We find that many adult children assume that their parent’s home and auto insurance policies will extend to them and their possessions in the event of a loss. This assumption is often false. Insurance policies are typically clear and will cover an adult child only if they are a full-time resident of the insured’s household. When your children reach adulthood they need their own insurance even if they live next-door.

At this point in your adult child’s life, insurance may not seem important because they’re moving around with, generally, low-value possessions. However, even when possessions are few, everyone has a legal responsibility to handle the damage they accidentally cause to other people and their property. If your adult child asks you for insurance advice, give them the name of your Peoples First risk manager to help them get the exact protection they need.

• Product or food delivery
• Transporting business products to wholesalers or retailers
• Retail product delivery to consumers
• Carrying persons for short, intermediate or long distance routes
• Picking up customer items for cleaning, repair, storage, etc.

Coverage is flexible. It may be purchased as a separate policy or as part of a package of coverage that can also protect buildings and business property (equipment, furniture, etc.). A BAP generally offers:

Liability Coverage – protection for physical injury to other persons or their property because of an accident related to your covered vehicle, including legal defense cost or expense.

Comprehensive Coverage – handles loss from any cause except collision. A limited, less expensive option is available. It only protects against a set of specific causes such as fire, lightening, explosion, vandalism and several others

Collision – takes care of damage from crashes with another object or overturn of the vehicle

Towing And Labor Costs –handles expenses for moving disabled vehicles

Loss of Use—Rental Vehicle Coverage – if you damage a rental car, this option helps to reimburse the rental company for income it loses because the vehicle is out of use. Also, there may be limited coverage for injury or damage that you cause to others while using a rented vehicle anywhere in the world.

Business Auto Policy Exclusions

Typically, a business auto (or similar form) will not provide coverage for the following:

• any injury/damage that you expected or intended
• responsibility for damage you assume under a contract
• losses that should be handled by a Workers Compensation, Disability Benefits or Unemployment Compensation Law
• Bodily Injury to an employee caused by a Fellow Employee
• Damage to property that is in your Care, Custody and Control
• Any bodily injury or property damage that occurs because of Pollution
• Any loss that is related to racing, demolition or stunts

Other items that are not covered are the same as those found with most types of policies, such as Nuclear Hazard or any type of War or Military Action. Racing, Wear and Tear, Freezing, Mechanical or Electrical Breakdown, Blowouts, Punctures or Other Road Damage to Tires are also excluded.

Are you protected against business auto losses? If not, contact Peoples First, our insurance agents serve Rock Hill, Lancaster, and Fort Mill South Carolina and will be happy to answer any questions you have about your Business Auto Insurance coverage.

Property Considerations

There are gaps between your business insurance policies and your employees’ homeowners policies, leaving you vulnerable to loss due to property theft or damage. If your employee is using your company’s computer equipment to perform their job from their home, it may not be covered. Additionally, if employees use their own computer to perform company work, it may not be covered either. This is because residential insurance policies severely restrict or exclude coverage for business property. A further complication is that business property usually consists of high-valued items that are vulnerable to damage and/or to theft. Such property includes fax machines, copiers, computers, computer peripherals (monitors, printers, scanner, modems, routers), phones, answering machines, PDAs, etc.

Liability Considerations

Personal insurance policies that include liability protection typically exclude business-related losses. Further, different policies can be quite broad in interpreting how a loss is connected to “business.” Liability Policies A and B would routinely respond to handling an insured who spilled hot coffee on a guest in his home during the work day. What if the visitor was your company’s client rather than the employee’s social guest? Policy A may still offer coverage because it considers the coffee spill to be a common home hazard. Policy B, however, may flat-out exclude the loss because the injured person was in the home for a business reason.

Vehicle Liability

Your telecommuting employee will be using their personal vehicle less for going to and from work, but perhaps more for tasks related to their job, such as making deliveries or client calls. Many instances of job related use might be excluded from their personal auto coverage, which could result in a dispute.

