Tag Archive for: insurance

man at a desk reviewing insurance contract

how much should I pay for cyber insurance?

So, you’re a small business owner asking yourself, “How much should I pay for cyber insurance?” You want to ensure your business is protected, but without excess or unnecessary coverage.

So, how much will it cost? We’re sure this isn’t the answer you want to hear, but it depends. In short…

It depends … The cost of your cyber insurance will depend on your business type and the level of risk you’re exposed to.

(But more on this later!)

Below, we will:

  • Provide a general estimate of how much cyber insurance costs for businesses in the United States, and
  • Discuss what factors influence how much a business owner pays for cyber insurance

infographic of how much should i pay for cyber insurance

the average cost of cyber insurance

According to AdvisorSmith’s research conducted in 2019, the average cyber insurance cost is $1,485 per year (or $124 per month) for $1 million in coverage, with a $10,000 deductible.

To come up with this figure, AdvisorSmith used quote estimates and rate filings from over 43 insurance companies nationwide. Premiums ranged from $650 to $2,357 for cyber insurance for companies with moderate cyber risk.

This figure, however, is not a hard-and-fast rule and will vary based on a number of elements regarding your business. Let’s discuss this further.

how much does cyber insurance cost?

Again, there’s no magic number for how much each business owner’s insurance will cost. That’s because every business is different.

So, what factors influence how much you will pay for cyber insurance as a business owner? At benchmark commercial insurance, we identify eight main determining factors.

industry

The industry you’re in is arguably the most important element in determining cyber insurance costs.

Depending on the industry you’re in, you’ll be placed into one of three tiers—low, medium, and high—of risk related to the type and amount of data your business stores.

To provide an example, a consulting firm would likely fall into the category of low risk whereas a business in construction, the health and wellness space, or the cannabis industry would be considered high risk.

location

The location of your business will affect how much you pay for insurance. Why? The cost of insurance differs from state to state because of differences in legal requirements, economic conditions, competition, etc.

For example, cyber coverage is cheaper in Michigan than in Minnesota.

size

How big is your business? Typically, the larger your business is (i.e. more employees, clients, and greater sales), the more expensive your premiums will be. Why? More employees equal a higher likelihood for a cyber-attack to occur.

amount of sensitive data stored

If your business stores sensitive data, you can expect to pay more for cyber insurance. Sensitive data, to name a few examples, might include:

  • Social security numbers
  • Addresses and phone numbers
  • Credit and debit card numbers
  • And more

For example, a hospital—which houses an immense amount of personal data—would pay more for cyber insurance than, say, a mom-and-pop grocery store with a small customer base and few data collection points.

revenue

The more money your business makes, the higher odds a cybercriminal will be interested in targeting your business, according to an insurer. This considered, businesses with higher revenues should anticipate paying more for cyber insurance.

security defenses your company has taken

Security protocols, software security, employee training… Any preventative measures that your business has taken to stay safe from cyber attacks equal a brownie point in an insurer’s eyes. Businesses that prioritize safety are likely to pay less for cyber insurance.

history of cyber insurance claims

If your business has a history of cyber insurance claims or has been previously attacked, you might face higher premiums.

the level of coverage that you choose

Lastly, your coverage limits and deductible will affect the amount you pay for coverage. In short, the higher your coverage limits, the higher your premiums. On the other hand, paying a lower deductible would result in paying less in the event of cybercrime but paying a greater premium.

Businesses should consult their brokers to determine which cyber security options are best suited for their unique business needs. Interested in learning more? Check out our article on what cyber insurance actually covers.

men sitting at desk reviewing contract's boilerplate clause

your guide to boilerplate clauses

Using precise contractual language is important—especially when it comes to insurance agreements. By using straightforward language, you can avoid:

  • Legal disputes
  • Misinterpretation, and
  • Costly mistakes

Today, we’re going to discuss an important piece of contractual language: boilerplate clauses. Here’s your guide to boilerplate clauses.

infographic for your guide to boilerplate clauses

what is a boilerplate clause?

Boilerplate clauses, sometimes called standard, miscellaneous, or general clauses, are found at the end of most legal documents. Since these elements are lumped together at the bottom, it’s common for boilerplate language to be overlooked.

However, boilerplate clauses can serve an important purpose in any contract. 

Boilerplate provisions can address a range of things but are most commonly known as the saving grace if a dispute ever arises between the two contracted parties.

