Tag Archive for: Coverage

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. 

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. 

water damage is one of the top insurance losses for businesses

why water damage is a top insurance loss 

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Last year, over 500,000 water damage claims were made after Texas experienced a paralyzing winter storm that burst pipes and caused water damage.

 

Water damage is the second most common insurance claim, trailing closely behind wind and hail damage claims. Last year, over 500,000 water damage claims were made after Texas experienced a paralyzing winter storm that burst pipes and caused water damage. Let’s discuss why water damage is a top insurance loss, and what this means for you. 

what is commercial water damage?

Commercial water damage is water damage that impacts your commercial building. It’s one of the most frequent and expensive claims small businesses face. According to The Hartford, about 75% of insurance losses come from water leaks. 

 

Losses due to a high volume of water damage claims are thought to be contributing to the rise in insurance premiums. A recent Forbes statistic found that one in fifty insured property structures will submit a water-related incident each year. These claims cost on average $11,098. 

top causes of commercial water damage

Commercial water damage can come from a variety of sources. Make sure you monitor your building and know the places where water damage can occur so you are prepared if it does. Here are a few things to look for when inspecting your building:

1. damaged roofs 

Damage from the elements or lack of maintenance to replace missing shingles can allow water to cause further damage to your building. 

2. broken or damaged pipes

Broken or damaged pipes are one of the main ways commercial properties experience water damage. Pipes can burst or become damaged causing a leak from freezing temperatures, poor building, or old age. Signs there is water damage from broken pipes are noticing water stains on the walls, floors, ceilings, or through musty smells. 

3. damaged windows 

Windows that are not properly sealed let moisture into the building which can cause mold, warmed or damaged wood, and more. Continued building maintenance can check your windows to make sure they are properly sealed and maintained.

4. damaged HVAC system 

Over time, the HVAC system can become weathered or damaged, causing a leak. Frequent maintenance of your HVAC system can keep your building safe from this type of water damage. 

5. weather or natural disasters 

Water damage often occurs from weather or natural disaster, which is more challenging to control. Weather can cause damage to your building, even with the proper precautionary steps in place. Having a building with sufficient drainage systems and a disaster plan is one of the best ways to help prevent water damage. 

6. leaking sprinkler 

Like damaged pipes, your sprinkler system can freeze, leak or break– causing water damage. Signs of a leaking sprinkler could be wet walls, carpets, mold, or musty smells. Be sure to keep up with regular maintenance and inspection schedules for your sprinklers to prevent accidents like this from occurring. 

how can you protect your business from water damage?

Water damage is not always unavoidable, however, you can take steps to make sure your building is fully equipped to avoid damage. One of the best ways to protect your business from water damage is with your water damage insurance policy. A policy that covers water damage helps with the financial liability costs. Be sure you understand the terms and conditions within this policy to better understand where you may be liable for costs.

 

Another way you can proactively protect your building from water damage is by implementing routine maintenance of your building so you’re not caught with a costly leak in the future. 

 

Ways to do so are: 

  • Replace traditional hot water heaters every 10 years – (this is a major cause of water losses)
  • Use an antifreeze fire sprinkler system 
  • Perform precautionary risk management to protect structures and BPP
  • Wrap/insulate outdoor and indoor pipes in unheated areas
  • Seal building cracks around water pipes where they enter structures
  • Check areas requiring building insulation and repair
  • Increase insulation where needed
  • Maintain heat at a minimum of 55 degrees Fahrenheit during colder months
  • Drain and winterize plumbing lines during the off-season (seasonal risks)
  • Install heat monitoring devices alerting a central station if the temperature in a building falls below 55 degrees
  • Install an automatic leak detection or automatic water shut off system
  • Use stainless steel braided hoses instead of rubber
  • Have a qualified plumbing contractor evaluate plumbing annually and repair as needed
  • Provide detailed instructions for employees or tenants on what to do if they see a water leak
  • Require regular offseason checks in each unit (Condominium Buildings)

 

The risks of water damage are high, which means it’s important to take the proper steps to mitigate that risk.  According to Kelly Greene at Chubb, “commercial buildings are six times more likely to be damaged by water versus theft, and water damage is seven times more likely than fire.”

