• Business Solutions

Across a wide and varied list of industries, a claim arising from the operation of a vehicle is the most severe threat to a company in terms of the probability of a large liability claim. When we help clients select the most appropriate limits of insurance there are lots of theoretical discussions about products and professional liability precedences, but the most realistic scenario for a claim over $1,000,000 is from a commercial auto liability loss and resulting 3rd party suit.

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.

Risk management for businesses in Rock Hill and Fort Mill goes beyond setting up processes to help protect your assets. It also involves using best practices once you’ve filed a claim to ensure you receive maximum recovery.

When filing an insurance claim, it is important to be truthful and to cooperate with your insurance company’s investigative procedure; not doing so may lead to a complete forfeiture of your rights. Read the following court case and learn the consequence for a retail business.

A fire in an insured’s furniture store caused damage to the merchandise, fixtures, and leasehold improvements, and the insured filed proof of loss in the amount of $129,000. Of this amount, $71,000 was for damage to merchandise “in sight” after the fire; approximately $20,000 for merchandise missing or not identified after the fire; and about $38,000 covered damage to the improvements, betterments and fixtures.

The insured and the insurance company were unable to agree upon the amount of the loss. The company conducted numerous oral examinations under oath of the insured’s principal officers and its accountant. During the last hearing, the insured announced that it was amending its proofs of loss by withdrawing the “missing merchandise” portion of its claim, reducing its total claim to $109,000.

At the same time, the insured, pursuant to policy provisions, demanded an appraisal and named its appraiser, but the insurance company refused to take part in any appraisal because of the insured’s intentional and fraudulent concealments, misrepresentations, and refusal to produce documents and information during the examination. The insurer denied liability because of the insured’s breach of warranties.

Judgment was entered in favor of the insurance company. The court stated that the policies were void because the insured had willfully refused to answer questions and produce documents. The higher court affirmed the judgment insofar as it held that the insured was not entitled to an appraisal. However, it ruled that the questions of the insured’s breach of policy provisions (their refusing to answer questions, etc.) were triable issues of fact, and the judgment was modified accordingly.

Peoples First helps its clients through simple and complex claims processes to ensure maximum, allowable benefit according to the terms and conditions of the insurance policy. Contact us should you ever be in need of assistance.

No matter the size or type of your business, a disaster could occur that could seriously curtail or even shut down operations. As a manufacturer or contractor, this can be easy to grasp, but even if you’re office bound, like a nonprofit or healthcare provider, you’re still vulnerable to such troubles as utilities loss or flooding from a faulty building system or tenant. Most businesses feel immune to disaster and it is not unusual for them to overlook creating disaster plans. Further, those companies that do have disaster or continuity plans in place often fail to update their plans on a regular basis. Besides having an updated plan, it is also important to test plans.

Think Negatively, Then Creatively

Business decision makers have to spend time preparing for the possibility of catastrophe. It could be a natural event, or it could have a human origin. Regardless, an owner, manager or executive has to think about the many events that could either temporarily or permanently interrupt their business. In other words, a business must consider what threats exist to their normal, profitable operations. The task may initially appear overwhelming. However, it is just a matter of considering what the business does; where it does it; how it does it; and why it does it; then, examine what could happen to stop any of these things.

Natural interruptions could be caused by wind and rainstorms, flood, snow/ice storms, earthquakes, extended or extreme temperatures, etc. Human events may include fires, break-ins, mobs, sabotage, etc. Typically, a thorough consideration of problems involves identifying the worst possible things that could occur….even when their chance of happening is remote. Remember that a single, unanticipated event could cripple or even terminate a business, so you need to have a plan that contemplates a wide variety of harmful situations.

Consideration must be given to a business’ physical structures and property, machinery/equipment, management, finances, employees, products, stock, finished goods and goods in process, services, communications, transportation, contractual obligations, competition, suppliers, distribution, and so on.

Recovering from disaster depends upon many factors. Regardless the reason for a business suffering a serious interruption, the goal has to be on resuming normal operations as quickly as possible. Getting back into business often depends upon insurance, but other arrangements may be necessary and even be more important. Consider plans that include the following:

• Arranging use of another location to run the business
• Having duplicates of key business records (kept at another location)
• Arranging other sources of product supplies if a key supplier’s business is interrupted
• Having access to substitute production machinery
• Buying and maintaining generators/alternate sources of light and power

When considering how to deal with events that could threaten your business, the biggest disaster could be the failure to create a viable disaster recovery plan. The Risk Managers at Peoples First can provide resources to help you develop a disaster recovery plan for your manufacturing, contracting, healthcare, nonprofit or other type of business so feel free to contact us and discuss your situation.

An insurance policy is a legal contract that exchanges an insurance company’s obligation to pay for certain losses if the person covered by the policy pays a required premium. This holds true whether the policy covers your home, car, boat, life, airplane, jewelry or business. If there is a serious dispute between you and your insurance carrier regarding the coverage of a loss, a courtroom often becomes the setting for resolving the matter, but not always.

To Sue or Not to Sue?

In many instances, filing a lawsuit is unavoidable. For instance, when a person seeking coverage has his claim denied, a lawsuit may be the only action that is available. But seeking satisfaction in court can be its own problem. Court calendars (dockets) are often backed up so it could take months or even years before a hearing can take place. Trials may be followed by one or more appeals. The legal expense can be staggering, involving court costs, filing fees, attorney costs, research costs, fees for expert witnesses and a host of other expenses. Time and cost considerations are great incentives for finding other methods to resolve disputes.

Alternative Dispute Resolution

When disagreeing about the amount that should be paid for a loss, mediation and arbitration are popular alternatives to suing your insurance company. Each is a form of Alternative Dispute Resolution (ADR) since they are alternatives to going to court.

• Mediation – This process involves the two parties meeting to discuss their situation with the help of a mediator. The mediator typically has special training and a legal, financial or similar background. As a disinterested party, the mediator studies information from both sides of an argument. Mediation sessions begin with each party fully explaining their position to the other party and the mediator. It is critical that each party is able to explain their side of the issue without interruption. The mediator then discusses each party’s position in private. Afterwards, the mediator shuttles between the parties and tries to negotiate a settlement. The most important features of mediation are that the process is voluntary and the disputing parties are actively involved in reaching a solution.
• Arbitration – This is a method that is frequently required by an insurance policy provision. Under arbitration, you and the insurance carrier each select a representative (arbitrator). Once the arbitrators are selected, they agree on another arbitrator who acts as the arbitration judge. The three persons discuss the merits of the situation and, once any two of the three persons agree on a settlement amount, the process ends. Arbitration differs from mediation in two important respects. First, the disputing parties are bystanders, waiting for a decision to be made by their selected representatives. Second, arbitration is (generally) binding on both parties.

If you are in a dispute with your insurance carrier, no course of action is perfect. Considering the cost and time involved with lawsuits, it makes sense to take advantage of other options to handle high-stakes disagreements. If you need more information, Peoples First is able to navigate you towards an advisable way to reach agreement with your carrier.

An insured’s experience modification, which affects their annual premium, was set at 1.13 by the National Council on Compensation Insurance (NCCI). Our claims department determined that NCCI used incorrect expense payments to create this modification. As a result we had the expense modification was adjusted to a 1.08 and the policy was re-rated, lowering the insured’s annual premium.