Your home is likely your biggest investment and protecting that investment is essential. A homeowners insurance policy provides protection against many of the threatening situations life can throw your way. The protection your policy secures for you and your family provides peace of mind in an unpredictable world. It’s not only the sensible thing to do. Many times, homeowners insurance is a condition of your home loan.
But, just what does your standard homeowners insurance cover? Know the ins and outs of your coverage before a catastrophe occurs. There are limitations to every policy and finding out where you stand before it‘s too late allows you to prepare, and, if possible, seek additional coverage.
- Floods: Standard homeowners insurance policies don’t cover flood damage. If your home is located in a designated flood zone, you likely had to obtain special flood insurance as a condition of purchase. You may have purchased your flood insurance through your insurer, or through the flood protection program offered by FEMA (Federal Emergency Management Agency) at a special rate. If you’re concerned about the possibility of a flood near your home, you should speak to your insurance provider and take steps to obtain coverage.
- Mold: Household mold, destructive mildew, wet rot and fungus are all over the news these days. They can easily destroy drywall, damage foundations, cause odor problems and even impact the health of you and your family. Mold, and it’s counterparts, are not covered on most homeowners policies – at least not in the standard way. If the mold is a direct result of a peril such as a burst pipe, the cleanup is covered. However, if mold has been growing in your walls and floorboards, and you fear it’s effects, you’ll need a specific rider policy to cover it’s eradication and clean up.
- Wildlife, Rodents, and Other Pests: Whether you live in the city or a rural area, you can easily suffer damage to your home from household pests. Wildlife, squirrels, termites and even mice can be destructive little critters. Getting rid of these home-invaders before they do too much damage can be a costly endeavor. And the wreck they leave in their wake can be expensive as well. Insurance companies view these infestations as your responsibility in maintaining your property and offer no provisions for pest damage, though some companies in areas prone to termite infestation will offer a specific termite policy.
- Jewelry, Artwork, and Collectibles: Treasured jewelry, art, antiques, or collectibles require specific coverage. A standard homeowners policy won’t protect your investment beyond a few thousand dollars. In most cases, a separate policy, naming your valuables and their appraisals, is required for such rare and expensive items.
- Power Surges: Should your area experience a power surge that damages your electronics or household appliances, you may not be covered for repairs or replacement. While fire and other catastrophes are reason for replacement or repair, a power surge isn’t. If you own expensive electronics or appliances and fear a power surge could wipe you out, bring your concerns up to your insurer.
If you have any doubts about your coverage, contact your insurer to discuss ways to customize your policy. It’s impossible to prepare for every eventuality in life, but knowing you, your family and your home will be taken care of in the face of many of life’s mishaps can prevent more than a few sleepless nights. Evaluate your homeowners insurance policy today, before it’s too late.
- Pollution liabilities can impact almost any kind of commercial venture, from residential developments to shopping centers, commercial office parks, warehouses, manufacturers, and even organizations such as universities. (Source: ACE Group’s report “Pollution: The Unrecognized Risk of Business Operations.”)
- Because such exposures can be linked to ordinary operations, business managers may expect those liabilities to be covered by general liability insurance policies. Such policies, however, often don’t cover expenses for clean-up, remediation and litigation resulting from pollution. (Source: ACE Group’s report “Pollution: The Unrecognized Risk of Business Operations.”)
- There are a wide variety of exposures that are commonly overlooked. An apartment complex, for example, may have environmental risks from underground heating oil tanks, lawn fertilizers or other chemicals stored on site, such as for swimming pools. (Source: ACE Group’s report “Pollution: The Unrecognized Risk of Business Operations.”)
- The insurance industry typically excludes pollution exposures from general liability, umbrella and excess policies. Instead, the industry chooses to specifically underwrite pollution exposures and now provides a wide range of tailored environmental coverages. (ACE Group’s report “Pollution: The Unrecognized Risk of Business Operations.”)
- The types of pollution insurance coverages include: legal defense fees, clean-up efforts, accidents or oversights during operations, property transfer, and errors and omissions for clean-up companies and environmental consultants, according to Consumer Agents Portal (CAP).
- The cost for a pollution liability policy can differ significantly from one business to the next, reports CAP. Cost factors include: the type of business; the type and the amount of chemicals/hazardous materials used; the disposal method of hazardous waste; the proximity of the business to residential neighborhoods.
The term “inland marine insurance” sounds like a kind of boating insurance or something marine-related. It’s not. It’s misleading, yes, but it’s actually more common than you think.