 

If your business already has a water damage insurance policy, the best practice is to review and understand that coverage. Sometimes to coverage you have does not align with the coverage you need for your specific business. Trust us, being prepared now will have the future you saying “thank you.”

 

For more resources on water damage insurance and property insurance, read our article here.  

water damage is a top insurance loss. protect your business

earthquake insurance: shaken not stirred

earthquake insurance: shaken not stirred

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Do You Need Earthquake Insurance?

Your home and your business are some of the largest investments you will ever make.

California is known as a hotspot for earthquakes. With multiple fault lines running through the state, it’s no wonder that earthquake insurance costs can be so pricey. In both personal and business insurance planning, it’s important to ask, “Do I need earthquake insurance?” 

Unfortunately, most business and homeowner insurance packages do not include earthquake coverage, and investing in earthquake coverage can be costly. 

Southern California, specifically, is typically at high risk for experiencing earthquakes. Earthquakes with a magnitude of 6 or greater may cause serious damage to areas that are densely populated. 

How can you begin to prepare for an earthquake before it occurs? Do you have a disaster plan ready to go? Want to improve your earthquake preparedness? Read on for more.

how much does earthquake insurance cost? 

Most homeowner and business insurance policies don’t cover earthquake damage, you will need to invest in an added layer of protection. Earthquake coverage is offered as a separate coverage option, in which you pay based on your location’s risk. If you’re in Southern California on the San Andreas fault line, your earthquake insurance costs will be much higher than if you’re in a lower risk area, far from any kind of fault line. 

The NAIC states “the deductible for earthquake insurance is usually 10%–20% of the coverage limit. For example, if your home is insured for $200,000, a 10% deductible would be $20,000.”

what isn’t covered with earthquake insurance

As we mentioned above, most homeowners insurance fails to cover earthquake damage. Earthquake insurance is recommended if you live in an area that has a high risk of experiencing an earthquake.  This coverage includes structures close to the house (i.e. a garage or shed).

As you look to invest in earthquake insurance, it’s important to understand where you may still need additional coverage.


Most items not covered under earthquake insurance, are surrounding what could occur after an earthquake occurs. For example:

  • Fires
  • Flooding
  • Vehicle damage

Damage to land is also not typically covered under your earthquake insurance. For example, if the earthquake caused a sinkhole to appear, that cost would not be covered by your earthquake insurance.

how your premium is determined

At the end of the day, your insurers determine your premium. There are a few factors that will impact your premium: 

  • Your home’s location
  • The age of your home
  • The construction of your home
  • The cost to rebuild your home
  • The deductible

How to stay protected

There are a few steps you can take to begin limiting the risk associated with earthquake damage to your business and your home, which can in turn lower your insurance premium.

earthquake survival kit

Start with an earthquake survival kit. Your office or home could be without electricity, internet, phone, water, gas, and sewage services when an earthquake hits. The American Red Cross gives a few items that should be included in your earthquake survival kit:

  • Water: A two week supply of a gallon per person
  • Food: Things that are non-perishable and easy to make
  • Flashlight
  • Battery-powered radio
  • Batteries
  • First Aid Kit
  • Any medications or medical items
  • Multi-purpose tools
  • Sanitation and personal hygiene items
  • Personal documents: Medication lists, medical information, address, lease or deed to your home, passports, birth certificates, insurance
  • Cell phones and chargers
  • Emergency contact information
  • Cash
  • Emergency Blanket
  • Map of the surrounding area

Inform staff and family

Host regular staff meetings to discuss how your team can stay safe during an earthquake. Be sure everyone knows to drop, cover, and hold during an earthquake and proceeding aftershocks. 

