Monthly Archives: December 2013

Petschauer Insurance 2014 Insurance Resolutions

Colourful 2014 in fiery sparklersThis is the time of year when many are thinking about what changes they are going to make to improve their lives in the coming New Year. Lose weight, be more patient, exercise more, etc. Well, those are all well and good, but the Petschauer Team came up with some of their own INSURANCE-related resolutions we would like to share with you:

1. Take down your Christmas lights inside or outside of your home to ensure safety from dangerous power surges that can lead to a fire.

2. Keep items in your car such as a snow brush and blanket to keep you safe during inclement weather.

3. Take a Defensive Driving class to reduce your auto premiums.

4. Resolve to clean out the lint in your dryer on a monthly basis as this can easily cause a fire.

5. Review your insurance with your broker – this is a time of year where many of you receive engagement gifts and will be planning weddings in 2014. Some many also receive wonderful valuable gifts such as jewelry, fine arts or furs that you will need to add to your Homeowners or Floater Policy

6. Subscribe to our blog to get up-to-date insurance information and suggestions to keep the assets and property you worked so hard for properly insured .

However, you can still also lose weight, be more patient, and exercise more too. Whatever you pick as your final New Year Resolution, Happy New Year from the entire Petschauer Insurance Team!

Did you ever wonder why your Insurance Policy is Audited?

audit-stampSeveral years ago a client of mine complained to me that his cousin, who also had a business insurance policy, never had any audits while my client got audited every year! My client wanted to know, why the difference? Believe it or not, there are logical reasons for this as explained below.

Not all insurance policies are rated or, have their premiums based on the same criteria. Insurance policies such as Workers’ Compensation are based on future estimated payroll while policies such as General Liability are based on future estimated payroll, or sales, depending on the type of business being insured. Yet, other policies calculate premiums based on the square footage owned or occupied by the insured. Such calculations don’t involve any estimating at all. At the end of the policy period, the insured/customer whose policy is based on estimated sales or payroll is required to provide the “actual payrolls and/or sales figures” so that the carrier can adjust their policies accordingly. Adjustments are made via audit and they are a contractual obligation of the policyholder. However, the insured whose policy is based on actual square footage, owned or occupied, has no reason to be audited because square footage doesn’t change.

Regardless of whether the premium bases are payroll or sales, at the time a policy is issued, the insured/customer can only “estimate” anticipated payrolls and or sales. Such estimates can be in the form of educated guesses such as in the case of a new venture, or approximations based on prior payroll or sales information for the year immediately preceding. A job description and an estimated annual salary for each employee are both needed for Workers’ Compensation and General Liability policies based on payroll. An anticipated sales figure is needed in the case of General Liability policies. For a new venture, a guess in terms of the number of employees that will be needed, their job descriptions and their total annual salaries, together with anticipated sales, are all required if both Workers’ Compensation and General Liability policies are to be written. In the case of an existing business, payroll and or sales information can be gleaned from expiring policies, but may need to be adjusted based on changes in the business which have recently taken place.

At the end of the policy period, the insured is asked to report the actual payrolls and/or sales developed during the policy period to see how they match up with the estimates used at inception. If the insured has had more payroll or higher sales than anticipated, they may have to pay an additional premium. If payrolls and/or sales were overstated the carrier might have to return money to the insured.

Regardless of the actual method used to procure the payrolls and or sales, the important point to remember is that auditable policies are subject to review at expiration. Often a carrier may send the insured a form on which to report their payrolls or sales. This is often termed a self-audit where the insured goes through his/her books for the actual payrolls and sales recorded during the year and returns the form back to the company. Sometimes carriers send out auditors to review an insured’s books. An appointment is made and the auditor usually visits with the insured at their place of business or with the insured’s accountant. Sometimes, carriers will simply estimate the information. If you receive an audit from your insurance carrier, you should always check the figures used by the insurer. When you receive an “estimated” audit it is also best to check the figures since the carrier’s estimates may unfairly penalize you into paying additional monies that don’t adequately reflect your actual information. Even if you are eligible for a return premium from the carrier, you should always check an estimated audit. Very often an insured can do much better than anticipated during a policy period and, as a consequence, they are hit with a very high additional premium at audit. That is why we strongly recommend that if there are any significant changes to your business during the year, make sure to contact your agent and make him or her aware of what is going on. You will be glad you did when your policy comes up for audit.

By Karen Skoler, CPCU and Ray Alvarez, AAI

5 Tips for an Insurance Check-Up

InsuranceCheckup1. Request a Schedule of Insurance. This will provide you with a snap shot of your current coverage.

2. Schedule a phone call with your Insurance Agent to review your account. This is a good time to check property values or increase coverage limits. Ask questions, your representative should be able to inform you as to how your policy protects your interests.

3. Discuss any changes in your business operations with your broker. For example: your small business may be expanding and you have now hired an employee. You are required by law to provide Workers’ Compensation and Short Term Disability insurance. Without having such insurance in place you may face steep penalties in excess of $2,000 each 10 day period you are uninsured.

4. Prepare to budget for rate increases. Just like most other expenses, insurance rates continue to rise.

5. Combining coverages for example: insuring your home and auto with the same carrier, you may be eligible for a multi-line discount.

– Lavette Wright

Does A Consultant Need Insurance?

?????????????>Dear Sherri,I am a consultant that visits my clients at their offices. Do I need insurance to protect myself in case I am sued?

Guru in Yonkers

Dear Guru in Yonkers,Definitely! We gurus have to stick together and your question is proof of your guru-like wisdom. What you need is a Professional Liability policy also called an E&O policy. Such a policy provides defense and liability coverage for claims that allege negligence in the performance of your professional services. This is excluded from all General liability policies. Professionals include doctors, lawyers, engineers, consultants, insurance agents and many others. If you are not sure whether your profession needs such a policy, contact your agent immediately.

Sincerely,
Sherri

Does My Homeowner’s Insurance Cover a Stolen Cell Phone

stolen-cell-phoneDear Sherri, My son’s cell phone was stolen while he was at the park, does my Homeowner’s policy cover this? – Very Angry Mom in Queens

Dear Very Angry Mom in Queens,
I have good news and I have bad news. The good news is yes your policy does cover this since the phone is part of your contents coverage and if you have “off premises theft” coverage on your policy, the phone is covered. Now, I wish I could just stop here, but I have to also give you the bad news. The deductible on your Homeowner’s policy will apply and most people have a deductible from $250 to $2,500. Considering the fact that most people’s phone will cost less than $600, I would not put in a claim for this type of loss. Instead, I would just buy a new cell phone and take it out of your son’s allowance for the next few years and chain or superglue the new phone to his wrist! For more detailed information on covering electronics, see our guest blog on Equifax Financial
– Sherri