Problems with Computer Insurance Coverage

In years past many business owners and their insurance agents added specific computer coverage to their insurance plans. That may have been the right path at the time - it may not be right now.

A separate coverage part means a separate limit of coverage that may or may not be correct. A company that has $575,000 of coverage for business personal property and $125,000 of computer equipment coverage could be under-insured in one area and over insured in another, leaving gaps at the time of a claim. This risk was outweighed by the coverage provided by computer insurance, namely, mechanical breakdown and power surges. Many insurers now provide these perils as part of property insurance - you may not need separate computer coverage to get the extra protection.

A separate coverage section also may mean two deductibles assessed at the time of a loss. There could also be coinsurance penalties.

Insurance Newsletter - June - Work Comp Focus

June, 2007 Issue 85 - Since 2000

This Month, a Workers Compensation Focus!!!

Learn the Rating Plan of Your Work Comp Policy
Each insurance company has several workers' compensation plans. Many have three - Preferred, Standard, and Sub-Standard. Some insurers have only Standard and Preferred. The difference is in the rates. Preferred rates are, naturally, lower than standard. Find out what plan you're in. Find out what you have to do to get moved into a lower rated plan.

The current insurance marketplace is as competitive as any in 15 years. Push your insurer to provide you with the best rate.

Learn the Credit Structure of Your Work Comp Policy
Insurers include discretionary credits or debits in the pricing of your w/c policy - discretionary by the underwriter. These factors can increase or decrease your premiums by as much as 25%. They're used as competitive tools by insurers - reduce the premium to be more competitive - increase the premium when they can get it. The factors are loosely tied to loss control and management programs. In reality, they are entirely subjective.

Review your policy to learn if you've been debited or credited. Track your factors at renewal. Ask for a better rating to reward good loss experience.

Control Your Work Comp Costs - Get a Copy of Your Audit Worksheets
Ask your insurer to provide you with a copy of the Audit Worksheet prepared for your most recently expired policy. This document provides the details of how the insurance company determined your final premium. It lists employees, classifications and payrolls. Look for errors such as the inclusion of overtime and incorrect classification of employees.

Having an employee classified in a higher rate code could cost you big premium dollars.

Workers Comp Tool - Looking for Guinea Pigs
The experience modification is a big part of the final premium you pay for your workers' compensation. I've developed a simple tool that will evaluate the inner workings of your mod. I'm looking for a few employers to test this out on. I've used it with several clients. I'd like some outside feedback. Let me know if you're interested - Scott@insurance-coveragelaw.com. For helping me out, I'd be glad to spend some time with you on how you can improve your experience modification in the future.

Informative Insurance Teleseminars
I hold regular teleseminars to help insurance buyers with their insurance. My goal is to provide useful, easy-to-implement ideas. These are not sales presentations, but solid info you can use to make better insurance decisions.

Email me to register or for more information - Scott@insurance-coveragelaw.com.

June 20 - For BMW Dealers - Through special arrangement with BMW this is part of a special series of teleseminars for BMW dealers only.

June 28 - Simmonds on Bank Insurance - Property Insurance, General Liability, and Work Comp Issues for Banks

(These sessions are free to insurance buyers. Insurance people are welcome at a $75 fee.)
All sessions start at 10:00 am Eastern and last for 45 minutes. If you have a topic suggestion for future teleseminars, let me know.

Maine and Other Stuff
While spring may be here, it certainly isn't warm. We've had the heat on several times over the past two weeks. The fireplace has been in use often.

We graduated two kids from school in the past month. Christine from college, and Jarred from high school. Christine already has a teaching position lined up in Mexico, Maine (2 hours northwest from here).

Time To Brag... I have recently been recognized with "Board Approved" status by the Society for Advancement of Consulting, an organization accepting only the top 1% of consultants nationwide. I'm the fourteenth consultant to be so honored worldwide and the first in the insurance business.

Wildlife Report: Humming birds at the feeder all day long. the finches are everywhere. No bears this spring. Plenty of squirrels. Turkeys every so often.

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. 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. See my speaker's page.

Please Forward This Newsletter To Your Business Associates

Scott Simmonds, CPCU, ARM Insurance Consulting Phone 207-284-0085 Fax 802-992-4027 Scott@insurance-coveragelaw.comwww.insurance-coveragelaw.com
See My Insurance Blog - www.InsuranceBuzzer.com

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

© 2007 Insurance Consultants of Maine, Inc. All Rights Reserved. We encourage sharing this newsletter if copyright and attribution (including my web address) are always included.

A reporter asked about product liability coverage. My reply:

Product liability lawsuits are a primary concern for thousands of US businesses. If McDonald's can be sued for hot coffee, what chance does a smaller business have?

-Beware of excluded products. Some insurers are gun-shy about certain products and industries - aircraft parts, gun manufacturing, auto parts, boat equipment... Even though you don't directly manufacture, if you make a part that goes in a widget, which goes in a plane, you may not have coverage.

-Watch your aggregate limits. Liability and umbrella insurance policies have a cap for the total payout under product liability - called a product aggregate limit. Once you use up the limit there is no coverage.

-Get a bigger umbrella. So called, umbrella liability insurance provides additional limits of liability. The current insurance marketplace may mean higher limits at lower price. Get quotes and measure the value of the increased coverage.

Expanded Info on the 126 Questions to Ask Your Insurance Agent - Question 61

Question For Your Agent #61 - Am I covered for the loss of trade secrets if an employee goes to a competitor?

This question is designed to promote a conversation about risk management. Loss of trade secrets is not covered by most insurance policies. Even your employee dishonesty coverage excludes such, as the loss is not to tangible property.

While there are specialty (read, "expensive") programs out there with limited coverage for loss of trade secrets, your best bet is internal security and contractual protections. Speak with your employment law attorney about what can be done to prevent others from profiting from the work and the innovation you paid for.

Frankly, this is a tough area. Most states restrict impinging on a former employee's ability to work by use of noncompete agreements. Confidentiality and trade secret agreements may be an option. Insurance really isn't going to help you.

Talk with your attorney.

Download your free copy of 126 Questions To Ask Your Insurance Agent