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Ingredient Manufacturers and Their Product Recall Risk

[highlight type=”light”]The following is a theoretical scenario.[/highlight]

Ingredient Manufacturers and Their Product Recall RiskUSA Sugar is a processor of sugar. They bring refined sugar into their production plant, where it is transformed into a liquid form and sent to USA Sugar’s customers, who use the liquefied sugar in various food manufacturing applications.

On May 15, 2015 the FDA contacts USA Sugar and notifies them that salmonella was found in beverage products manufactured by two separate companies. Both strains of salmonella have been traced back to USA Sugar’s liquid sugar product. After a series of tests, it is determined that the liquid sugar was in fact the source of the salmonella. It was also determined that the salmonella contamination occurred in the insured’s facility between March 3 and March 17, which was a period of roughly two weeks.  On March 17, all production lines were broken down and a thorough cleaning was performed. The products manufactured after the March 17 cleaning appear to be free of salmonella.

As a result of the findings, USA Sugar decides to perform a voluntary recall of all products manufactured between March 3 and March 17. In addition to USA Sugar’s recall, all products containing USA Sugar’s contaminated liquid sugar will need to be recalled. The FDA classifies all related recalls as Class I, meaning consumption could result in serious health problems or death.Read More »Ingredient Manufacturers and Their Product Recall Risk

3 Exposures to Consider on a Builder’s Risk Policy

3 Exposures to Consider on a Builder's Risk PolicyHard, Soft and Business Income Expenses

The resurrecting construction industry means that builder’s risk submission activity is on the rise. As such, it’s important to understand this line of business. Here’s an overview of some things to consider on a builder’s risk policy.

Construction contracts generally require the building owner or the contractor to purchase and maintain a builder’s risk policy. The policy provides coverage for loss or damage to the unfinished building’s construction materials on the work site during the course of construction, subject to certain restrictions and exclusions. The policy can also be extended to cover existing structures if the project is a renovation. Exposures are broken down into three general parts: hard costs, soft costs and business income or loss of rents.

Hard costs are the tangible assets that comprise the construction project; quite simply, the costs of material and labor associated with a project – also known as “sticks and bricks.”

Soft costs, also known as Delay in Opening Expenses, are usually covered and limited by special endorsements to builder’s risk property policy. Coverage is provided for additional construction
loan interest, real estate taxes, marketing and re-leasing expenses, administrative expenses, and architectural/engineering fees which are incurred as a result of a covered loss – one that causes delay in completion of a project. These expenses can be further broken down into two sub-categories: construction expense and additional soft costs.Read More »3 Exposures to Consider on a Builder’s Risk Policy

Insurance for Transportation Company

Insurance for Transportation CompanyGeneral Market Conditions – Primary Auto Liability

Due to capacity and decent loss history, the hard market that began in late 2012 is beginning to relax on moderate to good fleet accounts. However, carriers who dropped rates to target the most “vanilla” auto risks seem to have little interest in small fleet placements, distressed risks, and high hazard industry segments (such as energy).This means a continued trend of conservative risk selection as well as slow, but incremental rate increases for these types of accounts.

As a result, fleet submissions are flooding the growing marketplace in an effort to ensure the best pricing and terms available. Non-fleet risks are also being shopped due to the number of players who have exited the market or changed their appetite. This changing landscape provides opportunities to specialized carriers who have a clear target appetite, a proven history of writing transportation business, and consistency in handling claims and underwriting for auto risks.

Marketplace volatility continues in locations where a number of carriers are pulling out or restricting their appetite (Florida, Texas, and Louisiana specifically), as well in trucking niches like energy/tracking exposures, of which markets are leery. Additional factors include the nationwide driver shortage, further development of the Safety Measurement System (SMS) methodology, and the increased adoption of Central Analysis Bureau (CAB) in underwriting risks. The bottom line is commercial auto risks are being scrutinized and heavily underwritten, with every detail contemplated to help insurance companies improve underwriting results.
Read More »Insurance for Transportation Company

TRIA Bill Renewal in June

According to congressman Randy Neugebauer, Chairman of the Financial Services Subcommittee on Housing and Insurance, the Members on the Majority side of the Committee are to unveil a draft outline that would reauthorize TRIA, but also modernize and reform the Program. They are working with Members over the next two weeks to finalize that draft. I will also sit down with our Ranking member to solicit his feedback with the hopes of working on a bipartisan basis. From there we plan to release a draft bill with the intention of holding a mark-up in June.Read More »TRIA Bill Renewal in June

Working from Home Office

Working from Home OfficeWorking from home can be extremely rewarding for many businesses and industries like technology, consulting, mobile services (glass replacement, auto detail, construction), real estate, and many more… but it has its distractions. Here are some things we suggest when working out of your home:

1. Don’t use your workspace for non-business activities.Read More »Working from Home Office

Strong passwords: your first line of defense against cyber attacks

remember secure passwordChoosing a strong password – and remembering it – can be challenging, but it is your first line of defense against cyber attacks. The stronger your password, the more secure your computer and accounts may be. Learn how to select and store them safely:

Mobile Application for Suing

If you don’t think you can be sued – think again. And think hard. I have just come across an application that allows one to keep a track of the law suites. Business insurance can be a great remedy against such suites, including malice suites. In the end, the coverage you are buying often if not most of the times is to be used to pay for legal defense, rather than restitution. Look at this screenshot again and rush to get a policy. In the end, most of the office and retail businesses can easily afford insurance. And we can help.

Insurer not obligated to defend in false marketing suit

A federal appeals court affirmed that a sporting goods company’s costs in an underlying false marketing lawsuit are excluded from personal and advertising injury coverages within its general liability policy under the failure-to-conform exclusion. A three-judge panel of the 8th U.S. Circuit Court of Appeals in St. Louis ruled unanimously that Cannon Falls, Minn.-based Robinson Outdoors Inc. was not entitled to defense and indemnification costs under its insurance policies from its insurer, Westfield Center, Ohio-based Westfield Insurance Co. Robinson Outdoors marketed and sold hunting-related clothing that would eliminate human scent so that wild game would not detect a hunter’s presence.… Read More »Insurer not obligated to defend in false marketing suit