Inland marine insurance, which is a type of property coverage, has a long history behind it. Its origins are as old as insurance itself.
Here’s a brief historical overview:
Back in the early days of shipping, merchants were heavily dependent on oceans and other bodies of water to transport goods. As a result, goods had to be insured both in the warehouses where they were stored, as well as in transit when shipped inland and on any marine vessel or ocean going freighter.
Inevitably, the scope of inland marine coverage extended to other modes of transportation over time. People no longer just rely on marine transportation and goods are now shipped on planes, automobiles and trains. This is how the term evolved, from an exclusive ocean-going transit coverage to coverage designed to protect valuables moved using all forms of transportation.
But how is inland marine coverage different from property coverage?
While inland marine coverage is a type of property coverage, it’s extremely important to identify one from the other.
- On the one hand, property coverage insures stationary valuables or property that predominantly stays at a single location and is not considered unique.
- By contrast, inland marine coverage insures property that may be moving from place to place and is considered unique enough that no traditional property policies cover it.
This “uniqueness” factor alone explains why inland marine coverage is generally broader than property insurance. These policies cover valuables and collections which may have limited coverage under your homeowners policy and receive more broad coverage when insured on their own.
For example, let’s take a piece of art valued at more than $10,000. Your homeowners policy, with its limited coverage, won’t likely offer full coverage for an item of such unusual value. But this type of valuable can be covered by inland marine policies. There are many other valuable items covered by such insurance, from jewelry to high-tech equipment.
What are the usual types of valuables insured by an inland marine coverage?
There are at least four main types of valuables covered by inland marine policies:
– Valuables or items being transported
– Properties held by bailee
– Instruments of transportation, including those in a fixed location
– Goods that are usually moved from place to place
It also covers other expensive and “unique” property cases such as:
– Fine Arts
– Furriers Block
– Jewelers Block
– Equipment Dealers
– Accounts Receivable
– Computer Coverage
As you can see, inland marine policies provide broad coverage for a wide variety of personal property. What’s more, it even covers items that are not specifically excluded. Think of a missing stone in an insured ring or damage to an expensive painting.
Is purchasing an inland marine policy the best way to cover valuables?
In addition to providing critical coverage for your most prized personal possessions, inland marine policies can offer coverage for business assets that might otherwise not be covered by your commercial insurance policy. Think about goods and valuables usually found in your company vehicle. The policy will not only cover your computer equipment, it will also insure sensitive data. Most traditional property policies exclude coverage for these.
Almost all businesses in any industry can benefit from purchasing an inland marine policy. It can protect a contractor’s equipment, which is typically very expensive. And it can even cover damages or losses to goods at your premises as they are being transported or kept in storage.
Don’t be fooled by the word “marine.” There’s more to this type of insurance than what it sounds like. Make sure your valuables are covered wherever they may be by purchasing an inland marine policy.
A builders risk policy is a specialized type of property insurance designed to cover damage to buildings while they are in the process of being constructed, renovated or remodeled. It typically covers materials, equipment and fixtures in the event that any of these items suffers physical damage or loss during construction operations and may extend to cover materials and equipment during storage and transit to the job site.
Since there is no standard builders risk policy applicable in all situations, each contract is drawn up to outline the specifics of the coverage contained therein. There are two generalized types of coverage available:
- Specified Perils – also called Named Perils, this covers only losses specified in the policy
- Special Perils – most expensive but also most inclusive. This covers all losses except those specifically excluded
What’s Covered and What’s Not
Like any type of insurance, a builders risk policy can be written to cover just about any type of loss as long as a written agreement is executed between the insurer and the insured and the appropriate policy premium amount is paid. Earthquake and flood damage, for example, are almost always excluded in basic policies but, for an additional premium amount, these can normally be added if desired. Besides flood and earthquake damage, other types of losses often excluded from a typical builders risk policy include:
- Defects in design or construction
- Settling, shrinking or cracking
- Intentional damage by the policyholder
- Insect or vermin damage
Losses traditionally covered include damage caused by fire, wind, lightning strikes or explosions. Theft of materials stored onsite may or may not be covered, depending on the policy, and some policies may require you to have a secure storage area. Building collapse is also something that may or may not be covered, depending on the individual policy.
Coverage Add-Ons and Limitations
Liability coverage for protection against bodily injury or damage to the property of other parties is normally not covered under a builders risk policy. The addition of a loss of income clause, however, is not uncommon in certain situations. An example of this would be a hotel that suffers significant damage just before completion and the opening of the business is delayed substantially, causing a major loss in projected business income. This is a type of loss for which a special provision within the policy can provide coverage.
