Month: November 2013

Bearing the Risks of Condo Ownership

Posted on by shasha insurance

Living in a condo can be risky business if you fail to discover where you are vulnerable so that you can remove or at least lessen your liability.  As always, any liability assessment starts with the condo association’s master policy.

There are four basic types of risks that associations must protect themselves against. The first is property loss, which means physical property as well as intellectual property such as legalities of the association’s operations. The second is liability resulting from a person or legal entity filing a claim against the association. The third is any unplanned loss of revenue or increase in expenses in an accounting period, and the fourth is losses resulting from the inability of an association employee or board member to continue in their current capacity.

In order to manage the risk associated with these losses, condo associations generally have master policies that include:

  • General Liability – for claims of bodily injury or property damage
  • Workers’ Compensation and Employer’s Liability – coverage of employees against injury while they are working
  • Directors & Officers – to cover claims of negligence or malfeasance by association leaders
  • Fidelity Bond – for claims of misappropriation of association funds

These policies can be written separately, but they usually are combined into one umbrella policy.

As a unit owner, you need a personal policy to cover personal property. Your policy is typically written on Form HO-6. The liability coverage on Form HO-6 is similar to other homeowner’s policies, but the property coverage is not.

Form HO-6 covers your personal property, as well as improvements, additions, and private ownership spaces such as balconies, private entranceways and private garages. However, the policy only covers physical damage to property if it is caused by a named peril that is specified in the policy. Named perils are standard and include events such as fire, lightning, storm, explosion, riot, aircraft, smoke, vandalism, theft, and broken glass.

Your personal property is not covered for damage resulting from perils listed in the exclusions section of your policy. These usually include damage that occurs from enforcement of building codes, earthquakes, floods, power failures, neglect, war, nuclear hazard or intentional acts of destruction.

As the condo unit owner you also have to be vigilant about property loss in the master policy coverage.  In general, a condo association’s master insurance policy will require you to share a part of the loss if the building is damaged by fire, lightning, vandalism or the weight of ice or snow. Remember, as the common owner of shared spaces, you assume the liability connected with damage to those shared spaces. Your personal insurance coverage will provide you some relief from this debt, but be advised that you may want to consider augmenting it. That’s because a policy written on Form HO-6 entitles you to collect up to $1,000 for loss assessments charged to you by the condo association. Be aware that Form HO-6 has a unique feature in this regard. When a loss is covered by both the condominium’s master insurance policy and your individual policy, your homeowner’s insurance will only pay for the balance of the loss that remains after the master insurance policy pays 100 percent of its limit.

Understanding the features of your personal coverage as well as the master policy will help you know your rights and responsibilities in the event it becomes necessary to collect on your coverage.

Take Steps to Prevent Workplace Bias Claims Before They Happen

Posted on by shasha insurance

The Equal Employment Opportunity Commission recently reported that work-related bias complaints increased to 75,768 during 2006 compared with 75,428 the previous year. Discrimination complaints had previously risen to a seven-year high of 84,442 in 2002, but then steadily decreased from 2003 to 2005. The most frequent complaints have remained consistent throughout the years, including allegations of discrimination based on race, sex or retaliation.

This upward trend in the number of suits filed should raise alarms for employers everywhere. The legal cost to defend an allegation of discrimination that reaches trial has been estimated between $75,000 and $200,000. This doesn’t include hidden costs like work time lost because of gathering evidence or giving depositions. It also doesn’t include costs associated with an appeal or with payment of a final judgment.

The National Center for Preventive Law (NCPL) at the California Western School of Law in San Diego recommends that employers practice what it refers to as “preventive law.” That means assessing legal risks and instituting solutions to prevent them from occurring.

To assist employers in creating an effective prevention program, NCPL has established the following guidelines:

·            Manage Compliance – Develop a corporate policy regarding discrimination and document in the employee handbook. Document the specific ways in which corporate policy enforces compliance. Maintain a record keeping system that indicates what actions were taken if policies were violated.

·            Contain Risk – Identify overt employee conduct that could lead to a lawsuit. Also look for less obvious misconduct that encourages or promotes discrimination.

·            Respond to Change – Maintain the longevity and continuity of your policies by including mechanisms that allow for necessary updates caused by new business activities or other organizational developments.

·            State Compliance Policy – Take every opportunity to restate corporate compliance policies, including such practices as having department managers discuss them during departmental meetings or by distributing fliers that remind employees about these policies.

·            Top Level Endorsement – Provide continuing opportunities for senior management to oversee and promote corporate compliance policies.

