Insurance Consultants of Maine Newsletter
Scott Simmonds, CPCU
June, 2004
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Feel free to forward this newsletter to your colleagues. Your comments, questions and suggestions are always welcome. Email: scott@icofmaine.com

Identity Theft And Your Insurance - The news is filled with stories of identity theft. It's a scary thought that someone can pretend to be you and use your credit cards and credit history. Homeowners insurance offers some coverage for fraud. Most policies pay for unauthorized use of credit or debit cards and coverage for forgery of checks and negotiable instruments. Coverage for these specific types of fraud is limited to $1,000 under most policies – some have more, some less. There is no coverage for the time, effort and possible legal expenses you'll incur if someone fraudulently takes out a loan in your name or ruins your reputation with unauthorized credit activity. Your best defense is a good offence. Check credit card and bank statements right when you receive them. Report unauthorized transactions quickly. Carry only the credit cards you need. Periodically photocopy the cards you do carry – front and back. In this way you'll have specific data if your wallet or purse is stolen.

20 Biggest Mistakes In Business Insurance - Subscribers to this newsletter can receive a copy of my newest e-book, "The 20 Biggest Mistakes In Business Insurance." Email me at scott@icofmaine.com and I'll send you a free copy. One reviewer, Stu Olesen of The Woodlands Club in Falmouth, Maine, commented, "I am very impressed with its simplicity. You have broken down a business necessity into a very manageable document that I can use to focus the direction and content of the annual review with my insurance agent. Thank you."

Mold Exclusion - Most insurance policies now exclude mold and fungus damage. There is no coverage for damage to your property caused by mold or for illness to customers or other third party. So, if your building has mold there is no coverage under most property or liability insurance policies to clean up the damage. The notable exception to this is workers' compensation insurance. If an employee can prove injury caused by mold workers' compensation will respond in most states. If you have water damage clean it up completely – in most cases its better to remove carpeting and wallboard that have been damaged. Let the area dry thoroughly. Have professionals oversee the cleanup.

It's About Improvement - Please tell me what you like about this newsletter and what you don't like. Are there issues you'd like addressed? How can I improve the format or presentation of information?

Come See Me #1 - I'm a panelist at upcoming Board Network's June 10 Governance Training Workshop in Wells, Maine. My part of the program will cover non-profit directors and officers insurance as well as other insurance issues. Call The Board Network for info, 207.874.1000.

Come See Me #2 - Interested in professional liability issues? Come see my presentation to the Maine Association of CPAs, June 11 at the Cumberland Club in Portland. " Your Professional Liability – The Good, The Bad And The Ugly" 7AM to 9AM. Call Tina at the Society for details, 207. 883.6090 .

Of Brokers And Agents - Several insurance brokers are under investigation by the state of NY for conflict of interest. In the insurance world an agent is a representative of the insurance company. A broker is a representative of the insurance buyer. The distinction is largely lost by many state licensing rules which have one license for everyone who sells insurance. Also, brokers and agents, in most cases get paid something by insurance companies – either bonuses or commissions. Hence the problem in NY. The attorney general is saying that brokers have a conflict of interest in their relationship to insurance companies and insurance buyers. Yep! I've long felt that there is at the very least a perceived conflict when insurance producers (agents or brokers) get paid based on a percentage of premiums paid. In addition, most agencies get bonuses and incentive payments for low loss payments and increases in premiums. My clients never have to worry about my advice. I never sell insurance and never accept fees or commissions from insurance agents or companies. I don't even let them buy me lunch!

My Service Standards / Emails And Messages - Most of you know of my promise to clients – return all phone calls in 90 minutes and return emails within 24 hours. Lately the technological gremlins have been attacking. If you don't receive an email response within 48 hours, assume the email never reached me and follow up. The same applies to phone calls unanswered for a day. Do any of your other partners promise this level of service?

Additional Insured On A Liability Policy - There are a fair number of misunderstandings as to additional insured status on a general liability policy. The issue comes up with contractors and subcontractors. In most cases the general contractor requires that the sub name the general as additional insured on the sub's liability insurance policy. The insurance coverage provided by an additional insured is limited to areas where the sub is responsible for injuries or damages.

Here's an example… ABC Inc. hires Bill's Plumbing to work on a few toilets. ABC requires (by contract) that Bills Plumbing name ABC as additional insured on the commercial liability insurance policy.

Case 1 – While moving pipe an employee of Bill's Plumbing injures a pedestrian. ABC is sued as is Bill's Plumbing. Bill's liability insurance will respond to both legal actions as the cause of injury is Bills Plumbing.

Case 2 – Ted's Roofing is working at the ABC site. A pedestrian is injured by a tool dropped by Ted. ABC and Ted's Roofing are sued. As Bill's Plumbing has nothing to do with this event Bill's liability policy would not respond for ABC.

Case 3 – While Bill's Plumbing is working in the building a pedestrian slips and falls on the icy walkway of ABC, Inc. ABC is sued. Bill's Plumbing's liability policy will not respond as Bill was not involved in the injury.

Lesson 1 – Don't be a pedestrian around ABC, Inc.

Lesson 2 – Requiring subcontractors to name you as an additional insured only protects you if the sub is involved in the accident.

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

Life Insurance - How secure is your life insurance? Do you have the right kind? Is the policy set up correctly? I can help. Call 207.284.0085 or email me at scott@icofmaine.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@icofmaine.com. Also check out my speaker's page at www.icofmaine.com/ispeaker.html.

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Scott Simmonds, CPCU
Insurance Consultants of Maine, Inc.
20 Sofia Road
Saco, ME 04072-9017
Phone 207 284-0085
Fax 801 991-4027
scott@icofmaine.com
http://www.icofmaine.com/

Unbiased Insurance Solutions
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Insurance Consultants of Maine, Inc. is an unbiased, fee-only insurance and risk management advisory firm. We don't sell insurance and never accept fees or commissions from insurance companies or agents.

Comments regarding insurance policies or products in this newsletter are for information purposes only and do not constitute an endorsement. We accept no fees or payments of any kind from any insurance organization or any company mentioned in this newsletter.

© 2004 Insurance Consultants of Maine, Inc. All Rights Reserved. We encourage sharing this newsletter in whole or in part if copyright and attribution (including my web address) are always included.