Boilerplate language defines the relationship between the parties and can help determine “what happens if a document is declared unenforceable, how disputes will be resolved, which laws govern the contract, and more.”

boilerplate clause examples

To provide some examples, below we will detail common boilerplate language that can be found in a contract.

severability clause

A severability clause “keeps the remaining portions of the contract in force should a court declare one or more of its provisions unconstitutional, void, or unenforceable.”

jurisdiction clause

A jurisdiction clause determines in which state or county the contracted parties have the right to settle legal disputes.

governing law clause

A governing law clause is “a clause used in legal agreements where you can declare which rules and laws will govern the agreement if legal issues arise.”

dispute resolution clause

Identifies how a dispute between the two parties will be handled if one arises. For example, through negotiation or meditation before court action.

prevailing party clause

A prevailing party clause states that in the case of a legal dispute, the losing party will pay the legal fees for the winning party.

Of course, there are many other clauses that fall under boilerplate language. This is why it’s important to consult a professional about the contractual language used in your insurance agreements—so no stone goes unturned.

the importance of routine insurance audits

As we’ve mentioned, the wording used in an insurance contract is very important. Legal wording can guide the obligations of each party as well as how these specific obligations are interpreted.

For this reason, at benchmark commercial insurance, we recommend that you take a hard look at contractual language—preferably, with a professional at your side.

It is important to not only look at a contract as it’s being created but also to conduct routine insurance audits. This way, you can review and adjust your policy as needed.

Interested in learning more? Read on to find out how to stabilize or reduce your insurance costs.

man holding phone at computer with blue screen that says cyber security

the evolution of the cyber insurance market

Considering today’s digital world, cyber-attacks have become increasingly common over the past decade—and with more significant financial impact. Breaches including phishing emails, viruses, ransomware, or other malicious attempts can cost companies billions of dollars.

As a result, more businesses and organizations—both small and large—are investing in cyber insurance to avoid catastrophic losses and expenses—and we don’t blame them. However, the cyber insurance market itself has changed a bit as well. Let’s discuss the evolution of the cyber insurance market and where it is right now.

what is cyber insurance?

Cyber insurance is a policy that protects your “business’ liability for a data breach involving sensitive customer information.” This sensitive information might include:

  • Credit card numbers
  • Account numbers
  • Health records
  • Social security numbers
  • Driver’s license numbers
  • And more

Typically, cyber liability insurance covers network security and data privacy incidents, including first-party costs and third-party claims. Remember, no business—no matter how big or small—is safe from the threats of a cyber attack today.

Not quite on board yet? Check out the shocking cyber attack statistics from AAG below.

cyber attack statistics

Did you know…

  • There is a hacker attack every 39 seconds
  • 64% of companies have experienced web-based attacks; 62% experienced phishing and social engineering attacks; 59% of companies experienced malicious code and botnets
  • Since 2013, there are 3,809,448 records stolen from breaches every day
  • 43% of cyber-attacks target small business
  • Over 75% of the healthcare industry has been infected with malware over the last year

where is the cyber insurance market today?

Today, despite the increased need for cyber protection, organizations are faced with a difficult cyber insurance market. The market is characterized by:

  • Rapidly increasing losses
  • Non-renewal cases
  • Increased premiums
  • Coverage restrictions
  • And longer underwriting periods due to increased requirements

Infographic of the evolution of the cyber insurance market

how benchmark can help

The United States cyber insurance market, according to the National Association of Insurance Commissioners, expanded to $4.1 billion in direct premium in 2020, an increase of over 29% from 2019.

Our team at benchmark commercial insurance is understanding of today’s cyber insurance market—and is here as your partner to navigate insurance compliance around everyday business transactions, ensuring you have the right coverage for your risk tolerance.

Reach out to benchmark today to learn more about our dedication to providing global capabilities with our boutique experience.

construction worker sitting on job site injured

how to avoid the most common workplace injuries

Between 2015 and 2019, workplace injuries kept workers out of work for more than 17 million days when looking at 1.5 million workers’ compensation claims. That’s right—we said 17 million days, according to The Travelers Injury Impact Report. Workplace injuries are an employer’s biggest nightmare for a variety of reasons.

Let’s chat about how to avoid the most common workplace injuries and what they are.

what are the most common workplace injuries?

