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Co-insurance in Commercial Property Insurance Explained

Co-insurance in Commercial Property Insurance ExplainedWhile policyholders should strive to provide the insurer with complete and accurate values for buildings and business personal property that are the subject of insurance, policyholders should also understand the basic workings of the co-insurance condition. In this article, authored by Craig Stanovich, we’ll review potential penalties for underinsurance.

Meet Mitch  – a commercial real estate investor, who owns, under his real estate corporation, over 50 buildings located in the city, as well as the nearby suburbs. Mitch’s real estate portfolio consists primarily of leased retail and office space, with some service occupancies, as well. Mitch is preparing to purchase another building in the city and is arranging a mortgage with a new lender – Paperless Lending. To his surprise, the lender has rejected an insurance binder obtained by his risk manager Jess, from his insurance agent. Paperless Lending does not accept building insurance with co-insurance – and the binder given to Paperless Lending lists 90% co-insurance clause.

Co-insurance As Mitch relies on his risk manager Jess, to understand his insurance coverage, he has never read his insurance policies. But now he is alarmed by “co-insurance,” as it seems to Mitch – based on his limited dealings with health insurance – that his insurance company will never pay more than 90% of any loss that he has, regardless of the amount or limit of insurance he has purchased. This sounds problematic, and he immediately arranges to meet with Jess and his insurance agent, Diana, to discuss this matter.

Co-insurance Explained At Mitch’s request, Jess and Diana explain the concept of co-insurance. At the outset, they make clear to Mitch that co-insurance in property insurance is not the same as the 80/20 cost sharing in some health insurance policies. Instead, in property insurance, co-insurance generally means Mitch must purchase a certain limit of insurance on his building – the limit purchased must be no less than a denoted percentage of the full value1 of the building. Here, the percentage is 90%. Because Mitch did obtain, as part of his due diligence, a professional appraisal that determined the replacement value of his building as $5 million, Jess and Diana tell Mitch that he must purchase a limit of no less than 90% of $5 million or $4.5 million. If he does not purchase a building limit of at least $4.5 million, Mitch will face a penalty as a “co-insurer.”Read More »Co-insurance in Commercial Property Insurance Explained

Child Passenger Safety Requirements by State

ALABAMA
Children ages 6 until 15 are required to wear a seat belt in all seats.
Booster seats or child safety seats are required until age 6.
Children must be in forward-facing seats or convertible seats until age 5 or 40 lbs. Infant seats and convertible seats are required to be rear-facing until passenger is at least 1 year old or 20 lbs. in weight.
All child restraint laws are standard enforcement.
Read More »Child Passenger Safety Requirements by State

Step-by-Step Hurricane Preparation

emergency preparedness kit

What actions should property owners in the predicted path of the storm take to prepare?

The Federal Emergency Management Agency (FEMA) provides invaluable advice on what you should do when you receive a hurricane watch or hurricane warning alert from the National Weather Service for your area.

As the hurricane approaches, here’s a checklist of what to do as the storm approaches, broken down by hours:

1. What to do when a hurricane is 48 hours from arriving

– Review your evacuation route(s) & listen to local officials.
– Review the items in your disaster supply kit; and add items to meet the household needs of children, parents, individuals with disabilities or other access and functional needs or pets.Read More »Step-by-Step Hurricane Preparation

Is Your Website Compliant with ADA

In 1990, the Americans with Disabilities Act (ADA) was signed into law to give disabled people the same access to American life as those without disabilities.  The Act is intended to give equal access to all Americans to all public spaces.  The law was initially thought of as only applying to brick and mortar locations and couldn’t address access to the Internet since the Internet wasn’t fully commercialized until 1995.  However, in response to a landmark case in Florida (Gil v. Winn Dixie), the court declared that Title III requirements of the law apply if the website is ‘heavily integrated’… Read More »Is Your Website Compliant with ADA

How to Soften the Risk of Your Home Based Business Being Robbed

Home robberies can be devastating, even more so for people who run a home business. While the average loss during a burglary is over $2,000 dollars, that number can rise if you have a home business due to operation disruptions—especially if you don’t have business insurance. That’s why small business owners should try to minimize the risk of a burglary, and any consequences should one occur. Here are key things to consider.

