organizational governance

risk management: organizational governance

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Effective organizational governance is essential for any organization, no matter its size or industry. It ensures that the organization is being run in a transparent, accountable, and ethical manner, and helps to guide the organization towards achieving its goals. Good organizational governance also promotes a healthy organizational culture, where employees feel valued and are able to contribute to the organization’s success. 

It is important for organizations to regularly review and assess their governance practices to ensure that they are effective and aligned with the organization’s objectives.

the importance of organizational governance

A prime example of the importance of organizational governance, as noted in a blog post by the Volkov Law Group, is the Enron scandal of the early 2000s. Among other unethical business practices, the company used fake accounting to conceal its financial troubles. This ultimately led to its collapse and tarnished reputation. Had Enron followed basic governance rules, it might still be around today.

Not every case of faulty organizational governance is as extreme. For example, if you bring on new leadership and fail to update permits with the name, title and role of a new leader, you could be cited for failure to maintain documentation. This type of issue often goes unnoticed until you are faced with an inspection or regulatory action.

Organizational governance is not a new risk. You’ve probably already addressed it in your risk assessment. But once you conduct your initial risk assessment and take corrective actions, it’s easy to forget about organizational governance. Over time and through various changes, you can fall out of sync with your original governance. This places your organization at further risk.

It is important for organizations to have strong organizational governance in place to avoid the negative consequences that can arise from poor governance. This includes not only financial risks, like those faced by Enron, but also reputational risks and potential legal consequences. Regularly reviewing and updating governance practices can help organizations avoid these risks and ensure that they are operating in a responsible and ethical manner. 

Additionally, organizations should consider implementing internal controls and processes to monitor compliance with governance policies and identify any potential issues. By taking proactive steps to address organizational governance, organizations can protect themselves and build trust with their stakeholders.

how to minimize your risk

What steps do you need to take to reduce your organizational governance risk? There is no one-size-fits-all answer. But it’s important for your board and executive management to agree on how they will work together to build a risk-intelligent organization. 

In today’s environment, boards are scrutinized by regulators, shareholders, the media and analysts. Therefore, everyone in your organization must be open, transparent and collaborative. You must also take the time to address your risks with thoughtful action plans.

Volkov Law Group suggests these five steps to prepare for and prevent risk exposure: 

  • Increase the diversity of your board and management team. This will invite broader and differing points of view.
  • Practice due diligence. Choose leaders who are qualified and competent to fulfill their roles and requirements.
  • Share information in a timely manner. Open communication between the layers of leadership will ensure that information is shared and acted on quickly. 
  • Prioritize your risks. You cannot address every known risk, but you can prioritize the most critical ones for your organization.
  • Evaluate your leadership. This will identify strengths in your leadership team that you can capitalize on, and weaknesses that you can work toward improving.

Effective corporate governance and stakeholder management practices can create several benefits for a company and its stakeholders. According to BoardPro, benefits may include:

  • Improved productivity and efficiency
  • Increased transparency and error visibility
  • Faster time to consensus, leading to smoother operations
  • Better performance that leads to reputation-building
  • Better alignment of mission, vision and core values
  • Improved financial sustainability 

To effectively manage your corporate governance risk, your leadership team must actively identify risks and seek ways to reduce them. You must also accept that some risks are inevitable. But you should still consider risk-sharing or risk-reducing measures through outside assistance in your action plans.

integrating governance, risk management and compliance

In the age of government regulation, public focus on corporate responsibility, and third-party business partnerships, you can no longer afford to operate in silos. One approach that many organizations are taking is to integrate governance, risk management and compliance (GRC). 

Historically, these functions have often worked independently of each other. When that happens, individual departments can become reluctant to share information or resources with each other. This results in miscommunication, redundant tasks and an atmosphere of mistrust, all of which hinder your ability to succeed.

The purpose of GRC is to encourage company wide cooperation. This helps you achieve results that meet internal guidelines while reducing risks, costs and duplication of effort.

Investopedia defines the three integrated functions as:

  • Governance — “the overall system of rules, practices, and standards that guide a business”
  • Risk management — “the process of identifying potential hazards to the business and acting to reduce or eliminate their financial impact”
  • Compliance — “the set of processes and procedures that a company has in place to make certain the company and its employees conduct business in a legal and ethical manner”   

GRC will apply differently to every organization, but it usually involves integrating core business functions like information technology, human resources, finance and performance management, according to Investopedia.

corporate governance keeps your organization strong

Corporate governance is a necessary part of any organization. It helps you stay on track with your mission, principles, processes and procedures, and keeps you competitive and ethically sound.  Integrating governance with risk management and compliance streamlines the risk process and opens communication between departments. 

By improving your organizational governance, you can secure your reputation within your industry and community, earn the trust of your employees, solidify your position and keep your organization strong. 

any questions?

In conclusion, strong organizational governance is essential for any organization to operate in a transparent, accountable, and ethical manner and to achieve its goals. It is especially important to regularly review and assess governance practices to ensure they are effective and aligned with the organization’s objectives. By implementing internal controls and processes to monitor compliance with governance policies, organizations can minimize their risk of financial, reputational, and legal consequences. Taking proactive steps to address organizational governance and building a diverse, competent leadership team that promotes open communication and prioritizes risks can help organizations protect themselves and build trust with their stakeholders.

