by Eddie Rodriguez, CAIB | May 27, 2014 | Research Centre
So your bags are packed and you’re ready to go.
But are you?
Vacations are a great way to relieve stress and get away for a while, but a call to your broker will ensure your trip goes smoothly and you don’t return home to unwanted surprises.
Step 1 – make sure your home is ready for vacation too.
Standard wording in a homeowner insurance policy limits coverage if you’re away over the winter months or “heating” season. The limitation relates to water in your pipes freezing, which could happen if your heating system also decides to take a few days off.
This coverage exclusion can easily be resolved in one of two ways: you can shut off the water supply to your home and drain your pipes; or you can have someone you trust enter your home every 24 hours to confirm your heating system is still operating. Make sure they can reach you, or are able to have the problem fixed on your behalf.
If you’ve chosen to turn off your water and have your pipes drained, you should be aware that toilets don’t completely drain of water. Try adding antifreeze to the bowls to prevent freezing should the temperature drop. Consider a marine antifreeze that’s ecologically friendly.
There’s no need to leave electronics plugged in while you’re away. Even if they’re attached to surge protectors, it’s still safer to unplug them.
To give your home that still lived-in look, you may want to leave a few things plugged into time-delayed sensors. But don’t stop there! Make sure your mail and newspapers are being picked up, or stop their delivery. You should also have snow removal (or lawn cutting) taken care of while you’re away.
Leave a spare key with a friend or neighbour, instead of hiding one around your front door. Same goes for the inside of the house – don’t hide your jewellery or valuables; store them in a safety deposit box.
Posting your beautiful vacation photos on social media alerts others that your home is empty. Even if the photos are intended only for friends, they can easily extend beyond this group. Share your pictures once you’re home!
Lastly, many people rent cars when they’re on vacation and needlessly pay for insurance coverage. You may be surprised to learn you’re already covered under your policy. If not, your broker can arrange it at a fraction of the cost of what rental agencies charge, and explain limits on vehicle types, values and locales.
Bon Voyage!
by Colin Moor, CAIB | Jan 2, 2014 | Research Centre
January 2, 2014. Parts of Ontario continue to be without electricity. Therefore, some people may have left their home as power is being restored. Here are some home insurance coverage reminders as well as some timely safety tips.
Homeowners insurance policies do not cover losses caused by freezing during the usual heating season in a heated portion of the home if someone has been away from their home for more than four consecutive days, UNLESS the homeowner has:
- arranged for a competent person to check the home daily;
- shut off the water supply and drained all the pipes and domestic water containers; or
- their plumbing and heating system is connected to a monitored alarm station.
If you do leave your property remember to:
- Turn off the main water valve and drain water from the pipes and flush toilets several times. Keep the basement drain clear.
- To prevent a power surge when the electricity does come back on, unplug all tools, appliances and electronic equipment and turn the thermostats down to minimum.
- Turn off all lights including Christmas lights, except one inside and one outside, until power is restored.
- Leave natural gas service on unless authorities tell you to turn it off.
- Lock your home.
Here are some other ways to keep safe, even if you do stay in your home:
- To prevent frozen pipes turn the taps on slightly so water can trickle through as pipes with running water will not freeze. Alternatively, turn off the main water supply and open the pipes completely.
- Take extra caution when using a wood-burning fireplace.
- Use a flashlight and not candles to reduce the risk of fire.
- Do not use appliances intended for outdoor use indoors, such as camping or heating equipment and gas barbecues.
- Keep your fridge and freezer door closed as much as possible. A full freezer will keep food frozen for 24 to 36 hours if not opened.
- If you see downed power lines, stay far away and report them to your local power authority.
Once power is restored:
- Do not enter a flooded basement unless it is absolutely safe to do so.
- Flooded appliances, electrical outlets, switch boxes or fuse-breaker panels should not be used until they have been checked by an electrician.
- Replace the furnace flue if removed, and turn off the fuel to the standby heating unit.
- Turn the thermostats up, wait a few minutes, then plug in the fridge and freezer back in. Wait 10-15 minutes before plugging other appliances back in.
- Turn on water supply.
- Check the food in your fridge and freezer for signs of spoilage. If in doubt, throw it out. Check the Food Safety website for details about specific foods
by Eddie Rodriguez, CAIB | Jan 28, 2013 | Featured, Research Centre
It’s a fact: as you attempt to achieve your company’s goals, you will naturally take a number of risks that may bring about accidental losses to your property, to your income, through liability to others, etc.
Perish the thought!
The harsh reality is that, unless you are properly prepared to prevent these losses – and to “transfer” them to an insurance company when they do happen – the consequences could completely destroy or cripple your business. That’s why we prefer to call “risk exposures” and their potential consequences:
“The Monsters“
Calling them “The Monsters” helps us remember that these are not simply words you find on some “risk assessment report” that lies forgotten on your company’s intranet.
So, with the goal of helping you become aware of some of the monsters you need be on the look out for, let’s take a look at 8 loss scenarios specific to technology companies.