The most common workplace injuries across all employees and industries were ranked as follows:

  • Overexertion
  • Slips, trips, and falls
  • Struck by an object
  • Motor vehicle accidents

Moreover, for first-year employees, cuts, punctures, and being caught in or between hazards also accounted for a significant portion of injuries.

how to avoid workplace injuries

At benchmark, we bring these statistics to light to provide businesses with an understanding of what is happening (or can happen) in their workplaces. 

We’d like to help your business avoid workplace injuries by discussing four tips on how to avoid them. Check them out below.

prioritize a safety-first culture

In your business, it’s important that your employees know safety is a priority. Implementing a solid safety program will look different for each industry; however, your safety program will likely include safety meetings, tests, the proper safety equipment and tools necessary to complete work, and of course, safety training.

When you implement a safety program, it should be your number one priority to do everything in your power to prevent employees from getting injured or sick. (Yes, this includes making sure all of your carpets have non-slip grip or are secured to the floor to prevent slips!)

stabilize your employee population

Accidents happen more frequently when businesses don’t have adequate staffing levels. One way that you can avoid injuries in the workplace is by ensuring you have a stable employee population.

Why? Overworked employees are more likely to suffer from exhaustion, which can lead to cutting corners to make ends meet. A solution could be hiring part-time or even seasonal staff to help prevent these common workplace injuries.

implement a safety-incentive program

Most employees just want to know that they’re valued and to be recognized for their efforts. A great way to do so, while also increasing workplace safety, is by implementing a safety-incentive program.

In fact, the Occupational Safety and Health Administration, more commonly known as OSHA, recommends safety-incentive programs, which reward “workers for reporting near-misses or hazards.”

According to OSHA, effective safety-incentive programs can “provide positive reinforcement for reporting illnesses and injuries,” making the workplace a safer environment altogether.

invest in insurance

Insurance is one of the most important things a business owner can invest in to keep their business safe. The types of insurance your specific business might need will vary depending on your industry, state, and business itself. However, some common types of insurance include:

  • Commercial Property Insurance
  • Cyber Liability Insurance
  • Commercial Auto Insurance
  • Workers’ Compensation Insurance
  • General Liability Insurance

infographic on How to Avoid the Most Common Workplace Injuries

Speak with a professional—like our team at benchmark commercial insurance—to learn what types of insurance you need to keep your business protected. Read on for your complete guide on workers’ compensation in the hybrid workforce.

man at desk with insurance building blocks

why is your commercial property premium increasing?

‘Why is my commercial property premium increasing?’ As a property owner, this is likely a question that you’ve had top of mind lately. There are many factors driving rates up right now.

Let’s discuss the reasons why your commercial premiums might be increasing, as well as what you can do to counteract these surges.

factors that are driving up commercial property premiums

What factors are driving rates?

the global pandemic and subsequent economic uncertainty

Pretty self-explanatory—and expected!

increase in natural catastrophes that occur

From rising global temperatures to cyclones, hurricanes, tornados, and tropical storms, there has been an increase in not only the frequency of natural catastrophes but also the severity of those events.

increased costs 

Second, you have to address the cost to rebuild after such a catastrophe. In most cases, the cost to rebuild often exceeds tens of billions of dollars depending on the damage done.

In addition to this, the cost to rebuild right now is sky high due to:

  • Price inflation of materials
  • Labor shortages, and
  • Supply chain issues

Companies at high risk of natural catastrophes (i.e. tornadoes, hurricanes, hailstorms, and wildfires) are seeing the highest rate increases, as well as non-renewals and difficulty securing coverage. In fact, in wildfire areas of California and wind zones of Florida, rates have increased by over 20%.

what can commercial property owners do to reduce premiums?

When it comes to battling increased commercial premiums, risk mitigation is your golden ticket.

Property owners who have been working hard to mitigate risk and decrease claims are likely to receive more favorable terms and conditions—and possibly lower rates.

So what steps can you take as a property owner to mitigate your risk and therefore lower commercial premiums?

review your policies (before they expire!)

Did you know that, according to research, commercial properties were undervalued for underwriting purposes by more than 30% in November 2021 policies annually?

The solution to undervaluation? We recommend more frequent, in-depth property risk appraisals, that take the following into account:

  • Extreme weather events
  • Potential supply chain hurdles
  • Inflation trends

take control of your insurance narrative

Don’t leave your insurance narrative to underwriters. Instead, partner with your insurance broker and/or risk representative(s) to reduce risks wherever possible.