It’s important that they know that underneath furniture and against walls are likely the best places to be. Be sure to inform everyone to steer clear of windows and bookcases or large pieces of furniture. 

All frames, mirrors, and large cabinets should be anchored to their foundation. Gas appliances and water heaters should be secured with wall studs.

retrofitting your property

One of the best ways to tackle your earthquake risk is to retrofit your property. As mentioned above, it’s important to have large furniture anchored down, and secured in case an earthquake does occur. Here are a few ways to get started retrofitting your property to decrease your risk of injury during a natural disaster.

  • Bolting down bookcases, dressers, and televisions. Securing these heavy items, as well as other heavy items throughout your home can reduce property damage, and reduce the risk of injury during an earthquake.
  • Secure and brace the water heater to the dwelling frame.
  • Install automatic gas shut-off valves.

If you want to go even deeper into retrofitting your home, here are a few things you can do: 

  • Anchoring your house to the foundation through seismic bolting. 
  • Install bracing to cover cripple walls (in the space between the foundation and the floor where the crawl space is) with plywood. 

next steps

We at benchmark commercial insurance company can assist you in finding the right coverage for your specific business and personal needs. With insurance costs rising, it’s important to understand ways in which you can start to stabilize or reduce your insurance costs, read one of our recent blogs, here.

Cyber Security: Looking Forward to 2022

cyber security: looking forward to 2022

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In July 2020, we all saw the ramifications of a well-performed hack. Twitter experienced the most catastrophic security breach in their company’s history. Elon Musk, Barack Obama, Joe Biden, Bill Gates, and other high-profile Twitter users were all among the hacked users.

This hack caused Twitter to shut down all verified blue-checked accounts. In just a few short hours, this breach of security cost Twitter users more than $118,000 and the company even more in their reputation.

This was more than three months ago. So, what does this mean looking to the new year? 

With most business and social interactions moving toward technology-centered avenues, this can be troubling for business owners. Some questions to keep in mind moving forward:

  • What will your company do if this happens to you? 
  • Did the global pandemic and stay-at-home orders make you more vulnerable to potential cyber-attacks? 
  • How can you protect yourself and your company? 
  • What cyber security regulations are being put in place for 2022? 

Let’s explore.

Consider Investing in Cyber Insurance 

Cyber insurance covers the expense incurred due to a data breach, virus, or other cyber-attacks and fraud. It can also cover legal claims that come from a security breach. As companies utilize cloud software, personal computers and laptops, and other technology-based means to store their sensitive data, their risk for a security breach grows exponentially.

The Identity Theft Resource Center claims that in 2018 businesses experienced 571 breaches in security, which exposed 415 million employee and customer records. 

When you do experience a breach as a company, federal law requires you to perform an extensive list of to-dos. If you have cyber insurance coverage, however, your carrier will take that responsibility on.

2022 Changes

The United Nations (UN) provides information about their role in upcoming cyber attacks. One of the main adjustments for the future is the role that automated systems play in cars. Your Tesla could be a risk moving forward (the report highlights passenger cars, vans, trucks, and buses).

The higher risk associated with “connected” cars is another reason cyber security is crucial moving into 2022.

How Has Your Business Become More Vulnerable?

As businesses moved to a new work-from-home model, cyberattacks increased. With most company communication done through e-mail, Slack, and other online platforms, the risk of a breach increases. This could cause a company to experience massive monetary loss as well as reputation damage. 

Signs You’re at Risk of a Experiencing a Cyber Attack

  • You’re receiving requests for transactions, like direct deposits or electronic fund transfers
  • Unsolicited communications are coming through from unknown companies or people
  • Links within the email do not match—check links by rolling your cursor over the link to see if the two match with the content and the email address!
  • Requests with a high sense of urgency, asking you to complete documentation immediately
  • Requests for usernames, passwords, and other personal details like banking information

What Can You Do to Help Mitigate This Risk?

