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Liability Exclusions That Could Affect Your Business

Liability Exclusions That Could Affect Your Business

We all know how easy it is to click the “I Agree” button on a website or for a piece of software when it is required. Most of us don’t read the fine print and have no idea what we are agreeing to. Sometimes that can come back and bite us later on. Insurance policies are contracts, just like those terms and conditions. You are usually made aware of the terms and conditions of an insurance contract twice: once when you receive the quote or proposal and then when you receive the policy. Do you read them? If not, you should. What you don’t know can hurt your business. Here are a few sample liability exclusions and endorsements that could come back to haunt you. Designated Premises Endorsement This endorsement, sometimes called Limitation of Coverage to Designated Premises or Project (CG 21 44 sample here), is most often used on liability policies that are project or location-specific. However, the endorsement may show up on liability policies to help curb premium costs. Let’s say you run a restaurant. Most restaurants operate out of a fixed location. So the liability coverage is limited to anything that happens at your restaurant on 123 Main Street. Now your cute little Anytown, USA is going to have a centennial celebration in the town square two miles down the road. You’ve decided to set up a booth there to sell food and drink.  If your policy has a Designated Premises Endorsement, there would be no coverage for bodily injury or property damage incurred by patrons of your restaurant’s booth while they are at the centennial...
The Future of Insurance for Vaping

The Future of Insurance for Vaping

Vaping has increased in popularity over the years due to its attractiveness as an alternative for smokers and an alternative vehicle for cannabis consumption. However, recent events in the news have both consumers and suppliers on edge.  In The News Deaths due to alleged vaping-related illnesses are popping up all over the country. These deaths are being attributed to everything from the flavored oils being used to a chemical used in cheap vape pens. Still others blame black-market cartridges containing THC. These incidents spurred some legislators on state levels and the national level to introduce bills calling for banning of vaping and e-cigarettes in whole or in part. Not Illegal Yet As of now, vaping and e-cigarettes are still legal and may be sold by businesses and used by individuals. That may not change anytime soon. What may change? The age at which consumers may purchase and use these products, how the products are made, and how they may be used.  How Will Your Insurance Be Affected? If you own a cannabis business or smoke shop that deals with vaping pens and/or e-cigarettes, there is no cause for alarm just yet. As long as these products remain legal and your business is selling legal products within the confines of the law, your insurance will not be affected. To be certain your coverage isn’t affected, be sure that you know where all of your stock comes from. Always use reputable vendors, and don’t stock products that might have shady origins. One thing to consider, if you don’t have it already, is products liability insurance. It is important to note that...
Work Comp Exemptions for Marijuana Businesses

Work Comp Exemptions for Marijuana Businesses

As the marijuana business landscape continues to change in California, so do the insurance rules. In many cases, what you don’t know could actually save you money. Nonprofit vs. For Profit With the implementation of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) in January 2018, adult-use cannabis businesses now have a choice. These businesses may now be organized as non-profit or for-profit. There are advantages and disadvantages to both types of business formats. If you are still deciding which is right or your business, a great article on the pros and cons of each can be found here. Whether you are just starting out or thinking about converting your business from non-profit to for-profit status, you should know that status affects your workers’ compensation insurance. What Does Work Comp Have To Do With It? As you are aware, workers’ compensation insurance is based on the number of employees and their payroll. The more employees you have, the higher your payroll and the higher your insurance premium will be. Non-profit businesses must report all payroll, even for owners and officers. This is an added expense when for-profit businesses can exclude owners and officers from coverage. There are caps for payroll for the following: Executive Officers, Partners, Individual Employers and Members of a Limited Liability Company. The minimum reported payroll for included officers is $52,900 and the maximum is $133,900. However, even those amounts can have a significant impact on the Workers Compensation premium. Have You Made the Change? If your cannabis business has converted from non-profit status to for-profit status, you should be aware that the status...
When NOT to Buy Insurance