If you have any questions, feel free to reach out to Benchmark or Rob.

homeowners policy

what’s included in a standard homeowners policy?

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Owning a home is likely the largest investment you will make. The benefits are many, including stabilizing your housing costs with a fixed mortgage, gaining equity and taking advantage of tax benefits. How can you best protect your investment? Homeowners insurance is designed to do just that.

Unlike car insurance, home insurance isn’t required by law. You can own a home without a homeowners insurance policy, but only if you bought your home outright and are willing to gamble with such a large asset. If you have a mortgage, your lender will most likely require you to have a homeowners policy.

When considering what is covered under a standard homeowners policy, you may have asked yourself questions like, “Do I actually need more coverage than what is included?” or “Do I need extra earthquake or flood coverage?”

We’ll help you understand what is covered, what is not and whether your current policy is comprehensive enough for your situation.

coverage basics

A homeowners insurance policy exists to protect your home against accidental losses. Standard coverage falls under four areas:

  • Structural coverage pays to rebuild or repair your home due to damage or destruction. It covers damage or destruction due to fire, water and acts of nature, like tornadoes, hurricanes, lightning and hail.
  • Personal property coverage protects your personal belongings in case your clothes, furniture and other personal items are stolen or destroyed. Expensive items like jewelry, art and collectibles are covered as well, but may have dollar limits.
  • Liability protection protects you against lawsuits from injury or damage that you or your family cause to other people. If, for example, your child accidentally breaks a neighbor’s antique dishes, your homeowners policy will cover it.
  • Additional living expenses covers living expenses incurred while you’re living away from home because of damage from a disaster.

Damage resulting from earthquakes, landslides, mudslides and floods is not covered. You’ll need to purchase additional insurance if you live in a flood zone or in an area with frequent earthquakes. If you’re wondering how much structural coverage to purchase, here’s a good general rule: Purchase enough to rebuild your home.

To make sure valuables are covered for their appraised value, consider adding a personal property floater to your policy. Personal belongings coverage extends to items that are stored away from your home too, such as in a storage facility.

Insurance doesn’t include normal wear and tear to your home or to items in your home. For example, if your refrigerator suddenly stops working, water seeps in through a crack in the foundation or your sink begins to leak, you’re responsible for the repairs.

Your liability protection also provides no-fault medical coverage in case a visitor is injured in your home, such as if they twist an ankle on your stairs. If you’re brought to court, liability coverage pays for the cost of defending you in court and any damages you must pay (up to the limit stated in your policy).

what’s not covered

There is a handful of situations other than wear and tear that a standard homeowners policy doesn’t cover, despite the fact that they are somewhat common. These situations include:

  • Dog bites. Some dog breeds known to be aggressive are completely excluded from coverage. Chances are, your dog won’t be covered by your policy if he or she has bitten someone before, even if not considered an aggressive breed.
  • Mold. Some insurance companies will add an endorsement for mold coverage, but you must pay for it. The best way to avoid mold issues is to be aware of moisture buildup in the first place.
  • Pool accidents. A high number of fatalities occur in residential pools, increasing your liability. A policy may include coverage for the pool, but you’ll have to declare it and will likely have to buy additional liability coverage.
  • Sewer backup. Sewer backups can cause major damage to your home’s floors, walls and electrical systems. If you think this could happen to your home, consider buying extra coverage.

While homeowners insurance is designed to protect your home, it’s important to be prepared for any situation that may arise. Talk with your insurance broker about your current coverage and whether your policy meets all your needs.

directors & officers insurance

how much should i pay for directors & officers insurance?

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Running a business comes with its fair share of risks, from the potential for economic downturn to unfortunate lawsuits. One way that businesses can protect themselves against these risks is by investing in Directors & Officers Liability Insurance (D&O). 

This type of insurance provides financial protection for directors and officers, who may be held liable if their decisions lead to financial losses or damage to the company’s reputation.

In this blog, we will discuss the importance of D&O Liability insurance and how much you should expect to pay for coverage.  Read on to learn more about how D&O insurance can benefit your business!

what is directors and officers liability insurance?

Directors and Officers (D&O) insurance is a type of liability insurance policy designed to protect the personal assets of directors and officers of a company, organization or non-profit against losses resulting from claims made by shareholders, employees, consumers or other third parties. D&O coverage can also include legal defense costs associated with defending such claims. 

The purpose of D&O insurance is to encourage company leaders to manage their organizations with confidence, knowing that they will not be held personally liable in the event of a lawsuit or legal action. In some cases, companies may require their directors and officers to maintain personal D&O insurance as a condition of serving on the board or taking on a leadership role. 

Depending on the size and nature of your organization, a D&O policy can provide coverage for:

  • Errors and omissions 
  • Wrongful acts 
  • Cyber liability 
  • Fiduciary liability 
  • And more

Additionally, such policies may cover both current and former directors and officers as well as their heirs in some instances.

Ultimately, D&O insurance provides vital protection for board members, executives, and other key individuals in an organization so that they can confidently pursue their professional endeavors without fear of personal financial loss. It is an essential component of any organization’s risk management plan and should be tailored to fit the specific needs of each company or non-profit.

who and what does d&o insurance cover?