  • Limit your use of large email attachments and programs that put pressure on your company’s bandwidth ecosystems
  • Do not forward emails with attachments that contain highly restricted or company confidential information to personal accounts
  • Avoid reading, talking about, or leaving confidential information in unsecured work-from-home areas
  • Log-off of work devices when you’re not using them
  • Shred sensitive documents
  • Restart your computer regularly

These tips along with the added security of cyber insurance should prepare your business for potential cybersecurity breaches. Learn more about how cyber insurance can help your company today. Contact us at Benchmark to see how we can partner.

And if you’re wondering why your insurance premiums have skyrocketed recently, learn why here.

 

Cyber Security Coverage in the Age of Ransomware

cyber liability

benchmark umbrella insurance coverage

how much should I pay to insure my business?

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With insurance costs rising, you may be looking at your insurance costs wondering how much you should really be paying in insurance. This largely depends on your industry and the risks associated with your particular business, however, there are some standards that help give you a rough estimate!

Typically business owners spend between 1-3% of their revenue on insurance coverage. A lower-risk business might be closer to the 1% range, whereas a higher-risk business would be around 3%.  The highest-risk businesses can invest as much as 5% of their annual revenue in insurance coverage to offset the possibility of catastrophic losses.

The risk factors that contribute to higher insurance costs include: 

Your Industry

Each industry has an inherent level of risk associated with it. These different levels of risk play a large role in defining your costs. The details of how you run your business can also affect your business insurance costs. If you’re a restaurant allowing your customers to cook their own food (think Korean BBQ), you may have more risk than a typical restaurant owner.

Your Expertise

Insurance carriers view business owners with more experience as being in a lower-risk category. Typically you’ll be asked how many years you’ve been in business, what level of education you have, and what your employee’s qualifications are. More highly educated workforces are likely to be assumed to be lower-risk to an actuary at a carrier. 

Your Revenue

Growing your business can cause your insurance costs to grow. Higher revenue leads to more customers, more square footage, and more employees, which, in turn, increases your risk. In addition to the workers’ compensation costs that would of course increase, operational complexity adds to risk, the more hands, the greater the risk of someone getting hurt or something going wrong.  

Your Business Location

Where you work plays a large role in your insurance premiums. The more square footage you have, the physical condition of your building, and the physical location of your business (flood zones, high crime rate, fault lines, etc.) lead to higher costs and an assessment of being a higher-risk company. 

One recent factor that has been raising the costs to insure businesses is changing fire zones. If your business is located in a high-risk fire area, then your insurance is going to be more expensive.  As climate change increases the areas considered high-risk fire zones, many businesses that did not have this increased rate adjustment are seeing their costs rise.  This is true for any external impact (flood zones, high crime rate, fault lines), with the higher risk there will be higher costs for your business. 

Your Employees

The number of employees you have may lead to higher insurance premiums. With more employees, you may need to invest in various different types of insurance, like Workers Compensation, Errors and Omissions, and General Liability. Your insurance premiums can also depend on the positions of your employees. Qualified ALEs will necessarily have different requirements, risks, and costs than Small Business Owners. 

Your Chosen Policy

The more policies you add, the higher your premiums. The nature of your business may determine which policies you need to invest in, other times it can be up to you. AS you assess what coverage you need be aware of what a catastrophic loss would do to your business, your personal finances, and your company’s ability to operate.  Cyber coverage was often overlooked before the recent wave of ransomware attacks, now, business owners are actively looking at their data vulnerabilities. 

Your Prior Claims history

Lastly, your claims history has a large impact on your insurance premiums. If your company has a long history of filing claims for loss or damage, insurance companies will charge higher premiums to cover the risk of insuring your business. If you are looking for ways to reduce your premiums, there are risk-reducing operational steps you can put in place. 

Has your insurance increased this year? Learn why with Benchmark’s Rob Cohen.  READ MORE HERE. 

