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Capitol Benefits Blog
 State minimum insurance requirements are minimal. Most states demand less than $100,000 for bodily injuries and $50,000 for property damage. Some states require only $10,000 for property damage coverage.
How many cars valued at greater than $10,000 travel the highways? How many trucks carrying cargo are worth more than $10,000? $50,000? $100,000?
According to the 2010 census, the median family net worth exceeded $200,000. That amount includes houses, cars, savings, retirement funds, cash in the bank, college savings, and furniture and personal effects. Half the families are worth more, half have assets less than $200,000; all of it is hard earned.
If the family is underinsured for liability, their net worth is vulnerable to be seized in a lawsuit based on injuries or property damage caused by any family member driving a vehicle. The car owner and the car driver become parties to the suit.
Bodily injuries sustained in car wrecks devastate lives. People unable to work, the high cost of medical treatment, rehabilitation expenses, and the pain and suffering can only be compensated with money. The money comes from the insurance company or the liable party’s personal wealth.
Not convinced you need higher limits? Bankruptcy options are available?
Not all liabilities are released in bankruptcy. Many states have specific legislation disallowing debt reduction for certain accidents, most notably driving while intoxicated. Wage plans reduce take home pay by as much as thirty three percent. Many employers do not tolerate either bankruptcy or wage garnishments.
Still not convinced? How about a selfish motivation?
Other drivers are either uninsured or underinsured. Most insurance companies will not provide uninsured motorist coverage in limits greater than the liability limits of the policy.
Uninsured and underinsured motorist coverage from your policy pays on behalf of the driver who hits you if they are poorly insured. In a classic exercise of the golden rule, insurance companies only sell limits commensurate with the protection you offer others.
Proper limits of liability allow you to protect yourself from the improper coverage other people maintain.
So how much coverage is enough? What are reasonable limits of liability?
Ask your insurance professional. And consider this:
Your assets are your excess insurance coverage. This means that when the limits of your policy are reached, your assets are at risk.Excess insurance – umbrella policy – is available in one million dollar layers over your automobile and homeowners’ liability limits if those limits qualify – are high enough.Protect yourself against underinsured drivers by increasing your uninsured motorist coverage.
 While many homeowners assume otherwise, their insurance policies do not cover a sewer backup. However, there is separate coverage available. In comparison with the cost of dealing with the aftermath of a sewer backup, coverage is a true bargain. Homeowners are responsible for repairing and maintaining the portion of pipeline that connects their home with their city’s sanitary sewer main. Since this pipeline is actually owned by the homeowner, any parts of it that extend into the public right of way or street are also included. Working on these pipes is a costly chore, so it is important for all homeowners to know how sewer backups are caused. The following three types of blockages are the most common causes of backups.
Tree Roots Blocking Pipelines
Trees thrive on water, so their roots often gravitate toward cracks in sewer lines. While the growth starts with a few tiny roots penetrating the pipe, they eventually get thicker and expand. They often enter pipelines near the joints, which results in major blockages. Unfortunately, tree roots can eventually span the entire length of the pipe and cause a complete clog. If trees owned by the city are suspected of causing problems, contact their cleanup department immediately. They will often sample the roots to determine who is responsible for cleanup. In some situations, a combination of city trees and privately owned trees are to blame. When this happens, the city and the property owner must split the cost of cleanup and repairs.
Heavy Rains Clogging Storm Sewers
If a sanitary sewer or storm sewer is unable to contain the amount of rain falling, a backup may occur. Water typically enters the home through washtubs, toilets or sump wells in the basement. While damage is most common in the basement, it may occur anywhere in the home. To help avoid this problem, make sure there is a sump pump to drain the water and a generator that will run the pump if the power goes out.
Sanitary Main Blockages
Several types of blockages are possible in the sanitary main. Blockages result in sewage backing up into the home itself. Fortunately, this occurrence is gradual, so there is time to call a plumber before the house is overtaken with sewage. In some cases, there may be a rapid flow of water coming in through the basement. When this happens, it is important to call the city’s public works office immediately.
Each of these events can be very costly. Sewage and standing water can also be hazardous to human health. In addition to this, they destroy nearly every tangible object they meet in a home. A simple calculation of the cost of replacing damaged items and comparing it to the cost of insurance is enough to clarify the importance of adequate coverage. To learn how to obtain protection from sewer backups, discuss available options with an agent today.