D&O Insurance typically covers individuals, such as directors and officers of a company, for claims related to violations of their fiduciary duties. These policies also typically cover employment practices, wrongful acts, and other liabilities incurred by the insureds while acting on behalf of the organization they serve. More specifically, D&O insurance can cover the cost of defending against alleged criminal, civil and regulatory actions, as well as judgments and settlements. Additionally, D&O insurance typically covers some form of reputational harm protection in the event of a public relations crisis.

When selecting a policy, it is important to understand what kind of coverage is offered by the insurer and how much protection is provided. Typically, D&O policies are written on a “claims made” basis, meaning the coverage is only triggered when the claim is made against the insured during the policy period. It is also important to note that certain exclusions may apply depending on the carrier, such as criminal or fraudulent acts by the directors or officers.

Overall, D&O insurance provides a layer of financial protection for individuals who have been entrusted with the responsibility of leading an organization. It is important to work with an experienced broker to ensure that the policy meets all of your specific needs. With the right coverage in place, you can rest assured knowing that you are well protected.

how much should I pay for d&o insurance?

The cost of D&O insurance coverage varies depending on the size and scope of your organization, its industry, the specific risks associated with it, as well as any additional coverages you may need. Generally speaking, the cost can range from a few hundred dollars to several thousand dollars annually for standard D&O policies. 

 Most companies should commonly expect to pay between $2,000 and $15,000 annually for D&O coverage. Some larger companies may pay as much as $50,000 or more. Depending on the policy you choose, rates can also vary significantly based on the amount of coverage purchased and any additional riders that are added to the policy. 

In some cases, the premium may be higher due to the addition of specialized coverages, such as Employment Practices Liability Insurance (EPLI) or Fiduciary Liability Insurance. It is important to note that the cost of coverage should not be a limiting factor when it comes to protecting your organization’s assets and reputation by purchasing adequate D&O insurance coverage. 

Ultimately, the cost should be weighed against the risks and liabilities a business could face if an officer or director is sued for negligent decisions made on behalf of the company.

In order to get an accurate estimate for Directors & Officers Insurance coverage for your organization, it is best to consult with a professional insurance broker who specializes in this type of coverage. They will be able to assess your organization’s unique risks and exposures, provide recommendations on the most appropriate coverage, and help you obtain competitive quotes from various insurance carriers.  With their assistance, you can make an informed decision about the amount of coverage that best meets your needs at a price that fits within your budget.

the bottom line

Directors & Officers Insurance is an important type of coverage to consider for any business or organization with leadership personnel. By partnering with a professional insurance broker who specializes in D&O coverage, you can ensure that your company is properly protected against the risks associated with negligence by its officers and directors. 

With the estimated cost of several thousand dollars annually, the cost of Directors & Officers Insurance coverage should not be a limiting factor when it comes to protecting your organization’s assets and reputation. Taking all this into consideration, having adequate D&O insurance in place is essential for any business or organization that wishes to sustain its success.

The scope and limits of a D&O policy will vary depending on the type of organization and its needs, so it is important to work with an experienced insurance broker who understands your organization’s specific risk profile. Your broker should spend time with you making sure you understand what is excluded from the D & O coverage form in order to make sure it is right for you.  Reach out to us today to learn more or visit our website to see the commercial insurance we offer!

employer explaining how to promote a safe work environment

how to promote a safe work environment

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As an employer, workplace safety should be one of your top priorities. Not only is it legally required, but it’s the right thing to do. In this blog post, we will discuss some of the basics of workplace safety and how you can promote a safe work environment for your employees. 

We’ll also take a look at OSHA’s requirements for workplace safety and how you can ensure that your business is in compliance. By taking the necessary steps to reduce workplace injuries and hazards, employers can help ensure that their business runs smoothly and safely. Additionally, this will also result in immense cost savings for businesses in the long run.

workplace safety policies 

First and foremost, workplace safety should start with your policies. Make sure that you have a clear workplace safety policy in place that outlines the standards and expectations of workplace safety and how they will be enforced. This policy should include topics such as:

  • Workplace hazards
  • Safe work practices
  • Health and safety training 
  • And more

employee awareness

Ensure that your employees understand and follow the workplace safety policies, and that they are regularly reminded about their responsibility to work safely and report any workplace hazards or accidents. You can also provide regular workplace safety training sessions or seminars to ensure that your employees are up-to-date on workplace safety practices.

OSHA

OSHA, or the Occupational Safety and Health Administration, is a federal agency that sets workplace safety standards. These standards help ensure employers provide safe working conditions for their employees. OSHA also oversees workplace inspections, provides workplace safety training and education, and offers safety incentive programs to encourage employers to prioritize workplace safety.

In order to create a safe workplace for your employees, employers must understand and comply with OSHA requirements. This includes having workplace safety policies in place to:

  • Address common workplace hazards
  • Provide safety training to all new and existing employees
  • Conduct periodic workplace inspections to identify any potential hazards or unsafe conditions

Additionally, employers should look into establishing safety incentive programs. These programs can incentivize employees to practice workplace safety and help create a workplace culture of safety. Employers should also provide frequent workplace safety training so that all employees are well versed in workplace safety policies and procedures.

steps to promote workplace safety

Having workplace safety policies in place and following OSHA requirements are the most basic responsibilities of an employer. Beyond that, there are several ways to promote a safe work environment:

