The Bull Stops Here Blog

Employment Practices Liability is EXCLUDED on your Commercial General Liability policy.

Problem: You walk into your office one morning and find that you’ve been served with a subpoena by an employee who is alleging they were a victim of age discrimination.  Why?  Because you had to downsize due to the economy and they were one of the casualties.  Since they are over 40 (that’s right 40) they are federally protected as a class of employees for Age Discrimination.  They claim you only terminated them because of their age.  You contact your insurance agent to find that your insurance policy has no coverage.

Solution: Before this occurs, go to your agent and buy Employment Practices Liability (EPL).  The premium has come down substantially over the years and quite frankly, you can’t afford to be without it if you employ people.  Protect yourself from discrimination lawsuits with EPL.

Be safe.

From a recent “Meet the Press” interview…

Ordinance or Law is an exclusion on your Commercial Property policy relating to your building.

Problem: A fire destroys half your building. The city, county, or state says you must demolish the undamaged portion of your building and rebuild.  Your insurance policy has zero coverage for the undamaged part of the building, the demolition, or any increased costs to construct.  It all comes out of your pocket.  OUCH!

Solution: Purchase the endorsement called Ordinance or Law.  Ask your agent to give you 100% building value for Coverage A (Undamaged Portion of Building) and at least $100,000 of Coverage B (Demolition) and C (Increased Cost of Construction).  This may need to increase depending on the size of your building.  This is an often overlooked issue leaving a huge gap and a big problem for you.

Be safe.

Coinsurance is a penalty assessed to you for being underinsured on your commercial property.  You will find coinsurance percentages of 80% and 90% on most conventional policies.  Look to see if you have one.

Problem: You have a fire that damages half your building and most of your contents.  You have 90% coinsurance on your insurance.  At the time of your loss, you inadvertently were undervalued on your policy.  The insurance adjuster will determine what percentage you are underinsured and assess a penalty.  You become a “coinsurer” of your claim.  Ouch!

Solution: Purchase an Agreed Value endorsement on your property.  This waives the coinsurance clause. You and the insurer agree on an amount based on your estimated replacement cost.  If you are underinsured, you have no one to blame but yourself.  Ask your agent to move away from coinsurance and to Agreed Value.

Be safe.

I am very excited to announce that I’ve just launched my exclusive forums for my professional community and it’s available to join immediately.

The Weedin Forums will be a place where C-level executives, small business owners, business professionals, and business leaders can come to learn, grow, and be challenged.  The forums have many categories meant to discuss and debate with peers so you can learn and constantly develop your business or organization.

Topic you will find include:

• Leadership
• Insurance & Risk Management
• Effective Communications Skills
• Networking & Marketing
• Current Events
• Life Balance Techniques
• Much, much more

There is also a forum for you to ask me any question that you need a quick response to.  I’ve been a member of my mentor’s community just like this for consultants and have benefited greatly.

Membership is a lifetime $500 one-time fee.  You will get a huge return on your investment just by being active and participating.  I encourage you to join and become active in my forums.  It will be good for your business!

Click here to register.

Cheers,

According to this New York Times article, Speaker Nancy Pelosi has proclaimed that, “The glory days are coming to an end for health insurers.”  Glory days?  Are you kidding me?

Health insurers have struggled mightily over the past years, to the point that their numbers are dwindling.  The cost of health care has made it anything but “glory days.”

My biggest issue coming out of this article is focused on what I believe Ms. Pelosi is crowing about - making it mandatory for people to be insured, regardless of their health history and current illnesses for no additional cost.  This is called “adverse selection,” or in layman’s terms “stupid.”

In theory it sounds great doesn’t it?  Everyone gets the same insurance for the same cost. Oh happy days!  But wait a minute, if a health insurer has to pay out more for one person, but not be able to bring in more, won’t this cause a deficit?  The answer is YES.

Consider this analogy…

You and I both have auto insurance.  We drive the same car, live in the same area, and are the same age.  You are a prudent driver with no accidents or tickets.  On the other hand, I’ve managed to get involved in two accidents in the last three years and have three speeding tickets.  I also let my 17-year daughter old drive it around town on occasion and you know she takes after me with the lead foot.  Who is more likely to cause higher costs to the insurer?  That’s right…me.  However, I get a great deal on insurance because the government mandates we both pay the same.

After a couple of years of doing this, the insurer is forced to raise rates on everyone to keep up with costs.  The claims by drivers like me are driving them into bankruptcy (sound familiar) and the only way to stay afloat is to increase rates.  But, since we all have to be the same, your rates go up too, even though you’ve done nothing wrong.  Happy?

Here’s the bottom line - Insurers of any kind - property, auto, health, liability, must be able to rate premiums according to exposure.  When they don’t, everyone must suffer.  This will happen in this new health care package and to make matters worse, YOU are one of the insurers.  The government (through your tax dollars) is an insurer and will have the same issues that private companies do.

Health insurance can’t be equitable for all.  Just like auto insurance rates are higher for drivers who are higher risk, so must premiums for higher in health insurance to compensate for exposure.

So Ms. Pelosi, you are correct.  Happy days are gone for health insurers.  Unfortunately, they are probably gone for the American taxpayer, too.

Read the NY Times article

Be safe and be well.