 It is common for neighbors to disagree. For example, one person may think that their outdoor dog barking at people passing by is an asset for keeping them safer from intruders. However, a neighbor who enjoys peace and quiet would think the dog is a nuisance. Another neighbor may enjoy listening to his or her music at a loud volume, but others who live in the neighborhood will likely find it annoying. Some situations may not be about noise. People who live in neighborhoods with a uniform appearance may hassle a new homeowner who decides to paint his or her house a clashing color. Whether the source of the problem is noise or something else, disagreements between neighbors can escalate into lawsuits. Before this happens, it is important to know what types of provisions a homeowners policy provides for legal issues.
Many people think that a homeowners insurance policy covers most types of lawsuits filed against them. For this reason, people are usually not as careful as they should be about preventing them. For example, consider a new homeowner who moves into a subdivision, replaces the existing fence with higher boards and paints them contrasting colors. If the subdivision has rules about the permissible colors and acceptable maximum height of fences, they will try to get the new homeowner to comply. Homeowners who refuse may find themselves facing a lawsuit for violating the subdivision’s code. The courts will likely favor the subdivision’s rules, and a homeowners policy will not provide coverage for the legal battle. Therefore, it is important to understand exactly what legal issues are covered under the policy.
Loud noises, eyesores and changes are all issues that do not physically harm another person. While they may be annoying, they are not issues that would be covered by a homeowners policy if they escalate into a lawsuit. Always remember that a homeowners policy offers protection for two types of liabilities, which are property damage and bodily injury. If the family dog bites someone on the property, a guest falls off a broken step or one of the kids breaks a visitor’s car window, a homeowners policy covers such issues.
Since coverage is limited to two types of physical damage, it is important to work as hard as possible to settle disputes with neighbors. For example, if neighbors complain about a barking dog, it may be best to enroll the dog in training or purchase a no-bark citronella collar. Trim overgrown shrubs or trees that neighbors may complain about. Many people get angry and frustrated when a neighbor makes accusations or complains. Anger is usually what causes people to be stubborn and refuse to compromise. Always listen to what neighbors have to say, and try to understand the situation from their perspective. Use common sense to arrive at a solution that is favorable to both parties. However, the best way to avoid anger and confrontation is to fix possible nuisances before neighbors complain. For additional information about avoiding problems and lawsuits with neighbors, discuss the issues with an agent.
 Weather patterns have become increasingly erratic over the last several years. Heat waves, droughts, mudslides, and increased hurricane activity have become the norm. In 2004, four major hurricanes pummeled Florida; the Gulf Coasts of Louisiana, Mississippi and Alabama are still recovering from 2005’s Hurricane Katrina and its ensuing floods. Between these disasters and increasing attention from politicians and the media, the problem of global climate change has become a major issue. As a result, the insurance industry has begun to devise new products and strategies for dealing with this problem.
Some insurers are beginning to offer specialized “alternative energy insurance” policies. For example, one company is writing policies to cover alternative energy system performance. This policy insures against the risk that a deficiency in the design of alternative energy technology will result in the under-performance of a facility. The company designed it to help owner-operators of facilities meet the needs of lenders concerned about their investments. Another company has broadened its coverage for commercial buildings to include alternative energy systems. It also will insure against loss of income when alternative energy systems suffer damage and extra expenses when the building owner must buy power from the grid while the system undergoes repair.
At least one insurer offers special coverage to encourage commercial building owners to replace destroyed buildings with new ones using green technology. It gives the property owner several green technology options, including:
- Non-toxic, low-odor paints and carpeting
- Energy-efficient electrical systems
- Interior lighting systems that meet independent energy efficiency standards
- Water-efficient plumbing systems
- Enhanced roofing and insulation materials to reduce heat loss.
Anticipating less severe and less frequent losses, the same company offers rate credits to green building owners. It has found that most losses in traditional buildings are from electrical fires, heating and air conditioning system fires, and plumbing leaks. The company expects green technology to make these events less likely.
Another insurer has introduced for commercial building owners a new policy that encourages green building. It features coverage for:
- The increased cost of green building alternatives
- The expense of re-engineering and re-certifying green buildings
- Vegetative roofs, and
- Additional time to restore operations so that building repairs can include green alternatives.
Insurers are also educating their clients about the implications of climate change. Recognizing that courts could hold businesses liable for future environmental damage, insurers have worked with corporate boards and officers to encourage planet-friendly business practices. Their hope is that actions taken now will reduce the number and size of future liability insurance claims.