  1. Provide training – Make sure employees have received proper instruction on workplace safety procedures, as well as any other industry-specific hazards they may encounter.
  2. Offer safety gear – Ensure employees have the necessary protective equipment, such as hard hats, goggles, and earplugs.
  3. Perform regular workplace inspections – These can help uncover any potential safety hazards or compliance issues that need to be addressed.
  4. Have a reporting system in place – Employees should feel comfortable reporting workplace accidents or other safety issues.
  5. Develop a workplace safety culture – Encourage employees to share any workplace safety ideas and suggestions.
  6. Offer rewards for exemplary workplace safety performance – This can help motivate employees to take workplace safety seriously and follow safety protocols.
  7. Provide ongoing education – Give employees access to resources that allow them to stay up-to-date on workplace safety and OSHA regulations.
  8. Establish a workplace safety committee – A workplace safety committee can keep everyone informed about workplace safety issues, as well as suggest new initiatives for keeping the workplace safe.
  9. Invest in the latest technology – Investing in the latest workplace safety technology can help prevent workplace accidents and ensure compliance with regulations.
  10. Have an emergency plan in place – Make sure everyone knows what to do in the event of an emergency, such as a fire or earthquake.

By following these steps and promoting workplace safety, you can ensure that your workplace is safe and in compliance with OSHA’s workplace safety requirements. Doing so will not only protect your employees, but also help to minimize workplace accidents and injuries. 

in summary

By taking proactive steps to promote workplace safety, employers can not only keep their employees safe but also protect their business from potential lawsuits or other legal consequences. Workplace safety is not an option; it’s a requirement. Taking the necessary steps to ensure workplace safety can help employers stay compliant with regulations and create a safe workplace for everyone. 

Learn more by reading our blog about how increasing workplace safety can help reduce insurance costs for your business.

insurance for e-bikes

e-bikes: responsibility and danger

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As e-bikes become more popular, the danger to both the rider and those around them also increases. While these bikes can be a great way to get around town, it is important that riders take responsibility for their actions and are aware of the dangers they present.

In this blog post, we will discuss some of the dangers associated with e-bikes and what riders can do to stay safe while enjoying this new form of transportation!

what is an e-bike?

An e-bike, or electric bike, is a bicycle equipped with battery power motors to aid with pedaling (either partially or completely depending on the bike).

In the state of California, electric bicycles can be classified according to their top speeds and type of assistance they provide. 

  • Class 1 e-bikes are powered solely through pedal-assistance, with no throttle option and a maximum speed of 20 mph.
  • Class 2 electric bikes feature both pedal-assistance and a throttle, also reaching a top speed of 20 mph.
  • Class 3 e-bikes offer pedal-assistance only, no throttle, but can reach a maximum speed of 28 mph.

e-bike dangers

E-bikes provide an exciting new way to get around town, but they also come with certain increased risks of injury that include: 

Speed 

E-bikes often have powerful electric motors that can propel them at higher speeds, making it easy to lose control if the rider is not careful. Because e-bikes can go faster than traditional bikes, riders may be more likely to suffer from road rash or other injuries if they crash. 

Weight

E-bikes tend to be heavier than traditional bikes, meaning they have more momentum and require a longer stopping distance. This can be dangerous if the rider is not prepared for sudden stops or has poor visibility of their surroundings. So riders may be more likely to suffer from musculoskeletal injuries if they fall off or are involved in an accident. 

Technology 

Since e-bikes have lithium ion batteries, riders may be at risk of electrical shocks if the batteries are damaged. Like any vehicle, electric bikes can malfunction or be subject to defects. It’s important for all riders of electric bicycles to make sure their bike is regularly serviced and maintained according to manufacturer guidelines in order to ensure their safety. 

To reduce the risk of an accident, riders should pay attention to their speed and make sure to obey the local laws. Additionally riders should always wear a helmet and exercise caution when navigating busy streets or other areas with traffic.

e-bike rules and regulations

Riders also need to be familiar with the laws and regulations regarding e-bikes in their area in order to stay safe on the road. Many states and cities have different laws regarding electric bikes, so it is important that riders know the rules before taking their e-bike out for a ride. Additionally, riders: 

  • should never ride an e-bike if they are under the influence of drugs or alcohol
  • must be mindful of the potential dangers posed by other riders on the road 
  • need to be aware that pedestrians, vehicles, and other e-bike riders can all present hazards to the rider 
  • should always be aware of their surroundings and take extra care when overtaking or being overtaken by another rider

It is important to remember that when operating an e-bike, rider responsibility and caution are key. With the right knowledge, riders can enjoy this newer form of transportation while staying safe and responsible!

e-bike laws and regulations in california

In California, e-bike riders must be at least 16 years old, and must wear a helmet when riding an e-bike.

The California Vehicle Code states that e-bikes are not allowed on public roads with speed limits over 25 mph, sidewalks, or bicycle paths—unless the e-bike is classified as low-speed. Additionally, e-bikes must have functioning brakes and lighting systems when used at night.

It is important for e-bike riders to remember their responsibility and the potential danger of riding an e-bike. E-bikes are powerful machines that can accelerate quickly and reach high speeds—which means they require extra caution when traveling in traffic. Riders must obey laws, signs, and signals to ensure the safety of all nearby riders, pedestrians and drivers.

