Insurance Consultants Of Maine Newsletter

Insurance Consultants of Maine Newsletter
Scott Simmonds, CPCU
November, 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

Case Study: Product Recall - ABC Manufacturing has received calls from several customers indicating a problem with a guard mechanism on a machine they manufacture. It seems that the guard assembly ABC started using six months ago vibrates to a point where a bolt comes loose. Several accidents have occurred when the guard failed. One customer employee was injured.

ABC has a few problems. First, they need to get the word out that the bolt comes loose – warning current customers and recommending maintenance to fix the problem. Second, ABC needs to redesign the guard and a retrofit for machines already sold. ABC is also looking at a lawsuit from the workers' compensation insurer for the injured customer employee.

ABC's general liability coverage will respond to the lawsuit for the injured worker. The policy will provide coverage for the defense of the action and an award or settlement that comes out of the case.

The expenses in handling the work of fixing the problem are not covered by standard general liability insurance.

Broad product recall insurance is available. Some insurers will provide the coverage (at an extra premium) within the package policy. Many specialty insurers offer the coverage too. Read the policies carefully as exclusions and limitations can be extensive. Some products you sell may be excluded by the policy. Polices outline what expenses are covered. Work with your insurance advisor to find the right protection or a plan to manage the risks of a product recall.

Biggest Business Insurance Mistake #13 - No Fiduciary Liability Coverage - The federal law ERISA makes the administrator of employee benefit plans personally liable for errors. That means that the head of HR who mistakenly fails to add coverage for a new spouse is liable (using personal assets) for the oversight. Your company can't reimburse the employee either. Personal liability!

The only protection or indemnification allowed is a Fiduciary Responsibility Insurance Policy or the more limited, Employee Benefits Liability coverage. Premiums are quite reasonable compared to directors and officers or other professional liability policies.

You need Fiduciary Liability Insurance if you have group health insurance, a pension, 401k or other savings plan, disability coverage, life insurance, etc.

Personal Insurance Tip - Consider Coverage For Libel, Slander, False Arrest - Some homeowners policies include coverage for “personal injury” - libel slander false arrest, invasion of privacy. Most don't. Perhaps your personal umbrella policy includes the protection. Another reason to buy an umbrella policy!

Don’t think you need to have coverage for libel? I had a client who’s home was broken into by some neighborhood kids. They thought it was a good place to party while the family was out of town. The police were called and charges brought. One of the little cretins was the paperboy for the family. Naturally, newspaper deliver was cancelled. The paper called the homeowner to learn why the service had been cancelled. “Because your paperboy broke into my house,” was the honest reply. A slander suit was threatened by the boy's family against the homeowner. Sure was nice not to worry about who was going to defend me in that suit. Oops! I mean my client sure was happy he had coverage for slander.

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Free Teleseminar: How To Avoid the Biggest Business Insurance Mistakes - Join me in a free teleseminar for insurance buyers. December 14 from noon to 1:00 Eastern. Details on my website: http://www.icofmaine.com/. You'll get easy to implement ideas on how you can improve your insurance.

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@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.

20 Biggest Mistakes In Business Insurance - Readers of 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. I've received many comments from readers who find the information quite helpful.

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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.