·            Create Compliance Accountability – Hold all staff members accountable for compliance in every activity they initiate or oversee.

·            Ensure Program Fairness – Be sure practices treat all employees fairly and guard against retaliation for raising compliance issues.

·            Maintain High-Level Oversight – Establish a Compliance Officer who has the authority to initiate, coordinate and review corporate compliance efforts.

·            Reward Success – Promote continued compliance through rewards such as monetary compensation.

Know What Red Flags to Look for when Purchasing Your First Home

Posted on by shasha insurance

According to the National Association of Realtors, most average home buyers look at 10 to 12 homes before making a purchase. However, some can painstakingly look for months, even years, before finding the one.

With such a long and tiring process, it’s very easy to get starry-eyed when you finally find the house with the perfect exterior, outdoor space, paint, room sizes, and so forth. Within a month, you’ve bought and moved into your new home. It’s at this point that you discover the roof is leaking and the foundation is cracked; suddenly, everything isn’t as perfect as you imagined.

A lot of homebuyers, especially those buying their first home, get caught up in a situation just like the above by focusing most of their attention on all the pretties and easily fixed dislikes of a home. All the red flags that signal the house might be more expensive or more trouble than it’s worth are overlooked or ignored. That’s not to say that your perfect house should be nixed for having a few flaws, but you do want to avoid having one of the largest purchases you’ll ever make turn out to be a lemon. Here are a few tips on some common problem areas:

1. Foundation

Foundations are one of the most expensive repairs facing a homeowner. Therefore, it should be one of the first things a homebuyer checks. Look for any cracks in the stone or concrete basement walls, brick fireplace wall, around all windows and doors, and along the outside brick veneer. These can be the first sign of an structurally unsound foundation and should be further inspected by a professional before the home is purchased.

2. HVAC

If the home has HVAC to heat and cool it, then make sure to ask about the system’s age and operation, look for any poorly connected vents, and watch and listen as the unit runs. Minor issues with the system can reduce how energy-efficient the home is and increase electric bills, while a total replacement can cost several thousand dollars in immediate expense.

3. Electrical

A home built in or before the 1930’s could still have knob-and-tube electrical wiring. This can be a problem if it has been tampered with, such as from attic insulation being blown-in atop the wiring. Such tampering can create dangerous fire hazards. Furthermore, most insurers don’t consider this type of electrical system safe and will charge you higher premiums or turn you down entirely. Keep in mind that rewiring the entire home will be a multi-thousand dollar expense.

4. Water Damage

Homes that have had water damage or leak issues might be hiding several expensive fixes and dangerous health issues like mold. Look for the signs of past leaks, such as any brown or white stains along the basement, main level, and upper level walls; mold growth under sinks; and horizontal stains along any bare floors. While fresh paint, especially in a basement, may just be updates, it could also be designed to hide the stains of water damage.

5. Look Twice

The first walkthrough of a home is often with rose-colored glasses. Even if you want to make an offer, take a few days to collect your thoughts and return to view the home at least one more time.

6. Pricing

There’s a big difference between getting a good deal and coming across a home with a price too good to be true. Suspiciously priced homes or sudden large price deductions can be indicators of an undisclosed problem, which is why a home inspection is so important.

7. Home Inspection

Home inspections can be a buyer’s best friend and a seller’s worst nightmare. Never make an offer before getting a home inspection. Get a second opinion anytime a home inspector files an inconclusive report.

Be safe rather than sorry.  First-time homebuyers can avoid many of the pitfalls to buying a home by just knowing what red flags to look for and not ignoring them.

Practice Safety When You Travel to Work

Posted on by shasha insurance

You rely on your company to provide a safe environment while you are on the job. However, your company relies on you to act safely when you are traveling to and from work.

No matter how you travel, every one is vulnerable to the possibility of an accident. However, of all the means of travel, walking probably provides the most risk. That’s because pedestrians are vulnerable to every form of moving vehicle. The American College of Emergency Physicians reports that 68,000 pedestrians were injured in traffic crashes in 2004. On average, a pedestrian is injured every eight minutes in the United States. That’s why it is imperative that if you walk to work, you follow the American College of Emergency Physicians’ recommendations for pedestrian safety:

·   Use sidewalks.

·   Know and obey safety rules (e.g., if a “don’t walk” signal starts blinking when you’re halfway across an intersection, continue walking).

·   Cross only at intersections and crosswalks.

·   Look left, right and left again for traffic before stepping off the curb.

·   Be sure you are seen by oncoming traffic.