Surface Water and Property Insurance

surface water & property insurance

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It’s that time of year again where the rain starts to fall, and flooding and other rain-related issues arise that businesses typically don’t have to deal with during the rest of the sunshine-filled year— at least in California.

As a business owner, it’s important to understand how your coverage will protect you during various seasons of your business. First and foremost, did you know that Property Insurance has a surface water exclusion? What does this mean for your business?

What is Surface Water? 

Surface water is also known as flooding but doesn’t always mean a full-blown flood. In this case, surface water is defined as spring thaw, flash floods, excessive rain, storm drain overflow.

Additionally, surface water is any water that runs through or travels over land where it’s not supposed to be located. It’s typically determined as any damage that has occurred by water that filtered through man-made objects, instead of from the ground

Why is there an Exclusion?

Investopedia outlines some of the main reasons behind the exclusion, “The reasoning is that only specific areas are prone to water-related natural disaster events, such as floods, tidal waves, or tsunamis.” The insurance industry wants to make sure policyholders with these specific water-related exposures purchase specific Flood policies that can address these loss conditions.

Surface Water Insurance

The Standard Flood Insurance Policy (SFIP) Forms contain complete definitions of the coverage they provide. Direct physical losses caused by “floods” are covered. Also covered are losses resulting from flood-related erosion caused by waves or currents of water activity exceeding anticipated cyclical levels, or caused by a severe storm, flash flood, abnormal tidal surge, which result in flooding, as defined. However, damage caused by mudslides as specifically defined in the policy forms is covered under “Catastrophe Coverage.”  

An Example

In 2012 there was a court case titled, “Union Street Furniture v. Peerless Indemnity Insurance Company,” where the definition of surface water cost Union Street Furniture and Carpet lost substantial amounts of money. 

In this case, there was a large storm that funneled rainwater from the parking lot into their commercial building causing water damage. The case claimed that the water damage was not covered by their insurance policy because the water was deemed to be caused by surface water or flooding. 

Do you need it? 

Take the above example as a learning opportunity. Reach out to your insurance broker to see if it may be a good idea to start investing in a Surface Water Insurance policy. Let your broker know if the topography of your location(s) lend themselves to water damage that fits the definition of “Surface Water”.

Of course, it depends on your specific business situation. If you’re concerned about flood damage specifically, then buying separate flood coverage might be necessary. Flood insurance coverage is available for both commercial and residential properties. With the rainy season approaching in Southern California, there are unpredictable factors that may not be included in your General Liability coverage. 

As a business owner, you have or will need to file some kind of insurance claim. Understanding what that means is essential to your success. Read more about commercial insurance claims, and what you need to know here. 

Why Is My Insurance So Expensive This Year?

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If you’re like most people, your insurance has recently gone up with no explanation. Although we can list factors that might play a part in these increases,  the reason your insurance is going up is a combination of all of these factors.

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:

Factors Causing Increased Insurance

  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 unanticipatable 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? 

Next, we wanted to take this opportunity to provide insight into the ever-changing landscape in the insurance sector. You may have noticed strange behavior from insurers, whether you purchase coverage for your home, business, or both.

Below are the forces exerting themselves on the insurance industry today, which have caused the insurance companies to push rates as well as exit certain geographic areas. We hope this information will provide clarity as well as recommendations on how to take control of insurance costs during this time.

Low Bond Rates

It is interesting to know that in a normal economic market, insurance companies use insurance premiums as a loss leader. The premium loss ratio (total annual Gross Written Premiums valued against total Incurred Losses) typically runs from 105% to 108%. 

This means that for every dollar collected, the insurance company expects to pay out over a dollar in claims. The insurance companies offset this loss, however, with much higher returns in their investment income. A significant source of safe return has always resided in the bond market.

Since today’s bond market has much lower than normal yields, with no relief in sight, insurance companies are seeing lower than normal investment returns.

Unmodel-able Losses

For lack of a better word, we give you “un-model-able losses.”