While only a small number of insurers offer specialized policies for green construction now, the success of these products will encourage other companies to follow suit. Also, as green building technologies become widespread, the desire to attract and retain business will force insurers to compete with policies of their own. Insurance agents can identify companies that offer these coverages and make coverage recommendations to property owners. As businesses and households everywhere take steps to reduce their carbon footprints, make certain that your insurance coverage is keeping up with those steps.
Visit www.capitolbenefits.com for an insurance quote today.
 One of the favorite rituals of the spring season is the yard sale. Homeowners love them because they change cleaning from a dreaded chore into a profitable enterprise. However, the whole experience can quickly turn into a nightmare should someone slip and fall, and you are considered legally liable. That’s why it is necessary to know exactly what your homeowner’s insurance covers before you tag the first piece of merchandise.
The standard homeowner’s policy provides you with $100,000 liability coverage for bodily injury or property damage that you or your family members cause to other people. This coverage extends to both the cost of defending you in court and any judgments against you, up to the limit of your policy.
Another feature of the liability protection provided by your homeowner’s insurance is the no-fault medical coverage. This is designed to permit a person who is injured on your property to submit their medical bills directly to your insurance company, eliminating the need for a lawsuit. Most policies include between $1,000 to $5,000 worth of no-fault medical coverage.
Of course, we live in a society that loves any opportunity to sue, so it may be wise to add to your liability protection. As a first step you can increase the amount of liability coverage provided by your homeowner’s policy to $300,000 or $500,000. For additional protection, you need an umbrella or excess liability policy. This type of coverage typically costs between $200 to $350 per year for $1,000,000 of additional liability protection.
The Insurance Information Institute (I.I.I.) offers the following list of points you should consider about insuring your yard sale:
- One-Time Event – Yard sales that are one-time events for the sole purpose of selling unwanted personal items are usually covered under a standard homeowner’s policy. However, it is important to have enough coverage, so be sure to check with your insurance agent.
- Frequent Yard Sales – If you plan to have frequent yard sales, you should purchase a separate policy for business liability, or an in-home business policy.
- Charity Fund Raiser- If the purpose of the sale is to raise money for a charity; you will probably be covered under your homeowner’s insurance policy. But it’s also a good idea to contact the charity to see what type of insurance protection they can extend you.
Visit www.capitolbenefits.com for an insurance quote today.
 When it comes to finances, diversity is usually the watchword. You’ve been told time and time again that diversifying your investments keeps your portfolio healthy. While diversity may be the way to go when investing, it is not necessarily the most prudent course of action when buying commercial property/casualty insurance. The majority of agents have historically encouraged clients to put all their eggs in one basket, and the results of a new survey prove they have been right all along.
In November 2005, Wausau Insurance commissioned Boston-based Atlantic Research & Consulting to poll two hundred risk managers, chief financial officers and other executives responsible for purchasing coverage. The researchers found that 89 percent of the firms realizing a savings through integration cut the overall cost of their risk management program by a minimum of 4 percent.Approximately 35 percent realized savings of 7 to 10 percent. The most significant gain stemmed from combining workers’ compensation and general liability under one carrier.
Eighty-one percent of the financial executives surveyed stated they saved a minimum of $1 in lost productivity expenses for every $1 they saved by reducing workers’ compensation claim costs. This is an increase from last year in which 70% reported such savings.
Seventy-five percent of those polled said they save at least $1 in lost productivity expenses for each $1 saved by reducing expenses for general liability, property and commercial auto lines claims. This is up from 60% who indicated such savings last year.
The majority of respondents noted that they saved a minimum of $2 in lost productivity expenses for every $1 saved by reducing claim costs across all four lines of coverage. Additionally, for second consecutive year respondents indicated slightly higher lost productivity savings from workers’ compensation than from the other three lines of coverage.
Some of the other findings the survey uncovered included:
-Mid-sized companies with more than 500 employees reported much larger productivity savings by reducing claim costs across all lines than companies with 100-500 employees.
-General liability and property along with workers’ compensation and general liability were indicated as the two coverage pairings most likely to display the greatest efficiency when combined with one carrier.
-Approximately 70 percent of those surveyed indicated their company had integrated multiple lines of insurance with one commercial carrier. This is a decline from the previous year, when 89 percent said they integrated multiple lines with one insurer.
Visit www.capitolbenefits.com for an insurance quote today.
 Over the past several years, millions of people have begun writing weblogs (or “blogs,” as they are more commonly known.) There are as many reasons for blogs as there are blogs. Some people keep them as a journal to let distant friends and relatives know what’s happening in their lives. Others write about subjects that interest them, everything from gardening to NASCAR. Blogs often act as forums for people’s opinions or news reporting. These types of blogs invite controversy; in extreme cases, they may invite lawsuits if a person or organization takes offense at a particular post. If that happens, can the blog’s author count on his insurance coverage to pay for his legal defense and judgments?