If you have occasion to make a claim under your builders risk policy and the amount paid is less than expected, it’s probably because, by default, claims are typically paid according to Actual Cash Value rather than Actual Replacement Costs. Unless your policy specifies that it will pay Actual Replacement Costs for any loss claimed, the amount paid will be depreciated to the lesser amount. When going over your policy make sure to check this detail.
Who Should Obtain Coverage and Why
Buildings are subject to a variety of risks during construction operations and a quality builders risk insurance policy can minimize the exposure to unexpected setbacks. The policy may be purchased by a custom builder, a general contractor or by the property owner. Coverage is meant to protect throughout the construction phase and to terminate when the building has been completed and is ready for occupancy. The amount of coverage will generally be in line with the total cost of labor and materials involved, with an upside limit of the total valuation of the completed project. As the construction process proceeds, the value of the existing structure in its present condition will be constantly changing, adding to the complications involved in underwriting precise coverage.
Intellectual property is the legal concept that intellectual creations can have exclusive rights in a business sense. Intellectual property law gives small and large business owners exclusive rights over an array of intangible assets, which can range from artistic works to inventions and even corporate phrases.
The role of intellectual property in business is increasingly prominent as economies around the world transition from manufacturing to information-based markets. Both businesses and their insurance providers, therefore, should stay apprised of intellectual property law and intellectual property insurance to mitigate the chance of blunders given the evolving information landscape.
Intellectual Property and IP Insurance
These are actually two distinct issues. Intellectual property is secured when a company seeks infringement protection for their copyright, patent or trademark; intellectual property insurance, on the other hand, follows an intellectual property search and successful registration of a copyright, patent or trademark.
Intellectual property insurance is protection business owners can take out to indemnify themselves against a competitor possibly suing them for infringement of a concept or protected piece of intellectual property.
You may have heard of the drawn-out patent infringement litigation between Apple and Samsung. A ban of certain Apple devices was eventually upheld by an international trade commission, yet the case illustrates the importance of IP insurance in the IT industry, and the general salience of intellectual property rights in all business sectors.
Logistics of IP Insurance
Intellectual property coverage ensures that a company’s copyrights, trademarks and patents are protected from infringement. This kind of insurance coverage finances the defense’s costs and court judgments up to the policy’s upper limits.
There are fundamentally two types of IP insurance coverage:
- The first kind protects your company if you are sued for any kind of infringement, and your defense is covered
- The second type of IP insurance is called a pursuit policy.
In the field of IP insurance coverage, a pursuit policy helps defray the legal costs if you deem it necessary to sue a potential copyright, patent or trademark infringer. It is convenient to think of the first type of intellectual property insurance as defensive and the second type as offensive.
Intellectual property insurance is frequently bundled by insurance providers with Technology Errors and Omissions Liability. That said, intellectual property insurance can be purchased independently, and should be purchased in some capacity if there is any chance of infringement.
America Invents Act and Patent Overhaul
The Leahy-Smith America Invents Act is a piece of federal legislation signed into law in late 2011 by President Obama. The America Invents Act effectively changes the rules of prosecuting intellectual property infringement by changing the protocol from “first to invent” to “first to file.”
This rule change means that businesses need to commit to an intellectual property search and file for patents before thinking about IP coverage. The “first to file” rule means that litigation will favor the company who successfully filed for intellectual property rights rather than the company who supposedly invented the app, service or product first.
In today’s world of burgeoning online commerce and transactions, companies are competing to be the innovators of new products, ideas and apps. Even if you feel you are in the right as a small business owner, failure to secure a copyright, patent or trademark and purchase IP insurance could cripple your long-term financial aspirations.
Legal fees for patents or trademarks can run in the tens of millions and without IP coverage, those costs may ultimately be fronted by unsuspecting business owners modestly looking to defend their products and ideas. Patent insurance and patent infringement liability insurance are good first steps to ensure protection.
Did you know that it may cost less to insure a classic or antique car than a regular vehicle? This is often the case because antique cars are traditionally well-maintained and frequently left in the garage. Conversely, regular cars, which are driven more frequently, are more apt to suffer dings and the general wear-and-tear of the roads. As a result, the price to insure such classic cars as Shelby Mustangs and Camaros from the 1960s can surprisingly run under $500 per year. Despite this, the majority of classic car owners insure their vehicles on standard policies, spending more than they should because of poor information.