Property owners might consider taking a look at the elements below to create the most favorable underwriting profile, which then leads to the most favorable terms, conditions, and pricing:

  • Take inventory of assets
  • Identify current exposures and cost drivers
  • Tailor contracts to the current environment
  • Revisit existing risk management techniques
  • Highlight business continuity plans and loss control measures in place
  • Build a company culture focused on safety
  • Manage claims efficiently
  • Be weather-ready

Remember, underwriters are more critical of property (now more than ever!). You should anticipate them to ask in-depth questions about what you’re doing to control your risk for employees, tenants, and visitors.

As a property owner, it’s important to ensure your property is adequately protected against water damage. (Trust us, it’s no joke!) Read on to learn ​​why water damage is a top insurance loss.

infographic of why your commercial property premium is increasing

the insurance you purchase for your business depends on your business type

how do I insure my business?

Have you recently started a business and don’t know where to start when it comes to insurance? As a business owner, you might understand the benefits of an insurance policy as it pertains to paying for damagesso you aren’t paying them out of pocketbut what policies does your unique business need?

After all, commercial insurance isn’t one size fits all. The insurance needs of a marketing agency, for example, will likely vary from those of a law office.

Watch Robert Cohen, Principal at benchmark commercial insurance, explain how to insure your business in the video below.

 

what types of insurance does my business need?

Some insurance types are required on a federal level while other are required by the state. Some insurance types, however, are required by contractual agreements or motivated by “best practices” corporate governance.

So, what types of insurance does your business need? This depends on a variety of factors, including:

  • How many employees your business has 
  • Your sales revenue
  • Your annual revenue 
  • The industry you’re in
  • Your level of expertise
  • Where your business is located
  • How much risk you’re willing to tolerate

insurance for different business types

Let’s discuss four different business insurance types: home-based business insurance, small business insurance, medium-sized business insurance, and insurance for large businesses.

home-based business insurance 

Home-based businesses account for half of the businesses in the United States. Insuring this type of business model with homeowners insurance alone won’t cut it when it comes to business property loss or liability. 

small business insurance 

The Small Business Administration (SBA) defines small businesses as businesses that are owned and operated independently, and are for-profit. Often, these businesses have fewer than 500 employees.

A common small business policy is a Business Owners Policy for businesses with fewer than 100 employees and revenues of up to about $5 million or less. 

While you can purchase customized insurance to cover your specific type of business, insurers offer standardized small business policies that enable you to protect your company against the most common risks at an affordable rate.

medium business insurance 

Medium businesses usually range between 50 to 1,000 employees and have annual revenues between $10 million and $1 billion. Typically, there are specialized insurance policies designed for medium-sized businesses.

Here, policies become more flexible based on the needs of the company. For instance, if your business owns expensive equipment or has multiple locations, you can seek out customized policy options to address these elements.

large business insurance

A large business is considered such if they have over 500 employees. There aren’t linear revenue requirements for a business to be considered “large.”

Since these businesses employ hundreds of people and more than likely have multi-million-dollar revenue risks, their commercial insurance policies must be tailored to the business’s unique needs.

types of insurance to insure my business

Understanding your insurance needs for your unique business is essential to your success.

At benchmark commercial insurance, we often find business owners who are either under-insured or even over-insured at times. Your policy supports your business operations and gives you peace of mind that if something occurs, you are covered financially.

So, what type of insurance do you need for your business? There are many insurance policies to choose from to support your unique business. A few to consider include:

how to properly insure my business

The number one thing to consider as you invest in insurance for your business is: Do any of my current policy forms have coverage restrictions or exclusions that limit my coverage for the business I am in?

When insuring your business, at the highest level, transfer the risk of financial loss to the insurance company from your balance sheet in as many ways possible.

Doing so, however, comes with a cost. Sometimes that cost is too much to bear.

A key component of insuring your business is your relationship with your risk management/insurance services service provider. How will they help you structure your policies to be the most effective in coverage and cost? It takes time.

Your insurance professional should be sitting with you periodically to make sure that both parties are up to speed on all of the moving parts of your business operation.

Moreover, your insurance professional should make sure they’re offering you every commercially available tool to transfer the risk from your balance sheet to the insurance company (again, in as many ways possible). Once organized, it’s up to you to determine what may or may not fit into your budget or what policies best protect your business.

If you’re not having these conversations with your insurance services provider, reach out to our team at benchmark insurance. Here, we thrive on creating a boutique insurance experience for our clients.

