Tag Archive for: Fiduciary

earthquake insurance: shaken not stirred

earthquake insurance: shaken not stirred

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.

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

Executive Protection to Guard your Balance Sheet

executive protection to guard your balance sheet

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 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. 


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 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