Traditional Versus Antique Insurance
Most cars depreciate in value over time whereas classic cars (think antique Jaguar or Mustang) that is well-maintained and not seeing the pavement very often is likely to appreciate over time. Insurance companies that specialize in policies for classic cars will determine the value of your antique vehicle based on a combination of your estimate, the appraised value, and/or the original winning bid. This is important because if your classic car is somehow destroyed, you will be compensated based on the value stated in the policy. If you purchase a standard policy, that value may not cover the true replacement cost of the car.
Factors to Consider When Insuring An Antique or Classic Car
Just determining whether you have a classic car can be tricky, making it important for you to understand how your insurance agency defines “classic” or “antique” cars (note: some carriers define each term differently). If and when you do identify the right agent to handle your classic car insurance policy, make sure to ask whether these factors can help reduce the cost of your coverage:
- Mileage: Often, antique cars are infrequently driven, meaning that from an insurance standpoint, they present less risk.
- Driver’s Age: Many classic car owners are older, experienced drivers; this also reduces risk and annual coverage costs.
- Vehicle Age: Ensuring that your antique is truly a vintage car is also essential before seeking a specialized policy. Find out how old your car needs to be to be considered antique or classic by the insurance agency.
The trick to getting the best rates for your antique is to unbundle your antique car coverage from your standard car insurance policy. This is a straightforward strategy from an insurance standpoint because one car is receiving pampering and limited miles and the other car is understandably being treated like a workhorse.
Every year in the United States, 600,000 new businesses are started. There are many reasons people start their own small business, from a desire to be in control of their own destiny, to the passion to pursue a lifelong dream. Regardless of your reasons for starting a small business, protecting that business investment with insurance is an important part of business ownership. The right insurance will minimize the risks you face due to unexpected events, liabilities, and losses.
Types of Small Business Insurance
The most basic type of insurance that any small business requires is liability insurance. The basic idea behind liability insurance is to protect the policy holder against lawsuits or other legal exigencies. Small-business liability insurance covers things like bodily damage or third-party property damage vis-a-vis your staff, products and services. Liability insurance is the bedrock of small business insurance because it protects your most valued assets.
Workers’ compensation is perhaps the second most important form of insurance to protect you and your small business. This type of insurance focuses on wage replacement and employee medical benefits in the unfortunate circumstance that a small-business employee is injured while on the job.
The important thing to bear in mind is that small-business employees, by signing up for workers’ compensation, waive the right to sue the employer for negligence vis-a-vis an injury sustained on the job. Workers’ compensation effectively indemnifies small business owners against huge payouts and/or protracted court appearances. Most states require workers’ compensation for small businesses hiring W2 workers.
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions coverage, protects small business owners against charges relating to advice given or services rendered by employees. Professional liability insurance can help lower the cost of defending the business against negligence claims in court and/or reduce the monetary damages granted in a civil lawsuit.
Small business owners in the fields of real estate, law, accounting, consulting or myriad other advice-giving professions that hire less than 500 employees should consider professional liability insurance to weather possible negligence claims. This type of insurance coverage goes beyond regular liability insurance.
Business Owner’s Policy
This brand of small business insurance is a commercial insurance package specifically designed for small to medium-sized businesses. Business owner’s policies couple general liability insurance and property insurance into one bundled insurance coverage package. Small business owners can expect a reduced premium when purchasing business owner’s policy insurance coverage.
That said, although business owner’s policy coverage can be economical for your small business, business owner’s policies often have stringent eligibility conditions. The property insurance portion of a business owner’s policy covers things like fires, explosions and vandalism whereas the general liability side covers third-party injury or dismemberment.
Commercial Auto Insurance
Commercial auto insurance helps protect all vehicles owned and/or used by a small business. This kind of insurance is especially handy for small businesses that use staff to transmit goods and services. Work cars, trucks and delivery vans are all indemnified against damage and collision under commercial auto insurance policies.
If your small business employees are driving their own vehicles for professional reasons, you may also want to consider non-owned auto liability to insure the company vis-a-vis an uninsured or underinsured employee.
In some instances, non-owned auto liability can be bundled with a business owner’s policy to reduce the overall cost of coverage for cash-strapped small business owners.
Beyond Basic Coverage
Some small business owners may want to consider disability, life and health insurance. While not directly related to small business operations, purchasing one or all three kinds of external coverage could prove prudent in the long run.