Of course, pedestrians aren’t the only travelers who are vulnerable when commuting to work. Drivers also face a number of risks because they travel during rush hours when traffic is at its peak. In fact, InjuryBoard.com says that your commute home from work may actually be the most dangerous time to drive. The site goes on to note that although 12 a.m. – 3 a.m. Saturday and Sunday mornings are considered the two most deadly times to drive during the week, the deadliest time period overall is actually from 3 p.m. – 6 p.m. Monday through Friday. More drivers are on the road in the afternoons, and these drivers are generally tired from working, distracted by the problems that occurred during the day, and in a hurry to pick up their children or get them to an activity or event. 

Even though afternoons pose a greater safety threat, all rush hour driving makes it necessary for you to practice extreme caution:

·   Leave early enough to get to work on time without having to speed.

·   Travel at a speed that is suited to the road conditions.

·   Obey traffic signs and signals.

·   Yield the right-of-way at intersections.

·   Don’t swerve from lane to lane.

·   Signal before you make a turn.

·   Stay in the right lane while driving so that cars can pass you on the left where you can see them.

Keep these tips in mind so that you can arrive at and return home from work safely, every day.

Will Your Insurance Protect you from a Facebook Lawsuit?

Posted on by shasha insurance

Mostly everyone knows that the use of social media has grown by leaps and bounds over the past decade.  What many people don’t realize are the unique risks that come along with social networking. Anyone using Facebook, MySpace, LinkedIn, or other social networking sites should exercise extreme caution in what they decide to say on-line.

As an example, in 2009 a teenager in New York sued some of her classmates and their parents, accusing the classmates of bullying and humiliating her in a Facebook Forum.   Whether or not the allegations are true, the teenagers and their parents require legal resources to pay for the possible judgments against them.

Many people believe a standard homeowner’s insurance policy will cover them in such a situation.  In fact, it probably will not provide the necessary coverage.  A standard policy covers bodily injury or property damage done to someone else.  It defines bodily injury as sickness, harm or disease, and it defines property damage as destruction of or injury to physical property.  Neither definition includes publishing or saying something that injures another person’s reputation. Hence, the policy is not likely to cover a Facebook post.  In other words, the policy is unlikely to cover the act of making someone else feel miserable due to social networking.

A good source to consider for additional coverage is a personal umbrella policy.  This kind of policy provides additional insurance in circumstances where a loss has depleted the amounts of liability insurance offered under a homeowner’s policy.  Umbrella policies usually have a deductible of $250 to $500; but have the potential to protect the policyholder from financial devastation.  

As Americans become more exposed to risk through social networking, they should choose their words carefully on any social networking site.  Additionally, they should speak with an insurance professional to see if an umbrella policy is a good match for their insurance needs in an increasingly risky world. 

Protect Your Officers with Drive Other Car Coverage

Posted on by shasha insurance

Mary is a junior partner in a law firm and drives a car that the firm owns and insures. She is unmarried and her children are not old enough to drive, so she does not carry a personal auto insurance policy. The firm’s auto insurance covers her as a partner and she doesn’t own another car, so she sees no need to have her own policy. Most of the time, this is not a problem. However, spring break comes and she takes her kids to DisneyWorld. She rents a car at the Orlando airport and never gives a thought to whether her firm’s insurance will cover her if she has an accident with the rental. In this case, a phone conversation with the firm’s insurance agent would have been a good idea.

While driving back from the Magic Kingdom one night, Mary accidentally rear-ends a new Lexus. The damage to the other car is extensive; Mary looks to her firm’s auto liability coverage for the cost of repairing it. The ISO Business Auto Policy covers the person or organization shown in the policy declarations (the information page at the beginning.) In this case, the name shown in the policy Declarations is the name of Mary’s firm. The policy goes on to say that, for liability insurance, the firm is an insured and so is anyone else using, with the firm’s permission, a covered auto the firm owns, hires or borrows, with some exceptions. Unfortunately for Mary, the firm didn’t rent the car; she did. She rented the car in her name. Consequently, the firm’s insurance will not cover her liability for this accident. She will be forced to pay for it out of her own funds.

However, there are a couple of policy changes that the firm can buy that would solve Mary’s problem. The first is an endorsement called Drive Other Car Coverage-Broadened Coverage for Named Individuals. The insurance company will require the insured to list the names of one or more individuals on the endorsement. The change extends several of the policy’s coverages so that they apply to the listed individuals and their resident spouses. This endorsement comes with some significant limitations:

* It extends to the listed individuals coverages that the policy already provides; it does not add coverages not provided. If the firm’s policy does not provide collision coverage on any its vehicles, Mary will not have collision coverage on a car she rents.

