allstate.

Insuror member Senator Bill Ketron and House Minority Leader Jason Mumpower carried the bill through two years of hearings and meetings. Senate leaders Jim Kyle and Lt. Governor Ron Ramsey provided valuable assistance and advice. Passage was bi-partisan in almost equal amounts in both chambers. Prior to final passage last week the bill was discussed no less than 14 times in various committees.

The new law has an implementation date of December 31, 2009. This length of time was selected to give contractors sufficient time to adapt to the new law. Likewise both state departments will have time to make necessary changes for smooth implantation.

Source: Insurors of Tennessee Volume 08-10 Friday – May 16th, 2008

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