Now that you understand how to insure your business, read our article on how much you should pay to insure your business.

california wildfire flames sunset

california’s fire zones: what they mean for commercial insurance

Fire, especially in California, is a natural disaster that commercial property owners must factor into their insurance costs. In fact, research shows that “California is the most wildfire-prone state in the United States… account[ing] for roughly 31% of all acres burned due to wildland fires in the U.S.”

This considered, it’s important to discuss California’s fire zones and what they mean for commercial insurance. Let’s dive in.

what are fire zones?

First off, what is a fire zone? According to the Office of the State Fire Marshal (OSFM), “California law requires CAL FIRE to identify areas [fire zones] based on the severity of fire hazard that is expected to prevail there.”

These fire zones are ranked based on increasing fire hazard as either:

  • Medium
  • High
  • Or, very high

The way in which each area is ranked is based on a number of factors, including fire history, vegetation, flame length, blowing embers, terrain, and weather.

california fire zones

California is known for being prone to fire, which is not good if you’re a commercial property owner.

Luckily, you can assess your risk by using the California Fire Hazard Zones map, courtesy of OSFM.

when is fire season?

Peak fire season in California differs based on your location, for example, if you’re in NorCal or SoCal.

Northern California: Peak fire season begins in the early summer (June to July) and ends in late fall.

Southern California: Peak fire season begins in late spring (May to June) and ends in fall.

fire season is getting longer

Fire season is typically deemed “over” after the first rainfall of fall or winter. Interestingly, however, the season is longer than it used to be due to rising global temperatures. In fact, the United States Forest Service (USFS) estimated in 2015 that fire season had already gotten about two-and-a-half months longer than in the 1970s due to climate change.

what do I need to look at to stay protected?

There are two things you need to take a look at to ensure your commercial property is protected during fire season.

your fire insurance policy!

Fire insurance is very important for any commercial property owner or investor—especially considering the consequences of not having adequate coverage.

Fire insurance is “a form of property insurance that covers damage and losses caused by fire.” While most homeowners’ policies come with some form of fire protection, additional coverage is often required. You must be sure these investments are fully insured without umbrellas so that the total limits of liability exceed your property assets.

Fire insurance is especially important for individuals who own investment properties. The number of investment properties you own could determine whether or not you’re able to use personal lines of insurance to cover fire-related issues.

your risk mitigation strategy

Today, insurers are sticklers about whom they will cover (and rightfully so considering the damage fire can have on commercial property).

Underwriters often now require businesses in high-risk areas to ​​take certain measures to protect their property against fire. These measures might include:

  • Creating defensible space by carefully selecting your landscaping vegetation
  • Building with only non-combustible building materials
  • Routine cleaning and maintenance of dried vegetation
  • Ensuring you have clear access to a reliable water supply

For business owners who are interested, read on to find out how much you should pay to insure your business.

infographic about california’s fire zones what they mean for commercial insurance

all businesses need to mitigate risk with cyber insurance

I don’t have an online business, do I need cyber insurance?

The insurance policies a business chooses is based on their specific business model. What works for one business may not work for another. One policy, however, lives as a baseline policy all businesses should have- cyber insurance

 

This rings true, especially in light of today’s tech-reliant world. Even businesses that do not operate online are not free from the dangers of a cyber attack. 

 

Furthermore, recent events regarding the ongoing Russian-Ukrainian War have the potential to impact all businesses and their cyber security in the United States. Cyber security risks are escalating, so let’s discuss more why even non-online businesses should invest in cyber insurance.

do all businesses need cyber insurance? 

Yes. All businesses need cyber insurance regardless of business type—especially in today’s digital environment. 

 

Even if your business is not an online business, cyber insurance helps mitigate risk. Cyber-attacks occur regularly (every 11 seconds in 2021), and can target individuals and businesses alike. No one is safe from the threat of a cyber attack – no matter the business model. 

 

Typically, attackers use the following tactics in a cyberattack:

  • Phishing 
  • Compromised/stolen devices
  • Credential theft 

 

General and professional liabilities may include basic cyber liability coverage, however, businesses that store personally identifiable information or any sensitive information for employees and customers should seek out further coverage. 

 

Data your business has (i.e. phone numbers, credit card numbers, social security numbers, and more) puts any business at risk for an attack.  

 

A report by Nerdwallet, “​​Among small businesses with fewer than 250 employees, the average reported cyberattack cost was about $25,600.”

 

Consider the following cyber attack statistics below before dismissing a cyber security policy for your business. 