* It covers the named individual’s spouse only while a resident of the same household. If Mary is married to Jim, Jim automatically has coverage for a car he rents in his name. If they separate, however, Jim loses that automatic coverage because he no longer resides in the same household as Mary.

* The only family member it automatically covers is the resident spouse. It will not cover any other family members in the household unless the endorsement specifically lists their names.

An alternative to this endorsement is to list individuals’ names in the policy declarations along with the firm’s name and attach an endorsement called Individual Named Insured. It covers the individual listed in the declarations and automatically covers the person’s resident spouse and family members. It also covers these individuals should they injure another of the firm’s employees.

These policy changes affect several coverages, including liability, uninsured motorist, medical payments, and physical damage. An organization should consult with a professional insurance agent to discuss the endorsements’ details and identify the one that will best insure the concerned individuals. With the right coverage in place, Mary can enjoy her vacation without having to worry about who will pay for the fender-bender.

Is the Aluminum Wiring in Your Home a Problem Waiting to Happen?

Posted on by shasha insurance

Any electrician will tell you that copper wiring should always be used for the electricity in your home. But copper is expensive and that can be a hindrance, in some instances more than others. In the mid 1960s to the early 70s copper was far too expensive to be used in homes and was replaced by aluminum as the preferred material.

Aluminum wiring that was installed during this time period is called “old technology” wiring. Such wiring has properties that make it a potential fire hazard. When subject to stress over a period of time, aluminum wiring will deform more rapidly than copper. Likewise, prolonged exposure to heat will make aluminum expand far more quickly than copper. Aluminum wire is extremely brittle and is subject to corrosion from oxidation. This corrosion interferes with its ability to properly conduct electricity.

If you suspect your home has aluminum wiring, there are certain waning signs to look for that indicate you may have the potential for a fire:

·   Face plates on outlets or switches are warm to the touch

·   Lights that continually flicker when they are on

·   Circuits that don’t work properly

·   Smelling burning plastic when you are near outlets or switches

Unfortunately, not all failing aluminum wired connections issue warning signals. Some aluminum wired connections have been known to fail without any prior indication of trouble.

What methods of remediation are available to homeowners that will prevent a tragedy from happening? One way is to eliminate the aluminum wire itself.  Depending upon the style in which your house was built and the number of basements and attics you have, it may be possible to rewire your home. An electrician would install a copper wire branch circuit system, which would essentially eliminate the function of the existing aluminum wire inside the walls. This is expensive, but it is the most effective solution to the problem.

A less expensive alternative is the crimp connector repair. This involves attaching a piece of copper wire to the existing aluminum wire branch circuit with a specially designed metal sleeve. The metal sleeve is called a COPALUM parallel splice connector. This special connector can only be installed with the AMP tool that was developed for this purpose. The AMP makes a permanent connection. The repair is completed with the addition of an insulating sleeve around the crimp connector.

There are two other repair methods that are significantly less expensive than COPALUM crimp connectors, however, neither of these repairs is considered as safe. The first of these, called “pig tailing”, involves attaching a short piece of copper wire to the aluminum wire with a twist-on connector. The copper wire is connected to the switch or wall outlet. These connectors have proven to overheat over time.

The second repair uses switches and outlets labeled “CO/ALR”. These devices perform better with aluminum wire when properly installed than the types of switches and outlets usually used in the old technology aluminum branch circuit wiring.  However, CO/ALR connectors are not available for all parts of the wiring system. These wiring devices are also not fail proof.

Protecting Your Condo Against Floods

Posted on by shasha insurance

Flood insurance is a horse of a different color when it comes to the types of coverage available because it must be obtained through the Federal Emergency Management Agency (FEMA). Under the National Flood Insurance Program (NFIP), there are flood insurance guidelines and policies for both the condo association and the individual unit owner.

The condominium association is responsible for maintaining all forms of property insurance necessary to protect the common property against hazards to which that property is exposed. If the condominium is located in a Special Flood Hazard Area as designated by the federal government, it is the responsibility of the condo association to provide adequate flood insurance protection for all common property.

The Residential Condominium Building Association Policy (RCBAP) Form is designed for buildings owned by condominium associations that have at least 75% residential occupancy and are located in communities covered under the flood insurance program. High-rise and low-rise residential condominium buildings can be insured under the RCBAP. The program enables the association to manage flood insurance needs according to their insurance requirements. Under the RCBAP, the entire building is covered, including the common areas, individually owned building elements within the units, and commonly owned personal property if the policy is written with contents coverage.