Riders should plan their route ahead of time by following bike routes where possible, and they should always ride defensively. By following safety precautions and e-bike laws and regulations in California, riders can have an enjoyable yet responsible experience on the roads!

safety guidelines for riding an e-bike

Riding an e-bike comes with risks and responsibilities. To ensure that you are safe and responsible on the road, keep these guidelines in mind:

  1. Wear a Helmet – A helmet is essential to protect your head if you were to accidentally fall off your e-bike. Additionally, it is important to make sure your helmet fits properly as an ill-fitting helmet will not provide adequate protection.
  2. Follow Traffic Rules – As with any vehicle, it is important to stay aware of your surroundings and follow traffic rules such as speed limits, stop signs, and red lights.
  3. Don’t Ride Too Fast – Riding too quickly can make it difficult to react quickly in case of an emergency. Make sure you are aware of potential obstacles on the road and ride at a reasonable speed.
  4. Follow Rules for Paths and Trails – If you are riding your e-bike on a path or trail, be sure to follow all posted rules and regulations. Additionally, when passing other riders, make sure to give them plenty of space.
  5. Have the Right Equipment – Make sure that your e-bike is fitted with the proper equipment for riding such as lights and reflectors for visibility. Also, it’s a good idea to inspect all components of your e-bike before each ride to ensure everything is in working condition.
  6. Be Aware of Your Surroundings – When riding, it is important to be aware of potential obstacles such as potholes, rocks, and other objects that may not be visible. Be mindful of traffic around you and the direction in which it is moving.
  7. Dress Appropriately – To ensure your safety while riding an e-bike, it is important to dress appropriately. Consider wearing clothing with reflective strips, brightly colored clothes, gloves, long pants, and closed-toe shoes that provide adequate protection.
  8. Don’t Ride Under the Influence – Riding an e-bike while under the influence of drugs or alcohol is dangerous and illegal in most places. Avoid riding when impaired for your own safety and for those around you.
  9. Be Aware of the Battery Life – Make sure that your e-bike battery is fully charged before you start riding. Furthermore, be aware of how far you can travel with the current charge and plan accordingly.
  10. Be Aware of Electric Components – Be sure to stay away from any wires or electric components on your e-bike when charging it or making repairs. Never ride with any exposed wires or faulty parts that could create a hazard.

These safety guidelines can help ensure that you are riding your e-bike responsibly and safely. Enjoy your ride!

final thoughts

By following the safety guidelines outlined in this blog post, riders can enjoy all that e-bikes have to offer while staying safe and taking responsibility. E-bikes can be a wonderful way to get around, but riders must take the time to familiarize themselves with the potential dangers they present in order to keep themselves and those around them safe.

In short, it is important for all e-bike riders to always obey traffic laws, plan ahead, and remain aware of their surroundings while on the road. By doing so, they can minimize the risks of accidents and ensure a safe ride for all.

At benchmark, we recommend insuring your e-bike for an extra layer of protection. Reach out to us or read about e-bike insurance coverage on our blog to learn more. 

water damage going into home

water damage exclusions

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Water damage is one of the most common hazards faced by homeowners, and it is also one of the most common exclusions in homeowners insurance policies. Water damage can occur due to a variety of causes, including floods, storms, burst pipes, and leaks. 

While some water damage may be covered by your homeowners insurance policy, most policies exclude coverage for certain types of water damage, such as flood damage. Are you wondering whether your policy covers water damage? Let’s discuss these water damage exclusions and what they mean for your homeowners insurance coverage.

water damage

Water damage is one of the most common claims made on homeowners insurance policies. In most cases, however, homeowners insurance will not cover water damage that is caused by gradual deterioration or poor maintenance. Be sure to check your policy carefully to see what is and is not covered.

Water damage can be very costly to repair, so it’s important to have adequate coverage in place. Otherwise, you could be left having to pay for repairs out of your own pocket. 

what is considered water damage?

Some common causes of water damage that may be covered by homeowners insurance include:

  • Burst pipes
  • Severe weather (flooding, storms, etc.)
  • Leaky roofs
  • faulty appliances
  • Plumbing leaks

Again, it’s important to check your policy to see what is and is not covered. But in general, if water damage is caused by a sudden and unexpected event, it’s likely that your homeowners insurance will cover at least some of the costs.

what are water damage exclusions in most home insurance policies?

Water damage exclusions are common in home insurance policies. Water damage is typically excluded from coverage unless it is caused by a covered peril, such as a burst pipe. Other common exclusions for water damage include flooding, sewage backup, and water that seeps through the foundation. Check your policy documents to see what specific exclusions apply to your policy.

why are there exclusions to my water damage coverage? 

There are a few reasons why your home insurance policy might exclude water damage. One common reason is that the damage was caused by flooding, which is typically not covered by home insurance. 

Another reason might be that the damage was caused by something called “seepage and leakage.” This is when water slowly leaks into your home through cracks or holes, and over time, this can cause significant damage. 

Home insurance policies typically exclude this kind of damage because it is considered to be preventable.

Finally, some policies exclude water damage caused by sewage backup or flooding from an outdoor swimming pool.

why is flooding not covered in homeowners insurance?

Flooding is not covered in homeowners insurance because it is considered to be a natural disaster. Homeowners insurance policies cover damage from events that are considered to be accidental, such as fires or burglaries. Floods are not considered to be accidental, and therefore are not covered by most homeowners insurance policies.

Some homeowners may purchase a separate flood insurance policy to cover the cost of damage from a flood. However, even with flood insurance, there may be some costs that are not covered. For example, most flood insurance policies have a deductible, which is the amount that the policyholder must pay before the insurance company will begin to pay for damages. 

