Insurance Consulting

Scott Simmonds, CPCU, ARM

Insurance from an Unbiased Point of View

January, 2007 -- www.ScottSimmonds.com

Be an Exceptional Risk

I'm often asked what a business can do to control insurance costs. We have talked frequently about bidding your coverage every few years. Here is the second part of the equation - Be an exceptional risk.

Maintain your buildings. Insist on safe work habits by your employees. Train your people to manage emergencies. Have a plan to handle business interruptions.

Put your best face forward to your insurance company (current or potential) when inspectors show up. Housekeeping is important when insurers are evaluating your operation. Go on a pre-inspection walk-through looking at your operations and locations as your insurance company will.

Make sure fire extinguishers are up to date and properly located. Electric panels and appliances should be installed correctly. Extension cords should be removed, or replaced by hardwired outlets. Pick up trash and clean up storage rooms.

Show insurers that you're a quality risk by having policies and procedures in place to control losses and manage claims.

What's a Building?

On its face, the word "building" seems straightforward. Not in the world of insurance. Most property insurance policies define "building" as the structure described in the policy, including:

• completed additions

• fixtures including outdoor fixtures

• permanently installed machinery, equipment

• personal property owned by you that is used to maintain or service the building, including fire extinguishing equipment, outdoor furniture, floor coverings, and appliances used for refrigerating, ventilating, cooking, dishwashing, or laundering.

While the policy does not define what "fixtures" are, these are generally held to be items such as light poles and flagpoles, parking stops, mailboxes, and in-ground sprinkler systems. Signs attached to your building are also considered fixtures. An attached awning is a part of the building.

Under most insurance policies, freestanding signs would be covered only to $250 or other small amount. Extra coverage can be purchased.

Additions under construction are covered if you have not purchased other insurance such as builder's risk. Materials used in construction of the addition are covered when stored within 100 feet of the premises.

Of course, your policies may be different. Talk with your insurance advisor.

Flood

I got another call last week from someone wondering if it is common for an insurance company to exclude damage by flood. Answer: yes, quite common. In fact, few property insurance policies cover flood damage. Coverage can be added if you ask your agent for it. Some insurers will add it right to your commercial property insurance. Others will require a separate policy.

Homes are never covered for flood under a homeowner's policy. You can only get flood insurance for your home or personal property through the National Flood Insurance Program.

If you have any questions about your exposure to flood or your flood coverage, talk with your insurance advisor.

Life In Maine And Other Stuff - I'm feeling like I live in South Carolina! Temperatures have been in the 50s and 60s and there is no snow on the ground. We are supposed to get a snow storm in the next few days. Frankly, I don't miss it. Well, perhaps getting snowed in once - on a day I don't have to go anywhere - would be fun.

We learned on Christmas day that my step-son and his wife will be having a baby in August. As a step-father I'm not sure if I would be considered a grandfather - don't really feel old enough. I do know that I'll be sleeping with a grandmother though!

Let me join the list of people who have wished you a happy New Year. I'm looking forward to a great 2007. My practice grows each year thanks to the great clients I am so fortunate to have. I have long said that insurance consulting is the best job in the insurance business.

To my clients, thank you. I hope I show my appreciation in the service that I provide. To those reading this who are not clients, what are you waiting for?

Biggest Insurance Mistakes White Papers - Get my white papers covering the biggest business and personal insurance mistakes. Send a blank email to bizmistakes@ScottSimmonds.com for a copy of the business mistakes paper. Email to personal@ScottSimmonds.com for the personal insurance version. No cost.

Your Privacy - I will never sell or distribute your email address to any other person or organization.

Do You Have The Right Insurance? Contact me to discuss an unbiased review of your insurance program. Do you have the right coverage? Can your policies be fine-tuned to improve the protection? Can changes be made to ease the administrative burden insurance causes? Are you getting the service you should from your broker? I can help. Call 207.284.0085 or email me at Scott@ScottSimmonds.com. Remember, I don't sell insurance so I'm unbiased.

Need A Speaker? I'm pleased to speak to trade, business, or service associations about insurance topics. Call 207-284-0085 or email me at Scott@ScottSimmonds.com. See my speaker's page at www.ScottSimmonds.com/ispeaker.html.

Forward This Newsletter To Your Friends - Feel free to pass this newsletter on to others whom you think would be interested.

Scott Simmonds, CPCU, ARM
Insurance Consulting
Phone 207-284-0085
Scott@ScottSimmonds.com
ScottSimmonds.com

Comments regarding insurance policies or products in this newsletter do not constitute an endorsement. I accept no fees or payments of any kind from any company mentioned in this newsletter.