When NOT to Buy Insurance

There are many good reasons to purchase insurance. Hayes Brokers can tell you every single one of them. But when should you NOT buy insurance? When (After) You Have A Claim Many businesses try to control costs by not purchasing certain types of insurance when they are suggested or offered by a broker. The most common types of insurance that are declined are: comprehensive and collision coverage for vehicles, directors & officers liability insurance, property insurance, flood insurance, and cyber liability. Unfortunately, insurance cannot be purchased after-the-fact to cover a claim. If a tree falls on your car and you call your insurance agent to add comprehensive coverage that day, you’ll get comprehensive coverage, but it will exclude prior damage. The next time a tree falls, you’ll have coverage. This time, no coverage. In the case of coverage like Directors & Officers Liability insurance, a claim for damages may not come to light for months, or even years. D&O cannot be backdated to cover prior claims. The best time to purchase coverage is before a claim happens Since you don’t know when a claim might occur, the time to purchase coverage is now. When It Isn’t Yours You can purchase insurance on anything or anyone at just about any time. However, the insurance policy will not pay you unless you have an insurable interest in the person or object. For instance, you can purchase insurance on your next-door neighbor’s house. However, if his house burns down, you won’t receive a check, since you have no insurable interest in the home. What is insurable interest? It is a concept that...
Insuring Firearms in Your Home

Insuring Firearms in Your Home

If you are one of the millions of homeowners who own a firearm (or several), you have special insurance concerns. While in the majority of cases it is illegal to own and store firearms in your home, how should they be insured? Property Coverage On a standard homeowners’ special form policy (HO3 or equivalent) firearms are discussed under Section I – Property Coverages. There under “3. Special Limits of Liability” is this notation: Firearms will be covered under the property portion of the policy, but only up to $2,500 and only for the peril of theft. It is important to note that this is a sub-limit and does not increase your policy limits. So if you have $100,000 in contents coverage, the $2,500 firearms limit will be included in that amount, not in addition to it. Should your firearms collection (including related equipment) be worth more than $2,500, you will need to discuss higher limits of coverage with your broker that would be in addition to your policy limit. This endorsement may also extend coverage to firearms for perils other than just theft. Liability Coverage The issue of liability insurance coverage for firearms is a bit more tricky. While the policy itself usually doesn’t specifically include firearms, it doesn’t exclude them, either. However, specific policy language does include or exclude coverage based on the circumstances. Here is what the policy says about Personal Liability: Based on this wording, if a shooting occurs in your home or on your property it would be covered, right? Well, it depends on the circumstances. The first thing to note is who is an...
Case Study: Dental Office Ransomware

Case Study: Dental Office Ransomware

We’ve discussed in previous blog posts about how ransomware has affected cities across the United States. Today, we want to show how ransomware can affect your business and those around you. Recently hundreds of dentist offices around the country were struck by a ransomware issue. Dentists across the country were unable to access patient records, scheduling, x-rays, and client payment accounts due to ransomware that had not been downloaded by their individual offices. Here’s What Happened On August 29, 2019, CNN and other news outlets reported that dental offices around the country were unable to function due to ransomware attacks. The ransomware was not isolated to each individual office. It was actually coming from a centralized location. These offices utilized the services of third-party providers for their payment systems, scheduling, and storage of patient records. Two companies providing these services had been hit with ransomware attacks, disabling not only their systems but the offices for which they provided services. Here’s What Happened Next Over 400 dental offices around the country were affected. Those offices were unable to access records, unable to treat patients and unable to accept payments for several days after the attack while the third-party companies worked to restore access to client records for these offices. The individual dental offices were financially affected because they were unable to service clients on those dates. There was also confusion due to their inability to access scheduling records. Cyber Liability Insurance To The Rescue The third-party vendors reported that around 100 clients (and possibly more at press time of this blog) had systems restored due to their efforts. It is...