Please read Part 2 in next Monday’s blog.

Help the underwriter understand what your company does.

We can help the underwriter better understand your business if you provide us with the following:

• company brochures and individual product sales sheets
• a copy of a sales presentation recently provided to a prospect
• a simple spreadsheet that lists your company’s revenue by each major category of product or service, and the percentage of international sales for each category, if applicable
• pre-recorded videos or webinars that explain your products/services
• floor plans and photos of your primary locations, especially if you manufacture your own products

Help the underwriter appreciate why you are a good risk.

If an underwriter feels that you are a better risk than the average company then they will be more willing to provide you with better terms and rates. Having the following information would help us market you this way.

• a claims history with all insurance companies of the past 5 years
• a copy of any and all sales contracts, purchase orders, etc., that you provide customers
• a copy or summary of any contingency or disaster recovery plans
• a copy or summary of IT and data security and protection plans, including plans for responding to a security breach
• an outline or summary of any training you provide your sales team on managing risk in contracts — we want to show that you stick with certain basic contract provisions that protect your company and do not give in to every customer request

Basically, we at Peoples First encourage you to provide us with any documentation you have readily available that will help underwriters better “picture” your company and its operations. Investing this little extra time will help you earn a more competitive proposal from commercial insurance underwriters. If you have any questions or wish to discuss this topic in greater detail, please contact us at Peoples First – we’re always eager to help our clients.

Most Rock Hill individuals use their homeowner or residential insurance policy to handle their hobby activities as a collector or enthusiast. A homeowner (HO) policy usually includes a definition of “business” and some are so broad that nearly any activity qualifies as a business. In such instances, a hobbyist or enthusiast should consider whether separate business insurance is necessary.

Is Your Hobby a Business?
Let’s say you love photography and take pictures at events such as weddings to finance this passion. While you consider this to be a hobby, your insurer may define your activities as a business. If your camera equipment is stolen or damaged, there may be as little as $250 protection under your HO policy. HO coverage for business property differs depending on whether the property is located at or away from your residence.

Imagine being a photographer at a wedding. As you are snapping photos of the wedding party, a large boom stand with hot lighting equipment tips over injuring the maid of honor and the flower girl. If the injured women sue you since the injury is part of a business activity, your HO may exclude coverage.

When Your Job is Out of Your Home
There are numerous types of sales and service jobs. These include cosmetics, clothing, kitchen supplies, home decorator items, computer repair, web site design, photography, music lessons, auto repair and many contractors. Each job involves some type of business property that is excluded or severely limited under the HO policy. Therefore, each situation may need to be covered by business insurance.

Although independent consultants are in business, too often they think their HO policy will provide coverage because they don’t have special equipment or leave their home office to run their business. Office furnishings such as laptops, PDAs, desks, chairs and file cabinets are subject to HO policy limitations. Without adjustments to the homeowner policy there may be little or no coverage for property used in a business.

Need More Insurance?
The legal form of the business may create a need for business insurance. If a limited liability company, corporation or partnership is formed, the related activity is a business and needs business coverage. Also, most HO policies will not provide coverage for employees or for any professional liability.

What can you do? First, determine if your activities qualify as a business. Then talk to Peoples First to determine what coverage is provided by the policies you currently have and what options are available to fill-in any gaps in protection.

Respondents to the survey were concerned that the amount of litigation they face will increase in the coming years due to the more complex regulatory environment. In the United States labor law issues were identified as the number one source of additional litigation; in the United Kingdom it was contract disputes.

It’s important to consult with us about your contracts and customers, and to discuss possible laws that apply to your obligations under those agreements. While it won’t be possible to insure every conceivable risk – it is still worthwhile determining if specific expenses can be covered such as the cost of investigations and some forms of fines.

