Monthly Archives: September 2014

Do Private Companies Need Management Liability ?

lawsuit formAs an avid reader of the daily newspaper, not a day goes by that we don’t read about a suit being lodged against a public company, its directors and officers for some sort of malfeasance. While it is true that public companies are traded on national security exchanges and therefore they are in the spotlight and make easy targets. Thus, it stands to reason that they are seen as being worthy targets due to the assumption that they have “deep pockets” and can pay out inexhaustible sums of money when someone sues them.

The fact is that smaller, privately held companies often are at risk for the very same allegations as the ‘big boys’ and they don’t have the time, the resources or the finances needed to fight off such actions. A big corporation may have house counsel or lawyers kept on retainer specifically to defend such suits, but smaller companies can be wiped out by defense costs, alone, whether or not they win or lose!

A company, also known as an ‘entity,’ it’s directors, officers, shareholders, and employees, independent contractors, and in the case of some even its volunteers, are all at risk.
The fact is that a General Liability policy will not do the job if your company is the recipient of any of the following legal actions:

• Competitors alleging restraint of trade;
• Employees alleging misconduct;
• CEO’s accused of discrediting a competitor;
• Theft of trade secrets;
• Suits brought on behalf of shareholders;
• Allegations of misallocation of funds;
• Harassment;
• Discrimination;
• Negligent hiring;
• Deceptive business practices;
• Employment practices;
• Regulatory claims;
• Fiduciary claims;
• Negligent supervision

This list is just representative of the types of actions that can result and the average cost of defending such claims can run into hundreds of thousands of dollars even when adjudicated through arbitration.

More and more private companies are asking more and more questions about how to protect themselves especially in recent years since the economic downturn of 2008. Be sure to empower yourself and always ask questions regarding the risk to you, your company and the members of your organization. Asking questions doesn’t obligate you to purchase insurance. It just makes you better informed and able to weigh whether or not this protection is right for you! We strongly suggest that you begin to ask questions without delay.

By Karen Skoler, CPCU

How Much Do Moving Violations Actually Cost You?

movingAs a driver, I’m sure you know that getting tickets can be an expensive proposition. The cost of the ticket, plus any applicable surcharge or court appearances, is just the beginning. Just what will tickets do to your car insurance premiums?

In recent years, credit scores showing how much debt you carry and how responsible you are in paying your bills, have become a factor in determining the cost of your insurance premiums. At present, more and more insurance carriers are now looking at the correlations between your driving record and the type of risk you present to determine the cost of your insurance coverage.

For instance, a violation for driving while impaired can cost you big time. Some studies show a probable increase of over 90% in your actual premiums and, in some states, the violation stays on your record for ten years.

Reckless or careless driving is another area that can have a huge effect on insurance premiums with possible increases of over 80%. Also tickets for failure to stop, failure to yield and not providing pedestrians with the right of way or failure to stop for a school bus are other serious tickets for which companies surcharge greatly.

Then, of course, there are always the penalties for speeding tickets. Increases range from 20% to 30% depending upon how many miles over the posted speed limit you are driving and whether or not you have been given this type of a ticket on a prior occasion. Not only are you jeopardizing your arrival at your destination, but rather the arrival of everyone else on the road as well. In addition, it is sure to be a mighty expensive trip for you!

Also, keep in mind, that texting or talking on your cell phone while driving are also considered moving violations. At this point most carriers consider these actions to be serious and result in major premium increases as well.

So the next time you get in your car, stay present and aware and follow ALL the rules of the road. It not only is safer – it will also keep your insurance premiums more affordable.

Karen Skoler, CPCU