In addition, flood insurance may not cover the full cost of all damage that occurs. For example, it may only cover the cost of repairing the structure of the home, and not the cost of replacing personal belongings that were damaged or destroyed.

how to avoid water damage exclusions

The best way to avoid having water damage excluded from your homeowners insurance policy is to take proper precautions to prevent it from happening in the first place. This includes things like regularly maintaining your gutters and downspouts, as well as notifying your insurance company right away if you experience any water damage in your home. By taking these precautions, you can help to ensure that your homeowners insurance policy will cover any damage that does occur.

a final word

It’s important to be aware of the potential exclusions in your homeowners insurance policy when it comes to water damage. By knowing what is and isn’t covered, you can be better prepared financially in the event of a flood or other water-related disaster. Keep in mind that every policy is different, so be sure to read yours carefully and contact an agent with any questions.

At benchmark, we recommend getting the highest possible limit available to ensure you are covered from costly damages.

If you’re not sure whether your home insurance policy covers water damage, reach out to us. We can tell you what is and is not covered and help you protect your home.

insured learning how to reduce insurance cost

how to reduce your insurance cost

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If you’re like most people, your insurance has recently gone up with seemingly no explanation. However, your insurance premiums could be increasing for a number of reasons (but more on this later!). 

This leaves many insureds asking, “how can I reduce my insurance cost?” Check out the video below for tips from benchmark’s own Rob Cohen on what you can do to reduce your insurance cost.

Now, let’s take a quick look at why insurance rates are rising.

why are insurance premiums increasing?

D&O, EPLI, Property, General Liability, and Umbrella policies are all going up 15% to 30% year over year.

Below are some factors causing increased insurance costs:

  1. Increased Risk Factors. The rezoning of certain open areas as high-risk fire zones has increased carriers’ perception of risk and therefore, is driving up prices.
  2. Re-insurance. Insurance carriers purchase insurance similar to a policyholder. However, due to consistent years of catastrophic losses, the availability has been restricted and costs to insurers has increased.
  3. Labor Shortages. Changes in immigration law, in combination with stricter criteria for classifying 1099 vs. W-2 workers, have added to the labor shortage post-pandemic markets are experiencing.
  4. Supply Chain Disruption. Shipping routes are overrun, ports are backlogged, shipping containers are in short supply, and trains are delayed causing domino-like effects to businesses. With increases in cost and time to deliver goods comes an increased risk of in-transit losses and loss of business market share.
  5. The Pandemic. With all of the increased insurance claims from COVID-related closures, insurance companies have paid out millions in unanticipated claims.
  6. Inflation. Property values are soaring and insurance premiums are along for the ride. Insurers have become picky about whom they will insure, causing an increase in policy movement from broker to broker and carrier to carrier. 
  7. Increase Cyber Threats. Office-level security firewalls are not present with people working from home. This, in combination with the widespread usage of online payment options in more businesses, has raised the cost of cyber liability coverage.

These seven cost increases are complicated, global, and not going anywhere. Want to know what you can do to get your costs down? 

how to lower your insurance cost: according to rob 

One of the questions Rob gets asked most is, “-what can I do to reduce my insurance cost?” 

We first have to look at what line of coverage you want to reduce the most. “Property and general liability premiums and rates are fairly static in that they are dependent upon location.”  

If your business resides in a wildfire zone, there’s really nothing you can do to reduce the cost of that insurance. 

remapping of “fire zones”

To a carrier, all insurance companies have become keenly aware of what they now consider fire zones, as well as the concentration of insured value that resides within these zones.

Both commercial and residential insures have undergone varying degrees of re-evaluating what they now consider to be locations residing in, or adjacent to, a newly established fire zone. You may have had friends, or even neighbors, complain of non-renewal notices they received from their current insurer.

Again, to a carrier, underwriters refuse to discuss any type of exception we may want to make regarding their “fire-zone” evaluation. Each carrier has determined, through their re-insurance treaty with their re-insurance carrier, what they are allowed or not allowed to write.

They will not make exceptions for any policyholder, which means remapping for fire zones has forced many policyholders back into the market due to the non-renewal of many policies. This is a market with a limited supply.

insurance you can reduce

Rob explains that “-if we’re talking about employment practices liability, directors and officers liability, cyber liability, many of the underwriters will dig into the underwriting and look for things like current employee handbooks, proper employee policy and procedure disclosures. 

On the directors and officers liability side, they look a lot now. On directors and officers liability, underwriters dig into the financials of the insured. They want to make sure that the business is running well and economically sound. 

On cyber liability, the underwriters want to understand more about how you are protecting your electronic systems. So these things should be discussed and reviewed with your broker.”

If you have any questions, feel free to reach out to Benchmark or Rob. 

A male teenager sitting on a curb, dialing on his phone with a wrecked car in front of him

what is vicarious liability?

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Vicarious liability, sometimes called imputed liability, is a legal concept that extends responsibility for one person’s actions to another person.

This other person does not have to be directly responsible for the incident — they only need to have a business, organizational or family connection to the person who committed the act.

Examples of vicarious liability include:

  • When an employer is held accountable for the actions of one of its employees
  • When individual business partners are held liable for the actions of fellow partners
  • When parents are considered responsible for the negligent acts of their children or other people’s children while under their supervision
  • When directors and officers are held accountable for acts committed while they were performing duties on behalf of a corporation

why is vicarious liability applied?