The RCBAP is a replacement cost policy. This means that no depreciation deduction is taken at a loss settlement. The maximum available limit is $250,000 per unit times the number of units. Buildings that are not insured for at least 80% of their replacement cost or the maximum amount of insurance available for that building under the NFIP would be subject to a co-insurance penalty at settlement.

Since the association’s coverage of building elements within their unit would be primary, and the unit owner’s personal coverage considered excess coverage, unit owners should obtain information about the by-laws and building coverages provided by the association.

In addition to building elements, unit owners should cover their personal property as well as structural improvements they have made. The policy that addresses the insurable needs of residential unit owners is the Dwelling Policy Form. This form can cover building elements within units, improvements made by unit owners, flood loss assessments and personal property owned by the unit owner or it can simply cover the unit owner’s personal property depending upon how the policy is written. It may not, however, be used to cover the cost of co-insurance or deductibles. An individual unit’s coverage cannot exceed the $250,000 building policy limit for single-family dwellings in program communities, or the $35,000 building coverage limit in emergency program communities.

There are options for covering improvements within units made by the unit owners. If the unit owner purchases contents coverage under the Dwelling Policy Form, coverage is also available for the interior walls, floor and ceiling, if not otherwise covered under the condo association’s flood insurance policy. The coverage limit is 10% of the amount of the contents coverage. If a unit owner uses the contents coverage to insure improvements, it reduces the personal property limit.

If you need assistance in finding flood insurance coverage for your condo, please give us a call.

Keeping Your Construction Site Safe Means Separating Fact from Fiction

Posted on by shasha insurance

With continued emphasis on safety, many companies have developed a knee jerk response to the subject, that is, they are squarely in favor of safety programs, but seldom take the time to determine if currently held beliefs are actually true. This attitude results in a knowledge deficit that can cause a company to foster an unsafe working environment for its employees.

Let’s expose some of these myths and replace them with facts:

·   Safety programs eliminate all risk – Safety is usually defined as the control of recognized hazards to achieve an acceptable level of risk. Risk can never be completely eliminated because as work conditions change, new risks can develop from those changes.

·   Safety is a series of actions – Safety is the result of workers’ actions, not the actions themselves. Safety is the outcome you can expect if tasks are done properly and there are no unforeseen events. Accidents happen because certain unexpected events prevent a task from being completed as intended.

·   Safety is an entity unto itself – When safety is departmentalized, employees transfer responsibility for safety to others. Safety is seen as someone else’s job. Employees need to be trained that safety is part of the corporate culture, which makes it everyone’s responsibility. The department is only there to expedite the flow of information among all segments of the workforce.

·   Safety is guaranteed if you follow OSHA standards – Even OSHA is wise enough to realize that no collection of rules can cover every possible hazard. That’s why the agency developed the “General Duty” clause that says if recognizable hazards develop for which there are no rules, you are obliged to fix the problem as though a rule existed.

·   Safety practices translate into a less competitive bid – Contractors who incorporate safety procedures into their operations have the best shot at long-term success because of numerous cost advantages, such as lower overhead and cheaper insurance rates.

·   Safety programs can solve all problems – Safety is an outcome that results from having a delivery process, and managing the effort required to produce the desired outcome. The process is the incorporation of best safety practices in all aspects of the operation. Only the management function is the responsibility of the safety department.

·   Safety is achieved by adding more audits and site inspections – Auditing and inspections reveal what problems are occurring on the construction site and where they are happening. Neither action changes the reasons these problems exist. Audits and site inspections are only valuable if the information they generate is acted upon.

·   Safety practices are reinforced by incentive programs – Incentive programs can affect positive changes in behavior over the short-term. If left in place over a prolonged period, the level of awards has to be increased to maintain the same effect. To achieve lasting behavioral change, employees need to know that management supports safety practices and has zero tolerance for their violation.

·   Safety compliance is achieved through disciplinary programs – If punishment for violating a safety procedure is not administered immediately following the negative behavior, the connection between behavior and punishment is lost and the punishment becomes a drain on morale. Even if administered correctly, discipline is only one tool for accomplishing compliance. Selection, hiring, training, and compensation programs play as crucial a role in promoting desired behavior as discipline does.

·   Safety can be achieved through technology – Problems will not disappear with the introduction of a new technology if the underlying social system that produces those problems remains unchanged. If your firm pays lip service to following safety procedures, but violates those procedures in the name of productivity, no technology can help regardless of how often you track incidents. Eliminate the mixed messages and you can begin to develop a corporate culture of safety.