By the way, if you’re thinking “I’m fine. I have business insurance”, just remember that a General Liability insurance policy (which is the most common type of insurance a business would carry), would NOT protect you in the scenarios listed below. That’s because General Liability is there to protect you only against claims of property damage and bodily injury .
Tip: As you read each example below, ask yourself: Could this particular Monster attack my business? What are we doing (other than insurance) to mitigate the consequences of this Monster’s attack? Do we have the proper insurance protection for this scenario?
OK, here we go:
Errors and Omissions in general:
The first monster that IT companies and IT professionals must be aware of is the infamous “E & O” monster.
‘E & O” stands for Errors and Omissions, aka Professional Liability …. or, as it is known in other fields, “Malpractice liability”.
It’s usually your clients who will wake up the “E & O” Monster and send it out to get you, when they feel that the financial loss they’ve just suffered was caused by:
– your company’s ERROR (something you did wrong) or….
– an OMISSION (something you, a as professional, should have done, but didn’t).
The “E & O” Monster also visits you when, for example, your client claims that your product failed to perform as expected.
What really sucks is that you can be sued, even if you didn’t make a mistake!
For example, let’s say you design a new invoicing system for a client and the client alleges the final system lacks the functionality they wanted. This happens, even though you delivered what you thought was required. If your client sues you (and you have the right insurance coverage) your insurance company will defend you, which protects you from having to pay the potentially huge ‘defense costs’.
Monster # 2: Where’s My Data? *
How did “corrupted data” create a $900,000.00 loss for a software vendor?
A communications company sues for lost revenue and expenses to recover billing files for wireless customers.
The billing files were deleted by their software vendor while updating the system.
Indemnity Paid: $750,000 / Defense Costs Paid: $150,000
Monster # 3: Software Fails to Maintain Employee Hours *
A company provides timekeeping hardware and software to its customer.
The software doesn’t function correctly; it fails to maintain employee hours worked and correctly apply the hourly and overtime rate of pay.
The failure results in over/underpaying employees and the need to replace the timekeeping clocks. The customer sues the provider of the hardware and software.
Indemnity Paid: $440,000
Monster # 4: Missed deadlines cause a breach of contract *
It’s was time for a company-wide upgrade, and a firm decided to outsource to an information technology and management services company all the replacement of hardware, software and infrastructure as well as telecommunications and related services in order to upgrade its ability to serve customers and address any problems.
The information technology and management services firm fails to meet deadlines due to a high turnover of staff and a breakdown of project management.
Indemnity Reserve: $2,000,000 / Expense Paid: $500,000
Monster # 5: Breach of Security *
A telecommunications firm is sued by customers claiming they were sold a defective system with inadequate security protections.
The customers claim the faulty system allowed individuals to access their phone system and, as a result, they incurred fraudulent overseas charges.
Indemnity Paid: $345,000
Before we move on, here a couple of interesting facts about data breach losses:
Based on a sample of 900 breaches reported to insurance companies 86% of the data breaches were discovered by third-parties (not by the companies whose systems had been breached), and 96% were avoidable with simple precautions.
Monster # 6: Defending software that performed as promised *
How about getting sued when you have not done anything wrong and your product performs as expected?
A software company was sued by a customer after he used the company’s cost estimating software.
The software itself was found to have functioned perfectly. The error was on the part of the user who later underbid a work project. The customer eventually dropped the case, but only after considerable legal expenses were incurred by the software company.
Indemnity Paid: $0 / Defense Costs Paid: $175,000
Monster # 7: Inability to deliver on marketing “promises” *
A personal computer assembler is sued by a group of consumers in a class action suit.
The suit alleges that the company’s equipment did not live up to advertised specifications. Citing issues such as lack of speed and poor upgrade capability, the consumers demand full refunds.
Indemnity Paid: $1,600,000
Monster # 8: Web design and integration services * *
Our policyholder was hired to create an e-commerce website for
trading and selling valuable collectibles. The client later alleged that our policyholder failed to deliver a working website and negligently recommended that the client purchase Web-enabling software from another company that then abandoned the project and the software.
Indemnity Paid: $180,000
Defense Costs Paid: $558,928
* Loss Scenarios (examples) marked with * provided by Chubb Insurance Company of Canada.
* * Loss Scenarios (examples) marked with ** provided by Travelers Canada.
I’ve limited this article to the brief explanation about Errors and Omissions and the other 7 loss scenarios because I know that most people won’t be naturally inclined to reading about insurance.
But when you think about it, being able to learn about real-life examples of what could happen to your business (without actually experiencing it) is a very simple way to identify potential risks ….. and that, my friend, is precisely step #1 to implementing a good risk management plan.
Insurance can help you when/if bad stuff happens. But there’s tons of stuff you can do, aside from purchasing insurance, to protect your business.
by Colin Moor, CAIB | Jan 16, 2013 | Research Centre
It’s that time of the year, and a hole-in-one competition is a great way to add excitement to a golf tournament.
While it may seem unlikely that a hole-in-one would occur, they DO happen … and as tournament organizer or sponsor you need to be prepared to pay for the big prize (such as a car) if a player achieves this feat.