We specialize in commercial insurance for businesses in a wide variety of industries. Using our excusive Risk Watch™ process is a comprehensive approach to identifying risk and developing a plan to mitigate it. Please contact us today to discuss a review of your company’s process for responding to allegations of violating state or federal statutes and requirements.

Did you know that your hobby may significantly affect your personal insurance needs? Hobbies often require a large investment in tangible property and may even create some legal responsibility to other persons or their property. Home owners insurance in Rock Hill and surrounding areas may or may not provide asset and liability protection for your hobbies so we encourage you t read this blog post and the next.

Are you a collector or an enthusiast?

A collector acquires a category of property such as stamps, sports memorabilia, comic books, dishes or glassware. An enthusiast collects property relating to a physical activity like hunting, music, cyclist, or painting. A collector’s focus is on physical property. An enthusiast’s focus is on this as well as the liability exposure that is inherent in their activity.

Eligibility of Collectible Items

Your special property should be properly insured and most homeowner policies provide minimal protection for collectible property. Why? Collectible items are often fragile, valuable in relation to size, and worth more as part of a collection. The value of collectibles kept in one room may be more valuable than all of the rest of your home’s contents. Regular homeowner coverage is not designed to handle high-valued property that is easily destroyed, lost or is vulnerable to theft.

Consider Supplemental Policies

Even when collectible property is eligible for a policy’s full coverage, this may not be enough. You may want your special property to be covered from more causes of loss than your family room couch. It may be worthwhile to buy an endorsement to add additional coverage for your collectibles to your homeowner policy. Depending upon the type and value of your collectibles, you may even have to consider specialty coverage which typically makes consideration for replacement cost and for property that appreciates in value.

If your hobby is more hands-on, then be sure you’re protected against any legal liability related to your activity. Ask yourself the following:

• Are there any dangers associated with the hobby?
• Does the hobby involve frequent travel to sites or meets?
• Does the activity attract frequent visitors to your home?
• Do you publish hobbyist newsletters or give advice to others?
• Do you actively sell or trade property on or away from your home?
• Does your activity involve equipment that’s inherently dangerous to others?

Fortunately, many aspects of a hobby, especially legal liability, are covered by a homeowners policy, but your activity may need special or even business coverage (see part 2 of this blog post). Don’t let your enjoyment be interrupted by inadequate protection. Discuss your special interest with Peoples First and we’ll assess your coverage needs so you can enjoy your hobby.

Even very small companies with 2-3 employees and no “owned” vehicles have created claims in the $1 million to $7 million range in many states. When we discuss Umbrella claims – an Umbrella being the excess liability policy that provides an additional layer of insurance – with major carriers, usually 2 of their 3 largest claims each year are from an underlying auto liability claim.

There is a relatively low cost tool you can use to help reduce the likelihood of a claim in the future. Motor vehicle records (or “MVRs”) are a report for each individual holder of a driver’s license that summarizes that driver’s history of violations, accidents, tickets, etc. The evidence is that drivers that show a pattern of driving behavior that results in tickets and other incidences are more likely to create a severe accident with bodily injury to third parties.

Thankfully, MVRs are either free or relatively inexpensive (under $20) to order once a year for each employee. By simply asking each employee to provide their MVR, and then reviewing each of them and being prepared to take action accordingly, every employer can help reduce the possibility of a claim from the most likely source of large losses (auto liability).

It is best to have a written plan of action that is followed based on the results of an employee’s MVR so your response to issues is consistent. We can help you on a consultative basis to develop your own set of guidelines based on the number and type of violations for a driver. Actions can include a restriction on the employee’s driving activity on company business, change of job duties, and dismissal from employment.

Ignoring employees with extremely negative MVRs, such as those driving on a suspended license, will not serve as a defense and only increases your liability – call us today to discuss a plan for monitoring and reducing your liability exposures arising from the operation or use of vehicles on company business.

Thanks to everyone who has been involved in years past. We appreciate the support and look forward to seeing you in May!

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