The concept of vicarious liability rests on the legal doctrine called “respondeat superior,” a Latin term meaning “let the master answer.” Essentially, it shifts responsibility for negligence, libel, wrongful conviction and other civil complaints to the individual or organization that is assumed to be senior in the relationship.

The primary reason for invoking vicarious liability in a lawsuit or insurance claim is to shift the burden of payment to the party who is considered most likely able to cover the legal expenses, medical costs, or settlements or judgments that result.

how is vicarious liability justified?

Business owners, parents and organizational leaders are given the assumed right to control the actions of those they supervise. These leaders have a legal duty to maintain a safe environment and train or educate on proper behavior and skills.

Because of this presumed control, they can be considered at fault if the person under their supervision fails to perform their duties appropriately, damages another individual’s property or causes physical harm to someone else.

With regard to businesses, this responsibility is in effect only when the employee is on the clock and working within their scope of employment.

This can be a somewhat disputable definition. For example, an employee can be involved in an accident on their way to work or at an after-hours social event. Therefore, the courts have developed more definitive guidelines to clarify vicarious liability.

  • Most states exclude incidents that occur during an employee’s commute to or from work. Exceptions may be made when an employee’s personal car is used as part of their job, such as for on-site client visits, or if an accident occurs when an employee’s car is being used for a work-related errand.
  • If a company-sponsored social event is mandatory or the employer benefits from the employee’s attendance, the employer could be held vicariously liable for a related incident. An example might be an employee who is involved in an incident at a client networking event, especially if alcohol was served.
  • If an employee is involved in an incident while completing a personal errand but that personal errand was carried out during a job-assigned task, the case will be reviewed to see how it relates to a legal concept called “frolic and detour.”
    • A frolic is a major departure in either time or distance traveled from the assigned work responsibility.
    • A detour is only a minor departure.
    • The assignment of vicarious liability depends on when the incident occurred — during a frolic, which is considered off the clock, or a detour, which is considered on the clock.
  • Any time a business-owned vehicle is used, whether by an employee or a nonemployee, vicarious liability is typically admissible in a claim or lawsuit.

what about independent contractors?

Typically, independent contractors are held solely liable for their own negligent acts. However, there are some exceptions:

  • If the contractor chosen is considered incompetent or not suitable for the task, the contracting organization could be sued based on negligent hiring.
  • If the contracted work is inherently dangerous, the employer retains primary responsibility.
  • If the business passes responsibilities it isn’t legally able to delegate to a contractor, it can be held liable. This is most often related to workplace safety issues but may also include other issues of supervision and leadership.

protecting yourself and your organization from vicarious liability

While you may be unable to fully control the actions of others, you can control how you protect your assets. An agent or broker who specializes in liability insurance can help you address your risk of vicarious liability with a range of insurance options.

These may include small-business liability policies, general liability coverage, commercial auto, professional liability (errors and omissions), workers’ compensation, directors and officers insurance, and other policies that can help with any legal fees or expenses related to a claim that invokes your vicarious liability.

When appropriately designed, these same policies can also protect your employees and other related individuals. Reach out to us to learn more.



A billboard with work safety elements written on different pieces of paper, pinned to it.

increase workplace safety and decrease insurance costs

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​​Workplace accidents happen more often than we would like to think. In fact, according to the National Safety Council, there are about four million worker’s compensation claims filed every year in the United States. That is a lot of people who are injured on the job! Fortunately, there are ways that we can decrease these numbers.

 

Workers’ compensation insurance protects your business from claims by employees who are injured at work. The cost of not having workers’ compensation insurance can be much higher than the cost of investing in it. This might be the motivation you need to start considering your options.

 

In this blog post, we will discuss how increasing workplace safety can help reduce insurance costs for your business.

how to improve safety 

As the cost of healthcare continues to rise, so do worker’s compensation claims. In fact, worker’s compensation costs have increased by over 50% in the last decade. This is a significant expense for businesses, and one that can be decreased by increasing workplace safety. 

 

Steps to improve workplace safety :

  • Conduct a hazard assessment to identify potential risks in the workplace.
  • Train employees on proper safety procedures.
  • Implement safety measures such as guards, barriers, and signage.
  • Inspect equipment and work areas for hazards on a regular basis.
  • Invest in personal protective equipment for employees.

 

By taking these steps to increase workplace safety, you can help to reduce worker’s compensation claims and improve the overall health and well-being of your employees. A safe workplace is a happy workplace!

 

Not only will increasing workplace safety help to decrease worker’s compensation claims, it will also help to improve morale and productivity. Employees who feel safe in their work environment are more likely to be engaged and productive as well. 

how to handle an employee injury

First and foremost, ensure that the injured employee receives proper medical care. Then:

  • Notify your worker’s compensation insurance carrier as soon as possible.
  • Fill out any required paperwork and documentation.
  • Work with the injured employee to create a return-to-work plan.

 

If an employee is injured on the job, it is important to take quick and appropriate action. By following the steps above, you can help to ensure that the injured employee receives the care and support they need. 

how to handle an employee claim

Steps to handle the claim with your worker’s compensation insurance carrier :

  • Notify the insurance carrier as soon as possible.
  • Cooperate with any investigations that they may conduct.
  • Provide any requested documentation in a timely manner.