So, how can you enjoy the benefits of a hosting the exciting competition … without the risk?
With a hole-in-one insurance policy (a real must for charity tournaments).
With one of these “prize indemnity insurance policies” if you have a hole-in-one contest winner, the insurance company becomes fully responsible for paying out the prize.
If you would like additional information or a quote for your tournament, just go ahead and contact us.
by Colin Moor, CAIB | Dec 24, 2012 | Research Centre
There are several ways you can purchase business and personal insurance.
You can buy it over the Internet. You can call an 800 number and buy it over the phone directly from an auto insurance company. You can call an insurance agent (also known as “captive agent”) or you can call an independent insurance broker. In some cases, you could even buy insurance from a bank or credit union.
How do these companies differentiate themselves?
Some brag about their superior service when you have a claim. Some tout how easy it is to buy from them.
So, who is your insurance provider?
Is it a bank, a credit union, a direct-to-consumer insurance company or a “captive agent” offering only one insurance company?
How about partnering with an independent insurance broker (a.k.a independent insurance agent), and know that you’re dealing with someone who works for you?
At Marhen Insurance we’re independent insurance brokers. That means we’re not tied to any specific insurance company.
If a “captive agency” or a bank only sells one-size-fits-all policies, all you can get there is a one-size-fits-all policy.
But you might be better off with a policy that fits you, not anybody else. If it fits better it might protect you better and help you sleep better at night.
This quick video explains some of the differences:
[youtube=http://www.youtube.com/watch?feature=player_embedded&v=w6no9-a0lpk&w=530&h=385&rel=0]
by Eddie Rodriguez, CAIB | Dec 13, 2012 | Research Centre
Let’s be honest: Even if you have a good understanding of what insurance does for you or for your business, deep inside, we all believe that peace of mind should be free, and that we shouldn’t have to pay a “premium” to enjoy it.
In reality, though, we all know that our modern society would not be able to function without the safety net provided by insurance.
As you attempt to achieve your company’s goals you will naturally take a number of risks that may bring about accidental losses (to your property, your income, through liability to others, etc.).
While some losses you may be able to absorb (pay for) yourself, in many cases you will want to ‘transfer the risk’ and costs associated with those loses to someone else: an insurance company.
Click here to see some some scenarios where you would be happy that the risk was transferred to an insurance company, and that the loss did not directly impact your company’s ability to survive and grow.
By the way, risk management is not merely about insurance.
Insurance is simply one of many ‘risk management techniques’ you’ll need to implement in order to achieve your growth and profitability goals.
Still, a day doesn’t go by without someone telling me that they really don’t enjoy – OK, they hate – paying for something they can’t see or touch, and hope they never have to use.
So, what could possibly be worse than paying for insurance?
Paying for it month after month, year after year … believing that “you’re covered”, only to find out – when the unexpected happens – that you are NOT.
Ouch!
How do you prevent that from happening to you?
Here’s the most important message I want to share with you in this article: Traditional ‘business insurance’ and traditional “Commercial General Liability” (CGL) policies are not sufficient to protect technology businesses against what I call “The Monsters” (risks).
In fact, as an IT consultant, software developer, game developer, web designer, owner/executive in charge of a data centre or other type of tech business you face risks that are usually excluded from coverage in regular business insurance policies.
Regardless of how mysterious, complex, or boring you find insurance, you must make sure that your policy provides coverage for the types of risks your technology business is exposed to.
Some of the coverages that you may need include:
- Technology-Specific Errors & Omissions
- Copyright or Trademark Infringement Liability Protection
- Property – Including, as needed, EDP Property and R & D Property
- Network and Information Security Liability
- Reputation Injury and Communication Liability
- Business Interruption
- Commercial General Liability
- Equipment breakdown coverage
- Media Liability Protection
Also, ask your broker to show you that the policy definitions of “business activities” actually match what your business does, and if not, ask if the policy allows for inclusion of your own definitions.
It’s true that properly insuring an IT business can be tricky. Our industry has product managers at insurance companies struggling to figure out ways of covering you from “social-media risks” and other Monsters that didn’t exist a few years ago.
The good news is leading insurance companies are finally paying attention. They’ve developed quality insurance products designed specifically to protect tech companies.
By the way, I know that some smaller tech firms try to get by without proper “risk transfer” (insurance) plans.
If you know anyone operating without an insurance safety net, please remind them that one of the truly sad realities of today’s business world is that you can be sued … even when you didn’t do anything wrong … and even after your software or service performed as expected.
Sure, you might win the lawsuit … after trading a big chunk of your hard-earned money for legal defense fees.
In fact, legal costs generally represent a large portion of the overall Professional Liability claims cost. That’s due to the need for expert (read: more expensive) witnesses and lawyers.
Bottom line – given the complexities of a technical business it makes sense to seek out well-designed, technology-specific insurance coverage from insurance companies – and brokers – who specialize in technology. That is the first step in eliminating any looming doubts about whether or not you are covered.