Insurance companies rely on accurate actuarial “modeling“ to predict losses and help set proper rates based on predictable loss scenarios. For the last ten years, however, the global insurance industry (including the re-insurance segment, but more on that later) has been hit with a regular stream of wildfires, earthquakes, mudslides, hurricanes, abnormal freezes to name just a few.

These are classified in insurance-speak as “un-model-able losses.” Actuarial models have not yet been perfected to incorporate these types of losses. When the industry is faced with these events, profitability plummets, and insurance carriers are challenged to find rates that can accommodate the un-model-able.

Reduced Reinsurance Capacity and Increased Cost

Insurance companies “lay off” much of the value of their loss exposure on the “secondary” or reinsurance market. This considered, the reinsurance market is much more sensitive to how losses will affect their rates, as global reinsurers are the backstop for the industry.

As you may expect, reinsurance rates have spiked steadily over the past five to seven years due to consistent catastrophic losses. In some cases, actual insurance writing capacity is depleted to the point that coverage is no longer available in certain industry segments.

The reinsurer’s response to claim severity and frequency is to restrict the availability of coverage and raise the rates to your insurance company. Year over year, insurance carriers have been paying significantly higher rates for the cost of insurance and that cost is passed to the policyholders.

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.

Why Should This Matter to Me?

The simple answer is to remember that insurance companies are for-profit enterprises. Because of the fiduciary responsibility to its policyholders, insurance companies must stay vigilant on profitability.

As we discussed above, the industry typically operates at a premium loss ratio of over 100%. With the forces pressing down on the industry discussed above, carriers have now focused their efforts on becoming profitable on written premium.

So, how much do rates have to rise to take a carrier from a 5% to 10% loss on each dollar collected to a profit of 10% or 15%? Rates have to rise 10% to 20% on average (this contemplates loss-minimal and loss-free accounts) in order for the carrier to be profitable on collected premiums.

Policies with anything approaching, or exceeding a 50% loss ratio for the last three years combined can see premium increases from 50% to 125%.

What Power Do I Have to Control My Premiums?

Believe it or not, policyholders have the ability to take control over policy costs. The insurance underwriters key in on two areas: property age and maintenance/upkeep. Any property approaching 20 to 25 years old or older will require the underwriter to dig into how well the property has been maintained.

They will want to know about tenants (for commercial properties) and updates, or placement, of the following building systems (home or business). For example, electrical, plumbing, HVAC, and roof systems.

If the age of your property is older, many underwriters are simply choosing not to provide quotes for buildings that have not had these systems updated in the past 10 to 15 years. Please create a budget to update these older systems. It will pay dividends for many years to come in the lowest premiums obtainable in the marketplace.

A Final Word

The most impactful measure used by underwriters to measure account quality is historical losses. Underwriters typically look back three to five years depending on the account.

Homeowners’ losses, both home, and auto, are aggregated to a central database used by all insurers. Commercial accounts, however, are not tracked to a central database.

Losses that cause the most heartburn to an underwriter are water losses. Water perplexes the savviest of insurance actuaries. Policies with consistent water damage claims over time are prime for carrier non-renewal. The lowest hanging fruit for property owners is the proactive replacement of all interior plumbing fixtures. Angle stops, water hoses, and toilet fixtures (float and flap) are the most guilty of causing expensive water damage claims. Next up, would be sewer and drain backups. Please snake all drain lines on a regular basis. Simple, cheap, and effective.

As you’d anticipate, older properties require more information as underwriters evaluate the quality of electrical, plumbing, heating/cooling, and roof systems. 

Remember the insurance policy is not designed to be a “warranty” against less than regular maintenance and upkeep. Property owners can go a long way in stabilizing insurance costs over time by creating and implementing pro-active regular maintenance protocols. If you can create an efficient program, you are doing all you can do to protect your insurance costs for the future.

 

Executive Protection to Guard your Balance Sheet

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Executive protection is a necessary investment for companies to survive. This important balance sheet protection tool can be the difference between survival or peril in today’s litigious environment. 

