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a day in the life of a benchmark broker

a day in the life of a benchmark broker

 

What does your insurance broker actually do for you? 

The daily tasks that a Benchmark insurance broker performs fall into the categories of:

  • Coverage analysis
  • Risk control
  • Hr services
  • Insure-tech

Here’s a deeper look into what the role looks like when it comes to commercial and personal insurance.

Client Communication

Like the old American proverb says, “To keep a customer demands as much skill as to win one.” 

Client communication is essential as an insurance broker in continuing a trust-filled relationship. One of the first steps a Benchmark insurance broker takes on during the day is taking client calls and emails and answering any concerns in a timely manner. 

This included us following up with any open items we need to complete underwriting or claim files. 

There are smaller questions that are easier to respond to, but sometimes a client emergency comes up, then industry advice is needed ASAP.

Client Emergencies

Benchmark insurance experienced this recently with Lyon & Associates Creative Services, Inc, who reported on their experience in a recent email describing their unfortunate “Pandemic Burglary.” 

Lyon & Associates Creative Services, Inc was out of office for three weeks during the pandemic back in March 2020. Then they fell under the healthcare communicators category and returned back to the office. 

“Our editing computers are largely empty shells, running the software alone. As a result of this structure, an early morning thief snatched all of our editing workstations.

When we reached out to our insurance broker, Carlsbad-based Benchmark Commercial Insurance, they took care of getting a claim opened with our insurer, Travelers.

Due to Benchmark’s previous good counsel, we had excellent replacement value and business interruption coverage. When the Travelers claim adjuster got in touch the same day, they had a significant starter check on the way before the weekend. 

Replacement value means exactly what it says, and then some, by the way. They covered things like the dozen new USC-C (Thunderbolt 3) to Thunderbolt 2 adapters we needed to keep our considerable investment in unstolen hard drives connected to the new computers. Of course, the claim was so well-covered that we exceeded their allowable percentage loss limit and they declined to renew our policy. (Chubb had our workers comp policy and they scooped us up with no increase in rates).” 

In any field of business, unpredictable events occur, so this can often take up time during the insurance broker’s day.  

Negotiation 

One task that generally occurs daily is negotiating with underwriters for best terms on new and renewal business quotes. 

Team Communication

Babe Ruth said “The way a team plays as a whole determines its a success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.”

Even though insurance is a tiny bit different from baseball, the same concept applies in the workforce. 

Communication within the Benchmark team is also crucial throughout the day. This can look like answering internal questions related to claims, billing, certificates, and underwriting. 

Coffee Breaks

Yes, a Benchmark insurance broker does require multiple coffee stops throughout the day— cappuccinos are preferred. 

Client Contracts

Another daily task is reviewing client contracts. The insurance world is constantly changing, so staying up-to-date is important for client communication. When reviewing client contracts, our broker will check to make sure that any insurance or indemnity-related contractual stipulations are consistent with the client’s coverage. 

This also included following up with claim adjusters on open claims on behalf of the broker’s clients and advocating on behalf of our clients to claim adjusters on difficult claims issues. 

Prospect Clients

Finding new clients that will be a match with Benchmark Commercial Insurance, and that we are a match for takes effort. Throughout the day a broker will field calls and emails from new business referrals and prospect call-ins. 

Policy Review

An insurance broker will perform policy reviews to make sure policies have been issued correctly. This includes policy reviews for prospects so they can understand how their current program integrates with the scope of their current operations, which exposes any gaps in coverage. 

A Benchmark insurance broker will also initiate, and continue to follow up on the underwriting status for all renewals 90-days in advance of the policy expiration date. 

Third-Party Communication

Keeping relationships with other companies is important to our brokers. This includes Zoom meetings with our marketing agency and promoting our excellent relationships with the underwriters who support us. 

Wondering why your insurance has skyrocketed this year? Find out the factors that might be directly impacting you on the Benchmark blog. 

Cyber Security: Looking Forward to 2022

cyber security: looking forward to 2022

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

why email may be your biggest cyber risk

why email may be your biggest cyber risk

When you hear the word “cyber risk,” what do you think of?

If you think of Facebook or strangers sending sketchy links over text, you’re not alone. But, you are wrong.

In 2019, The FBI’s Internet Crime Complaint Center (IC3) reported that the losses for business email scams was $1.7 billion. So, your email might be your biggest cyber risk, what does that mean for you? Let’s break it down. 

BEC Scam 

The FBI defines a Business Email Compromise (BEC) scam as, “Also known as email account compromise (EAC) — is one of the most financially damaging online crimes. It exploits the fact that so many of us rely on email to conduct business— both personal and professional.” 

They also list what BEC scams can often look like: 

  • “A vendor your company regularly deals with sends an invoice with an updated mailing address
  • A company CEO asks her assistant to purchase dozens of gift cards to send out at employee rewards. She asks for the serial numbers so she can email them out right away. 
  • A homeowner receives a message from his title company with instructions on how to wire his down payment.” 

The listed scenarios were all fake, and cost companies thousands (sometimes hundreds of thousands) of dollars. 

The rise in Cyber Security breaches has jump-started many companies into investing in cyber security insurance. This is a great way to protect yourself and your company, but there are preventative measures that can be taken. 

How to Avoid BEC or EAC Scams

There are some steps you can implement to avoid the financial downfall of a cyber attack. 

Company Policy

Set clear policies about what should be responded to within the company email. This also implies that the company email is not used for general things (for example, signing up for a clothing discount). Within company policy, there should be a rule for not sending personal passwords or information over email. 

Social Media

Social media has changed what a company might share with the world. The information that is shared with the public can be informative about the industry, but should NOT be stating that the whole company is out of the office for a day off. 

Employee Knowledge

Train your employees to look out for red flags in their inboxes. This could look like anything from emails from outside the company, to emails asking for personal information. Emails can be included in a broad cyber security training, considering their high-risk factor. 

Has the recent rain caused any alarm for flooding at your commercial property? Learn more about the surface water exclusion that is most likely a part of your property insurance. 

Tax Codes

changes in tax codes – what you need to know

Tax changes are coming. 

Have you prepared for the changes that may begin at the end of the year? If you haven’t started thinking about it already, it’s about that time.

Here are a few of the proposed changes that are looking to go into effect starting next year. 

Income Tax Changes

 

Your tax liability might be at risk to change, although it all depends on your current financial situation. Some of the main changes will affect your bottom line. For example, if your income exceeds $400,000, then you are likely to be impacted.

Along with higher tax rates, itemized deductions will also be prevalent in tax code changes. The proposed changes include a $10,000 limit on local and state taxes. 

Carried Interest Tax Changes

The last time carried interest tax changes were drastically changed was in 2017. It looks like there will be more change coming. Some lawmakers introduced the “Carried Interest Fairness Act of 2021” which if passed, would “tax carried interest at ordinary income tax rates and treat it as wages subject to employment taxes.” 

Capital Gains Tax Changes

The proposed changes would increase the applicable tax to a higher marginal income rate. This would conclude with the total being 43.4% on long-term capital gains. 

Estate & Gift Tax Changes

President Biden has proposed that the current Estate & Tax Changes that are meant to extend until 2026 be looked at closely. 

How to know if these tax changes will affect you?

If you are a business owner or individual whose income is above $400,000 then odds are you will be affected by these tax changes. 

Increased tax rates will mean it’s hard to know how much you’re paying to insure your business. Learn what the general costs are for your business.  READ ON… 

orange umbrella above regular black ones

how much should I pay to insure my business?

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

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