Unfortunately, if he has a typical homeowner’s insurance policy, the answer is probably no. This policy pays amounts for which the policyholder (the insured) is legally liable, plus the costs of legal defense, for bodily injury or property damage done to someone else. The policy defines bodily injury as meaning bodily harm, sickness or disease; it defines property damage as injury to, destruction of, or loss of use of physical property. Neither of these definitions includes saying or publishing something that injures another’s reputation or feelings. Consequently, the policy is unlikely to cover a blog post. For example, if Joe writes in his blog that Bob sleeps with a teddy bear, and Bob sues him for invading his privacy, the homeowner’s insurance will not pay for Joe’s legal defense or for any judgment against him, because Bob suffered neither bodily injury nor property damage.
Insurance companies may offer special personal injury coverage that they can add to homeowner’s policies. This coverage pays for the insured’s liability for several offenses, including oral or written publication of material that violates someone’s privacy, and oral or written publication of material that disparages someone’s goods or services. For example, imagine that Joe writes in his blog that the meatloaf at Bob’s Diner tastes like gravy-covered roadkill. Bob suffers an immediate loss of business, and he sues Joe for libel. The court awards Bob $200,000. If Joe has personal injury coverage, his insurance will pay for his lawyers and the $200,000 judgment (or his limit of insurance, whichever is less.)
Another potential source of coverage is a personal umbrella policy. An umbrella provides additional insurance in situations where a loss has used up the amounts of liability insurance under homeowner’s or auto policies. It also covers some liability losses that those policies do not cover, such as personal injury losses. Umbrellas typically carry a deductible of $250 or $500. In the previous example, if Joe does not have personal injury coverage with his homeowner’s policy, but he does have an umbrella, the umbrella will pay for his defense and $199,750 of the judgment ($200,000 minus the $250 deductible.) If he does have the coverage on his homeowner’s policy, and the court awards Bob $1,000,000, the homeowner’s policy will pay until its limits of insurance are used up, and the umbrella will pay the rest.
Blogs are fun and interesting, and they can be informative. However, in a litigious society, it is very possible that something posted in a blog can result in a lawsuit against the writer. Everyone who writes a blog should consider that possibility and think about buying some extra insurance.
Visit www.capitolbenefits.com for an insurance quote today.
 “It will never happen to me” is a multi-purpose rationale people use to avoid doing what they know they should, especially when it is difficult or requires extra effort. Interestingly this rationale also applies to small and medium-sized businesses wanting to avoid the issue of employment practices liability (EPL).
Research proves there is no reason for employers to adopt such a rosy outlook. According to November 2005 figures from Jury Verdict Research, the average compensatory jury award for employment practices liability lawsuits has risen by an annual average of almost 5 percent. The average amount for these awards in 1998 was $164,200, which rose to $218,133 in 2004. A significant factor in this trend has been the U.S. Equal Employment Opportunity Commission’s aggressive approach in prosecuting offenders. The agency obtained an unprecedented $168.1 million in awards in 2004.
Jury Verdict Research went on to note that since 1998 the most frequently targeted businesses are retail and service companies. Although these lawsuits outnumbered those brought against manufacturing and industrial companies by more than three to one, the average awards against manufacturing and industrial companies were far higher. Awards in manufacturing and industrial company suits averaged $250,000, as compared with $137,853 for retail and service companies.
With statistics such as these, why would any business risk liability when it comes to employment practices? Specialty insurer Beazley commissioned research to find the answer to that question. What they discovered was that many small and mid-sized businesses have developed a sense of prosecutorial immunity from the media’s bias toward reporting only awards against Fortune 500 corporations. This reinforces the impression that EPL claims are only a problem for large companies that maintain public visibility.
What should a small company do to protect itself from EPL claims? Start by reducing your exposure with a comprehensive employment practices program. Your program should not only spell out company policy, but must be specific in terms of the consequences for violating that policy. The next step you need to undertake is to protect your company’s financial assets. You can transfer this risk by purchasing Employment Practices Liability Insurance. While sound employment practices and well-trained managers can help reduce the risk of EPL suits, if an employee feels they have been unfairly treated, they can take legal action at the drop of a hat. For this reason you should consider the financial protection an EPLI policy provides.
Visit www.capitolbenefits.com for an insurance quote today.