As you look to protect your business from executive risk, it’s important to understand the different types of risk associated with it. Executive protection is broken down into different categories.

Here’s a breakdown of what Executive Protection covers.

Employee Practices

Employment practices can mean numerous things: wrongful termination, sexual harassment, discrimination, and hostile work environments. 

Within the main categories listed above, there are many subcategories that have proven to be a risk. For example, an employee could file an EPLI for emotional negligence. 

There are many factors that are increasing liability risk for 2021. With most offices returning to in-person work environments, the risk runs even greater. 

COVID-19

COVID brings another element to potential ELPI claims. Some of the potential situations that could occur with returning to the office or adopting a hybrid model include: 

  • An employee feels emotional neglect for having a hard transition to in-person work after working from home for a year.
  • Employees might feel that higher-ups have conducted the health and safety aspect of COVID-19 at a lower standard.
  • An employee refuses to follow new guidelines and regulations stated by the Occupational Safety and Health Administration (OSHA).
  • An employee returns to the office and contracts COVID-19 from a co-worker.

These examples only begin to predict what could happen in the future. 

Fiduciary 

Based on the law passed in 1974, there are regulations that businesses must have as baseline coverage for all employees. If these basic guidelines are neglected, then there’s a liability risk. Some examples of failing to meet guidelines might include: 

  • Improper enrollment or terminations
  • Resulting in lost or incorrect benefits
  • Errors in counseling when administering health or welfare plans
  • Resulting in lost or incorrect benefits
  • Giving poor or negligent advice on investing employees’ retirement plans
  • Making risky investments in a defined benefit pension plan
  • Wrongful denial or improper change in benefits
  • Imprudent selection of and/or monitoring or third-party service providers

There are other terminologies that are thrown around in the workplace, like Errors and Omissions (E&O) that follow similar guidelines. 

Media

Media liability coverage protects the insured against claims arising out of the gathering and communication of information and is critical to any media organization. The variety of claims being asserted against the media, and the size of jury verdicts against media organizations, are constantly on the increase. 

According to data released by the Libel Defense Resource Center, the median jury award against media organizations in 1990 was $500,000; in 1997, it was $2.3 million. 

Cyber and Tech

Cyberwarfare is not just for meddling in elections and extorting multinational corporations. Companies of all sizes and types can fall victim to enterprising hackers and cyber extortionists. The question all companies must ask themselves is not “what is my data worth to someone else?” but “what is my data worth to me?” Of course, well-crafted IT protections are a crucial first line of defense, but if the protections fail, could your company shoulder the cost of an uncovered claim or ransom payment?

Cyber insurance coverage is likely broader, less expensive, and more crucial to your business than you would think. 

Trade Credit

Another fancy term is trade credit. This can basically be broken down to the idea that trade credit protects manufacturers, traders, and service providers against losses from non-payment of commercial trade debt due to bankruptcy, insolvency, or very late payments.

Intellectual Property

IP insurance covers companies for the legal costs associated with pursuing infringement or theft of IP. It also covers legal defense costs for policyholders accused of IP infringement or theft. There are two basic types of IP insurance:

Infringement Defense: Covers policyholders for infringement claims brought against them.

Abatement Enforcement: Gives the insured the financial resources to enforce their IP rights and pursue infringement claims.

In today’s increasingly perilous and litigious business environment, every company faces risk. It is unfortunate that any of your company’s many constituents—including employees, investors, customers, suppliers, competitors, government agencies, and creditors—pose a financial risk to your business. Any one of them, however, could sue your company or target it for criminal activity.

As you look to protect your business from these potential threats, enlist the help of an insurance mentor. At Benchmark, we invest in our clients’ protection and we aim to ensure your business remains risk-free. Reach out to us today to start a conversation about your business’ risk!

Executive Protection to Guard your Balance Sheet

Executive Protection to Guard your Balance Sheet