Be Proactive, Not Reactive, With the Basics

Robberies may seem like something that happens to other people. Because of that, preventive measures—like an alarm system—often aren’t implemented until after a burglary has happened. Don’t wait. A security system should be your top priority, considering that one study found that 60 percent of burglars said alarms lead them to seek other targets.Read More »How to Soften the Risk of Your Home Based Business Being Robbed

Securing vacant properties checklist

Vacant properties face endless security risks, including vandalism and theft, fire hazard, visitor safety and more. Whether you own or manage commercial or residential buildings, securing your vacant building is more important than ever. Download  for tips and insights to help you plan and prepare for property security threats.

Landlord & Tenants and Waiver of Subrogation

Mitch, aka “the coffee man,” has owned and operated his coffee shop for almost a decade. His shop is located on Market Street and comprises about 900 square feet of leased space in an office building. Mitch is having his attorney, Diana, negotiate the renewal of his five-year lease with the building owner/landlord. Diana has arranged to meet with Mitch and Mitch’s insurance agent, Dennis because the landlord is proposing changes to the lease’s insurance requirements. SUBROGATION While the lease requires Mitch to purchase insurance for his contents (and the landlord has agreed to insure the building), the landlord is… Read More »Landlord & Tenants and Waiver of Subrogation

Insurance Coverage for Pet Care Services

We understand the unique needs of pet care services industry, which is reflected in the customized coverages our markets provide, such as:
✓ Pet Grooming Liability Endorsement – Automatically included for Pet Grooming and Pet Day Care and Overnight Boarding services. Covers injury to dogs, cats or other domesticated animals as a result of providing or failing to provide pet grooming services.
✓ Boarding Kennel Endorsement – Automatically included for Pet Grooming and Pet Day Care and Overnight Boarding services. Covers injury to dogs, cats or other domesticated animals in the care, custody or control of the policyholder.
✓ Veterinarians Professional Liability Coverage – Optional add-on coverage in the event of a professional error (“medical incident”) that results in injury or loss of an animal up to $2M/$4M (Occurrence/Aggregate).
✓ Animal Floater – Optional add-on coverage in the event of accidental injury, death, damage, theft or escape of animals belonging to others that are in your care, custody or control, on your premises for examination, treatment, grooming, boarding or breeding, or while in transit.
✓ Business Income – Mobile Operations Vehicle Endorsement – Optional add-on coverage extends BIEE coverage for loss of business income due to direct physical damage to policyholder vehicles/trailers that provide services on the road.

Coverage Scenarios:

Read More »Insurance Coverage for Pet Care Services

Products Liability Coverage from Paperless Insurance

In December of 2016, a furniture chain agreed to pay $50 million to settle a lawsuit after its dressers tipped and fatally injured small children. All product manufacturers, designers, and retailers are exposed to a multitude of risks that can end in litigation. With manufacturing and retail contributing $3.8 trillion to the U.S. economy, there is a vast need for protection in these industries. However, some products are too hazardous to be included in a standard CGL policy as they have an obvious potential for costly and widespread lawsuits. New products can also be excluded as they lack a track… Read More »Products Liability Coverage from Paperless Insurance

Why You Need Business Insurance

At 10:30 on a Sunday evening, Steve Lapenta’s phone rang. An employee of Lapenta’s small natural foods business, The Bridge in Middletown, Conn., was on the line. “You should come down here,” the employee said. “A truck just crashed into the building.” Lapenta hurried to the scene where he met a cadre of police cars, fire trucks and flashing lights—and a carpet cleaning van that had plunged halfway through the front door of the small storefront where he and his staff of eight make tofu and other soy-related food products. Luckily, no one was injured. The van driver was taken… Read More »Why You Need Business Insurance