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Preparing for a Fire Threat: Insurance

Preparing for a Fire Threat: Insurance

We’ve all seen the incredible and horrifying pictures of the devastation from the Camp and Woolsey fires in California over the recent weeks. Whole towns demolished. Property damage estimates are expected to exceed $19 billion for homes and businesses. The amount of uninsured or underinsured losses has not yet been calculated, but it is sure to be some portion of that amount. How could those home and business owners have better protected themselves with insurance? How could you better protect your home and business? First Things First If there is a fire bearing down on your area at this time, you cannot purchase new coverage or  make changes to any of your property or auto insurance policies. Insurance companies will put moratoriums on binding new policies or making changes to existing policies in the face of imminent threat of property damage. Call your broker after the threat has passed to discuss purchasing new coverage or making changes to existing coverage. Properly Insuring Your Property How much is your property worth? It’s an interesting question that has more than one answer. There is, of course, sentimental value. Unfortunately, that cannot be insured. Then there is market value, which fluctuates over time. Your expensive home or business can increase in value in times of economic upturn, but can decrease in times of peril, such as an oncoming fire. While this is a good starting point for insuring a home it does not accurately reflect how much coverage you may need in the event of a covered cause of loss. Replacement cost value is what property insurance policies are based on. Depending...
We Give Thanks

We Give Thanks

At this time of celebration, we give thanks for all of the blessings of the past year. Thank you for trusting us to protect your business and your family. Happy Thanksgiving from Hayes Brokers.
California Employee/Worker Bonds for LLCs

California Employee/Worker Bonds for LLCs

As part of our ongoing series on insurance coverage for Limited Liability Companies (LLCs), we wanted to tackle the topic of contractor LLCs. Many states do not allow contractors to operate as LLCs due to the ease of terminating the corporate structure. However, California has recently begun allowing contractors to form LLCs, but are requiring additional safeguards for these businesses. The first was increasing the contractor licensing bond amount from $12,500 to $15,000 in 2016. The second was the requirement of an additional bond for contractor LLCs. This bond is the called the Employee/Worker Bond. What Is The Employee/Worker Bond? The California Contractor State Licensing Board (CSLB) now requires the Employee/Worker Bond for all contractor LLCs in order to remain in good standing with the state. The minimum bond amount is $100,000, though higher amounts may be required. This bond is required by LLCs to protect employees and workers of those companies against payroll fraud: underpaying employees and workers or not paying them at all. How prevalent is this problem? Between 2013-2015 a group of companies working on the Pacific Amphitheater in Costa Mesa failed to pay prevailing wages (or to pay workers at all) to the tune of $200,000. A construction company in Paramount is accused of shorting workers payroll or not paying them at all, in addition to other allegations involving workers compensation. These are just two examples in a sea of thousands, with more stories coming out every week. Why Is This Bond Required? For LLCs the ability to cut-and-run becomes easier: they can just shut down the LLC and start a new one if things...
Liquor Liability and Your Business

Liquor Liability and Your Business

It is common knowledge that if your business is in the business of providing alcoholic beverages, then you must have a liquor license and purchase liquor liability insurance from your broker. This would be relevant to bars, restaurants, sports facilities and other businesses where liquor is “on the menu”. But what if your business doesn’t typically provide liquor and wants to host an event where liquor is served? Should you allow alcohol at the company picnic? For most businesses, there may be coverage. Let’s examine. Liquor Liability Exclusion The Commercial General Liability Coverage Form (CG 00 01) enumerates a long list of exclusions, including liquor liability. This is how the coverage form reads:               The exclusion says that bodily injury or property damage for which the insured (policyholder) is liable is excluded as it relates to liquor, especially if the business may be held liable for causing intoxication, furnishing alcohol to underage persons or someone who is already intoxicated, or violates any laws with regard to the sale, gift, or distribution of alcoholic beverages. This seems pretty clear. There is no coverage for liquor liability under the policy. But is it completely excluded? Host Liquor Liability You may have heard this term before “host liquor liability”. Does it exist, or is it some mythical creature dreamed up by someone under the influence? It does exist, sort of, but you usually won’t see the words “host liquor liability” on your policy. In fact, the whole premise of host liquor liability is based on the “give back” in the exclusion above. Here is how that looks:...
A Closer Look At Insurance for LLCs

A Closer Look At Insurance for LLCs

As we have previously discussed, LLCs are a great way to protect company assets, but this corporate structure is not a replacement for actual insurance coverage. Insurance for LLCs should still be a consideration. Let’s take a closer look at why. You Can Still Be Sued In an article on Legal Zoom about LLCs, it is noted that forming an LLC makes a company a separate entity from the company owners. In the eyes of the law, the company “can own money and property, have a bank account, make agreements, sue people, and be sued.” While the corporate structure may protect individual owners from legal liability for company activities, it does not protect the company from being sued. Lawsuits cost money. The best prepaid legal option a company can have is a solid commercial general liability policy to protect against both nuisance claims and legitimate lawsuits. There’s an insurance policy for that: General Liability. You Can Still Make Mistakes Many professional businesses such as lawyers and doctors cannot form LLCs in certain states. If your business is formed as an LLC the corporate structure does not protect you or the business from decisions made by professionals within your company that result in damage or loss to your customers. There’s an insurance policy for that: Professional Liability / Errors & Omissions You Can Still Suffer A Property Loss The physical assets of your business such as your equipment, furnishings, and buildings are still vulnerable to damage or loss. Fire, theft, hurricanes, earthquakes, floods and other natural disasters won’t stop at your front door due to your corporate structure. There are...