 

  • Cybercriminals can penetrate 93% of company networks
  • In 2021, businesses suffered 50% more cyberattack attempts per week
  • Corporate cyber attacks increased by 50%
  • Small to medium-sized businesses are most commonly targetted   
  • 43% of cyber-attacks are targeted against small businesses 
  • 83% of small businesses are not financially prepared for a cyber attack

 

The threat of a data breach is here to stay. We here at benchmark have first-hand experience with what cyber attacks look like, and what to do to keep your business safe. Read on to learn how we mitigated a cyber attack against our vendor’s business. 

 

benchmark case story

A few years ago, our data vendor’s cloud server was hacked.  All of the vendor’s “mission-critical” information stored in the Cloud was breached (i.e. email servers, client databases, and more)- that included our sensitive information and the information of their other clients. 

 

The hacker asked for a ransom to not share all of the data and to return the data back to our vendor. 

 

Luckily, because the vendor had benchmark’s cyber insurance coverage, our office and all of the vendor’s clients came out unscathed. The cyber insurance covered the entire ransom the hacker was asking for– which meant our vendor was able to keep their data safe and unharmed. 

 

Our cyber insurance policy coverage protected our vendor, our business, and their clients from leaking private information. It also kept the vendor in business so they wouldn’t go bankrupt from paying the hacker’s ransom out of pocket. 

 

Read our next blog post for a complete guide to cyber insurance and why you need it. 

 

all businesses need cyber insurance

use our three tips to avoid an employee practice issue

three tips to avoid employment practices issues

The most common risk businesses face are employment practice issues. Research found that businesses are five times more likely to be sued over employee-related issues than for any other issue. With a rapidly evolving workforce, let’s discuss the three strategies businesses can effectively implement to avoid running into any employment practice issues. 

1. Communication 

The age-old saying “communication is key” has stuck around for a reason- because it’s true. Effective communication helps keep businesses running smoothly and helps teams feel engaged, and included.  

 

If your business doesn’t communicate upcoming changes to the business model or structure, it may build distrust among your workforce. People don’t like change, especially in the workplace.  Regardless of the reasons why change is met with resistance, when your business makes decisions, communicate those changes to your teams quickly and clearly.  

 

Insurance journal says it best, “Policies and procedures that aren’t communicated don’t exist.” 

 

Communicate company policies clearly and often to your entire team. As policies change, let your entire business know:

 

  • What changes you are implementing
  • The expectations of each employee
  • The expectations of the business 
  • Precautions for violation of new changes 
  • The duration of the changes (i.e. until further notice, permanently, for two months, etc.)

 

As your leadership implements new business policies, continue communicating each step throughout your business. While you, as a business owner, are aware of conversations surrounding changes, this is still new to your workforce. 

 

Tell your teams when policies are begin considered, when they are changed, and continue talking about the change well after its implementation. The goal here is to lead with transparency to avoid confused and discontented employees. 

 

What are the benefits of clear, consistent communication? It encourages team buy-in, increases productivity, boosts employee engagement and belonging, reduces conflict, and increases retention. 

 

Use Asana’s tips on effective communication in the workplace:

  1. Know when and how to best communicate change 
  2. Stick to the facts 
  3. Prioritize collaboration 2. Consistency  

 

2. Consistency

Change can be a challenge in and of itself. Consistent communication of the changes can help the team feel engaged and excited about what’s to come. The more your team hears about upcoming changes, new requirements, and expectations, the easier it is for your team to execute on them. 

 

Consistency also means that your business makes decisions based on a specific criteria across the organization, typically this criteria includes:

  • What’s best for the team 
  • What’s best for the business 
  • What’s best for the customers 

3. Compassion

Finally, understand that implementing change in your business requires compassion. Your team is made up of individuals who are impacted by the new decisions you make. 

 

Remember that required changes may require individual evaluation to consider include:

 

Not every request for exemption can be granted, but it’s important to review requests and allow the opportunity for discussion.  

A final note

Businesses that support their workforce through communication, consistency, and compassion set themselves up for success. These change management strategies also help mitigate the risk of employment practice issues. 

 

When it comes to protecting your company from employee-related claims, an employment practices liability insurance (EPLI) policy is essential.  This policy covers the costs if an employee claims wrongful action during their employment. Learn more about EPLI and why your business may need it in our article here

 

communicate with your staff

water damage is one of the top insurance losses for businesses

why water damage is a top insurance loss 

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