 

If an employee is injured on the job, you will need to file a worker’s compensation claim with your insurance carrier. It is important to notify them as soon as possible and to cooperate with any investigations that they may conduct. By taking these steps, you can help to ensure a smooth and efficient claims process.

 

After an employee files a worker’s compensation claim, it is important to work with your insurance company to investigate the claim and identify any areas where you can improve safety in the workplace. By taking action to prevent future accidents and injuries, you can help to reduce worker’s compensation costs for your business.

a final word

By implementing safety measures such as regular safety training, hazard identification and mitigation, and safety equipment, you can decrease the number of workplace accidents and injuries.

 

Implementing these safety measures will help to reduce workplace accidents, improve morale, and save your business money. Worker’s compensation claims can be expensive, but by increasing workplace safety you can decrease the number of claims filed and save your business money. 

 

If you have any questions about how to increase workplace safety, or if you would like more information about worker’s compensation claims, please contact us today. 

Two blue toy cars crashing headfirst with stacks of coins behind them.

auto insurance – the EPIC payouts are costing YOU

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As the world starts to return to normal following the pandemic, auto insurers are facing a tough road ahead. With people staying home and working remotely, there were far fewer miles driven during the pandemic. This led to a drop in auto losses and insurance payouts.

 

Now that things are beginning to open back up, people are starting to drive more again. However, due to Proposition 103, which bases auto premiums on mileage-driven, insurers will be struggling to keep up with demand. So while the post-pandemic landscape may look promising for some industries, auto insurers unfortunately have a long road ahead.

 

In this blog post, we will discuss what’s happening in the auto insurance industry and how it may financially impact both the insurer and the insured. 

the current state of auto insurance

Carriers are now struggling to catch up with insureds and get adequate rates in light of increased exposure. Other factors such as supply chain issues, labor shortages, and increased wages have caused claim costs to rise, while vehicle repair times have more than doubled. As a result, both new and used vehicle prices are at all-time highs, resulting in increased costs when vehicles are totaled in an accident.

what does this all mean?

This means that auto insurance carriers will have to find ways to cut costs and increase efficiency in order to stay afloat. One way they may do this is by increasing the use of technology, such as telematics, to help them better assess risk. They may also move towards a more pay-as-you-go model, where customers are only charged for the amount of coverage they actually use. Whatever changes auto insurers make in the post-pandemic landscape, one thing is for sure: they will need to be adaptable and agile in order to survive.

how are auto insurers coping?

Auto insurance companies have requested 15-20% rate increases in order to maintain profitability, but the Department of Insurance has refused to grant these requests. As a result, many carriers are struggling to keep up with rising costs. Some carriers have been told by the DOI not to bother filing for any rate increases, as they are unlikely to be approved. This lack of approval has been going on for two years now. Consequently, auto insurance rates have remained stagnant during this time period.

what does this mean for consumers? 

These changes mean that auto insurance rates are likely to remain unchanged in the near future. And right now, premiums are at an all-time high. This is good news for those who are already struggling to pay their premiums. However, it also means that insurers will continue to struggle to pay claims, which could lead to longer wait times for repairs and other services.

 

Auto insurance companies are struggling right now because they are having to pay out more money in claims than they are bringing in through premiums. This is especially true for policies that were written recently since insurers didn’t collect the full premium upfront. To try to fix this, some auto insurers have stopped writing new policies altogether, at least through independent agents.

the issues at hand 

This is a problem because people who need auto insurance still need to be able to get it. Hopefully, this will all be sorted out soon so that everyone who needs auto insurance can get it again without any trouble.

 

One carrier shared that the loss ratios on first-year written policies, starting with policies written in the month of January through the month of June, were 121% 128% 120% 128% 115% 118%. This means that for every dollar that was collected in premiums, the insurance company had to pay out $121-$128 in claims. So they are losing money on these policies. 

 

The auto insurers are facing higher payouts, and they will need to recoup those losses somehow. And that means that these huge payouts are costing consumers in the long run. Premiums are likely to stay high to compensate for the increased payouts. At the same time, insurers are taking much longer to issue these payouts while they adjust to post-pandemic challenges. 

the future of auto insurance

First-year auto insurance policies always run a higher loss ratio because the premium is not collected upfront. That is why we’ve seen so many carriers require payment in full on new policies.

 

Some insurers have tried to fix this problem by requiring that people pay the full premium upfront when they get a new policy. But this was rejected last week by the DOI (Department of Insurance).

 

Some auto insurance carriers are trying to make it harder to write new business by only allowing quotes and new policies to be written on their own websites. This is because they want people to buy less auto insurance, or stop buying it altogether. 

final thoughts

During the pandemic, people drove less because they were staying home. This meant that there were fewer accidents and insurance companies had to pay out less money. Now that the pandemic is mostly over, people are driving more and insurance companies are having to pay out more money again. Insurance companies are also having to pay more for repairs because it’s taking longer to get parts and labor is more expensive. So all of this together means that auto insurance rates will likely stay high.

 

Despite these challenges, auto insurers are still committed to providing coverage for their customers. They are working hard to ensure that claims are processed quickly and efficiently and that rates do not increase too much. The pandemic has been a difficult time for everyone, but auto insurers are doing their best to keep the roads safe for all of us.

 

Reach out to our team if you have any questions or concerns regarding auto insurance.