 You’re about to buy a new home or new car and you believe you’ve found the perfect one for you. You need to insure your new treasure, but for some reason you can’t find a carrier to cover it. Is there any way you can find out why you seem to be uninsurable? The answer is simple, get clued in with CLUE.
CLUE, also known as Comprehensive Loss Underwriting Exchange, is a database of consumer claims compiled by a company called ChoicePoint that insurance companies access when they are underwriting or rating a homeowner’s or auto insurance policy. An insurer can request a report for a piece of personal property that it is underwriting and receive claims information provided by the insurance companies who previously insured the property. This report also includes details such as the policyholder name, policy number, date of loss, type of loss, amounts paid, and a description of the property covered. The database contains up to 5 years of personal property claims history.
Under the Fair Credit Reporting Act, ChoicePoint can produce a CLUE report when a person or company intends to use the information in connection with the underwriting of a consumer’s insurance policy. This includes situations where the consumer asks for an insurance quote or applies for insurance; or when the insurance company or agent requests the CLUE report.
Why would an insurance company investigate loss history? Actuarial studies have shown a high correlation exists between a consumer’s prior loss history and future loss potential. This history, along with other factors, can be considered when a company is deciding whether to issue a policy and what premium to charge. It is legal for a company to investigate a prior owner’s loss history in determining your eligibility for coverage.
As a consumer, you are not without rights when it comes to CLUE. Under the Fair Credit Reporting Act, you have a right to see and correct information on your claims history reports. If you have been denied insurance or charged a higher premium, contact ChoicePoint or ISO within 60 days of your denial to request a free report. Otherwise, you will be charged a small fee for your claims history report. You can find more information by logging on to ChoicePoint’s website at http://www.choicepoint.com/industry/insurance/pc_ins_up_2.html
Visit www.capitolbenefits.com for an insurance quote today.
 Credit card fraud has blossomed in the past decade. By becoming vigilant in recognizing the red flags and taking proactive measures you can substantially reduce potential credit card fraud for your business.
Credit card fraud occurs in two primary areas:
- On the business premises
- Through internet and phone purchases
As both situations are different, there are several different strategies you can use to protect yourself.
Business Premises
Personal interaction with your customers allows for better credit card fraud management for the following reasons:
- Set purchase limits before identification is required. Train employees to examine the types of purchases as smart fraudsters will try to stay under these purchase limits.
- Examine picture identification. Remember to always scrutinize the identification to look for signs the picture ID was altered.
- Visually inspect the credit card itself, especially hologram features which many credit card companies now employ and which are very difficult to duplicate. If the hologram image does not move when you slant the card this is a definite red flag.
- Compare the credit card number with lists of fraudulent or stolen credit card numbers.
- Visually inspect the signature on the credit card receipt and compare it to signatures on the receipt to see whether the credit card signature was altered. The signature panel on most cards today has duplicate color designs of the credit card company name. Fraudsters will often try to tape over the original signature and apply their own.
- Examine the raised credit card numbers and name on the card to look for ‘ghost’ or smear images. Any apparent defect should be treated with suspicion.
- Call the credit card company to confirm that large purchases will be authorized by the credit card company.
- Set a specific procure to ensure that all duplicate copies of credit cards receipts are properly destroyed.
Internet and Phone Purchases
Indicators of credit card fraud and safeguards you can employ for phone and Internet purchases include:
- Ensuring you request sufficient contact information from customers including phone numbers and both mailing and billing addresses.
- A rush order is the most popular preference of credit card fraudsters.
- Purchases which are initiated from a ‘free’ e-mail address or which employ a forwarding e-mail address should be considered highly suspicious. Ensure that you obtain an IP address or an e-mail address which has a domain so you can track the buyer.
- Be especially cautious about orders that appear larger than normal or are purchased with more than one credit card or several cards where the numbers follow in a sequence.
- Obtain phone contact information if the billing address is not the same as the shipping address, especially if it’s a P.O. Box number.
- Carefully scrutinize all order forms and never fill any order where the order information is incomplete.
- Take caution with overseas shipping and especially if any of the above criteria occurs. Certain geographic areas such as Eastern Europe, Africa, Malaysia, Indonesia, Turkey, and Pakistan are considered high risk where overseas sales are concerned.
- Where possible, use an address verification system and always confirm the screening process if you use a payment gateway system.
- Don’t hesitate to contact the credit card company if you have doubts.
- Don’t be reticent to even ask the customer to mail some form of photo ID for expensive items or large orders.
- Clearly indicate your credit screening process on your web site.
Visit www.capitolbenefits.com for an insurance quote today.
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