Carriers are rewarding customers with discounts for building and renovating homes to be more structurally sound – and these building standards make a significant difference in a storm. According to www.disastersafety.org, “FORTIFIED can be affordable at every price point and uses a unique systems-based method for creating stronger, safer homes. The program employs an incremental approach toward making new and existing homes more resistant to damage from hurricanes, tropical storms, hailstorms, high winds and wind-driven rain associated with thunderstorms. With three levels of FORTIFIED Home™ designation available – Bronze, Silver and Gold – builders can work with homeowners to choose a desired level of protection that best suits their budgets and resilience goals.”
The links below provide downloadable fact sheets explaining in greater detail FORTIFIED Homes in Alabama:
Your client hires a babysitter for the night, a chef for a dinner party or a gardener for a weekend. Do they understand their potential liability?
Many families form close relationships with their household employees, which makes having a conversation about coverage for domestic staff awkward and difficult to initiate. But the potential liabilities are too big to go unnoticed—and they don’t just apply to high net-worth homeowners. Anyone who hires in-home staff like nannies, butlers, chefs, housekeepers, gardeners, home health care workers and tutors all face liability.
“When an insurer looks at their risks, they think about if their house is insured properly or if they have auto covered, but they’re not realizing that they need to be aware of these additional areas that require liability insurance” says Julie Sherlock, vice president and national underwriting manager at ACE Private Risk Services. “Anybody who looks to employ somebody that’s going to have any type of exposure to their personal possessions, and/or their family, should look into coverage.”
A March 2012 whitepaper published by ACE reported that while 54% of high net-worth survey respondents employed domestic staff, 31% did not have appropriate employment practices liability coverage (EPLI) despite a high level of concern about being sued by an employee for injury on their property. Risks include injuries on the job through car accidents, criminal behavior such as identity theft or kidnapping and lawsuits for wrongful termination, sexual harassment or discrimination.
But protection and risk management practices can start before work even begins for both domestic contractors like nannies and one-time chefs and domestic employees who work on a regular basis multiple days a week. To minimize risks of employing household staff, Sherlock offers five tips to share with your homeowners clients:
Check references. You find out who people are through word of mouth and through friend recommendations, but you still want to be sure you know exactly who you’re employing.
Do a professional background screening. Look at criminal records, verify references, view credit reports and check motor vehicle reports.
Do another professional background screening. If you’re hiring somebody for a short time, completing one background check is fine. But if you’re bringing somebody on long-term, make sure you’re checking their reports at least every other year.
Maintain a clear employment contract. Outline responsibilities, payment terms, requirements and causes for termination. Be clear on what employees can and can’t do, or what they can and can’t be fired for—this will hopefully minimize the potential for a wrongful termination lawsuit down the road.
Review that process on that a regular basis.
When first discussing domestic staff coverage with a homeowners client, Bill Burbine, vice president and personal lines manager at Fred C. Church, Inc., suggests gaining a general understanding of what protection measures they’ve already taken and then educating them on best practices. “In the initial risk assessment, talk about employment relationships they have from part-time handy work to full-time domestic staff and then seek to understand what they’ve done in the past to document and protect themselves,” he says.
Although potential liabilities can fall under general property, homeowners and auto policies, added EPLI and workers comp coverages might also be useful. (Note that EPLI does not apply to domestic contractors such as babysitters or one-time chefs.) For these additional coverages, David Wall, vice president at Mississippi-based SouthGroup, suggests looking at state regulations about whether workers comp for domestic employees is required or available—and then closely reviewing the language on ISO forms for bodily injury coverage. For EPLI, “most of the markets I’ve seen thus far will limit that endorsement as a limit to the policy,” Wall says, noting that some carriers provide coverage for up to five residential staff members based on seniority.
According to Sherlock, who advises gaining insight into a client’s lifestyle in order to help mitigate potential exposures, “when talking about liability in general, you really want to look to understand not just the value of what your tangible assets are but investable assets as well.” Veiled coverages include crisis reputation coverage—used to mitigate name and reputation damage for clients in the public eye—or counsel shadow defense cover—used for personal attorneys to shadow the insurance company’s attorney.
Underestimating the potential of a liability lawsuit from a domestic employee and misunderstanding affordability of effective protection can be irreparable. Says Burbine: “This is an opportunity for independent agents to differentiate themselves, reinforcing the independent agent model and providing value to their clients by bringing these exposures to the table.”
A property manager is a person or firm hired by an owner to manage the rental and/or maintenance of a property. These individuals/firms add value by coordinating bookings, maintenance requests, and management of an owner’s property on their behalf. With this, property managers face specific risks and should be knowledgeable about what coverage they need to protect their business and employees. Here are the top five recommended coverage types for property managers:
Professional Liability Insurance also known as E&O Insurance (Errors & Omissions): Professional Liability or E&O Insurance is important for anyone who provides a professional service and/or regularly gives advice to clients. One of our A-rated carriers indicates that covered risks can include: alleged or actual negligence, defense costs, personal injury (including libel or slander), copyright infringement, temporary staff and independent contractors, and claims arising from services provided in the past. Professional Liability / E&O can also protect against wrongful eviction or tenant discrimination claims. We cover more about E&O on our website.
Workers Compensation: If a business has more than 5 employees, state law requires the business owner to carry work comp coverage. Even if that company does not have 5 employees, the exposure still exists. This makes it critical for property managers with temporary staff or independent contractors to be knowledgeable of the work comp coverage carried by anyone working for them as an independent contractor. We recommend that any independent contractors carry their own work comp coverage. This can help to reduce premium costs for the property manager’s work comp exposure. Learn more about and Work Comp on our website.
General Liability Insurance: Business owners purchase general liability insurance to cover legal disturbances due to accidents, injuries, and claims arising out of negligence. General Liability insurance policies protect against bodily injury, property damage, medical expenses, libel, slander, the cost of defense, and settlement bonds. They can also cover the premises and operations exposures arising out of the location of the business as well as damage from defective products or operations performed. Other related coverages may also fall under general liability insurance. Coverage amounts are typically expressed in terms of $1,000,000 increments and form the corner stone of any business asset protection plan. If independent contractors carry their own GL insurance, this can also help reduce the property manager’s insurance premium.
Property Insurance: We’ve mentioned Property Insurance coverage in previous blog posts. Business Insurance Now suggests that commercial property be one of the first types of coverage a new enterprise should look into. “This coverage protects you from some of the risk that the property your company owns could be lost stolen or damaged. If you don’t own the building where you do business, you’ll only need to cover the building’s contents.” Business personal property insurance protects items such as fixtures, furniture, office equipment, inventory, and supplies that are housed on or off site. Another critical property coverage is Business Income, which will reimburse a business owner for lost income due to a property loss.
Cyber Liability: For property managers who handle any of their bookings, leases or rentals via the Internet, cyber liability coverage is incredibly important. According to www.irmi.com, “cyber and privacy policies cover a business’ liability for a data breach in which the firm’s customers’ personal information, such as social security or credit card numbers, is exposed or stolen by a hacker or other criminal who has gained access to the firm’s electronic network.” They indicate that cyber liability policies “can cover expenses such as notification costs, credit monitoring, costs to defend claims by state regulators, fines and penalties, and loss resulting from identity theft.” Cyber Liability is not to be confused with technology E&O insurance.
At SSIA, our account executives are well schooled in the types of coverage property managers should carry, and we are happy to provide a complimentary business review to make sure you are covered properly. Contact us to learn more (251) 923-4463!