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Advanced Planning for Hurricanes and Other Disasters

Hurricanes Harvey and Irma caused widespread damage and forced businesses to close their doors and focus on the immediate safety of their employees and customers. Unfortunately, once a hurricane, flood or other disaster passes, a business isn’t necessarily out of danger. Recovering from a disaster can be extremely expensive, and many workplaces don’t have a plan in place to implement important safety and continuity policies.

Even if your business wasn’t affected by the recent hurricanes, any type of disaster can lead to devastating damage and prolonged business interruptions. Taking the time to plan ahead for a worst-case scenario can help give your business the time it needs to protect your employees, property and finances. Here are some steps you can take to prepare your business for a disaster:

• Learn the types of disaster that are most likely to affect your area.
• Inspect your insurance policies to see if there are any gaps in your coverage. For example, some policies may only provide coverage if a business suffers physical damage.

Call us at (916) 380-5300 for resources and toolkits that can help you create a business continuity plan. We can help you establish a plan that takes a number of important topics into consideration, including safety, health, communication, property protection, recovery and employee training.

Filed under: Personal Insurance,Property & Casualty — Jillian Bender-Cormier @ 9:00 pm October 25, 2017


Serving on a Non-profit Board can be Risky Business: Non-profit directors and officers (D&O) liability

It’s common for affluent individuals to take on board positions for non-profit organizations as a way of offering their leadership skills and connections to serve their local communities. These organizations and their directors and officers can be exposed to lawsuits for mismanagement of funds, negligent acts, errors and omissions, breach of duty, misleading statements, or wrongful employment acts such as discrimination, retaliation, failure to employ or promote, or wrongful demotion.

According to the 2014 U.S. Trust Study of High Net Worth Philanthropy, nearly half of all survey participants served on a non-profit board. According to a Towers Watson 2013 D&O survey, 63% of its non-profit respondents had been subject to a D&O claim in the past 10 years. The Nonprofit Risk Management Center reports that 85% of all non-profit insurance claims filed under D&O liability policies are employment related. Even if allegations against you are groundless, you will incur costs to hire an attorney, which can add up very quickly when defending a claim. Adding the non-profit director and officer endorsement to your Nationwide Private Client personal excess liability policy will allow you to focus more time on helping the non-profit and less time worrying about a claim.

How you may be at risk

You sit on a non-profit board and cause an actual or alleged negligent act, error or omission, misleading statement, or breach of duty resulting in a lawsuit against you.
A wrongful act could come from:
• Acts such as employment-related discrimination, slander or defamation, wrongful failure to employ or promote, or wrongful demotion
• Conflict of interest, breach of contract, or fraudulent financial statements
• Mismanagement of funds such as assets being sold for unreasonably low prices or wasting assets
• Errors in judgment such as dissemination of false information, misleading statements or improper guarantees
• Negligence such as breach of duty, failure to review documents before signing, or failure to detect or
stop embezzlement

Claims could be filed against you by parties outside of the organization including donors or beneficiaries, organization members or employees, other directors or officers of the organization, or government officials.

How Nationwide Private Client responds

If you serve as a director or officer of a qualifying not for profit organization, Nationwide Private Client offers our optional non-profit director and officer coverage, with limits up to $1 million, that can be added to your personal excess liability policy. This coverage includes costs for defense up to the limit.

If you have questions or are interested in this coverage, contact us at 916-380-5300.

Filed under: Personal Insurance — Jillian Bender-Cormier @ 7:03 pm


The CA Fire Situation – a note from our VP of Personal Risk Management

Update by Denise Metz, CISR, CPSR, CPRM

California has certainly seen its share of wildfires this month. While the smoke in our area is clearing, there are still several fires raging on. Below is information I obtained from http://calfire.ca.gov/communications/communications_StatewideFireSummary. As you will see most of the fires have some containment.

We have been fortunate as, out of the many Warren G. Bender Co. clients we have in the area, we have just one home that has been a total loss. This client is insured through Nationwide Private Client who is a premier carrier with robust coverages. I foresee one of the biggest challenges will be with the loss of use coverage. This coverage, simply put, will pay for our client to obtain housing until their home is habitable again. With Nationwide Private Client the coverage for this is on an actual loss sustained with no time limit basis. With other carriers this coverage can range from as low as 20% of the dwelling limit to a 12 month time frame (most commonly seen). Given the devastation of these fires, one can reasonably conclude there will be a shortage of materials and labor which is sure to cause significant delays when it comes to the rebuilding of these homes. I’m certain we will hear many stories about how long it is taking to rebuild and how people don’t have enough loss of use coverage especially, as the rental housing becomes saturated and the cost to rent inflates.

It is a devastating situation but as insurance professionals it causes us to look at ourselves and either say good job or we could have done more. I find comfort in knowing we at Warren G. Bender Co. can say “good job”.

Stats as of 10/17/17

CENTRAL LNU COMPLEX (3 fires)

• In unified command with Santa Rosa Fire Department & Sonoma County Sheriff
• CAL FIRE Incident Management Team assigned
• 23 civilian fatalities & 1 private water tender operator

Tubbs Fire, Sonoma and Napa Counties (more info…)
Between Calistoga and Santa Rosa
• 36,432 acres, 91% contained
• Significant number of structures destroyed

Pocket Fire, Sonoma County (more info…)
North of Geyserville
• 12,430 acres, 63% contained

Nuns Fire, Sonoma County (more info…)
East of Hwy 12 from east Santa Rosa to east of Sonoma
• 54,423 acres, 80% contained
• The Oakmont Fire burned into the Nuns Fire overnight.

SOUTHERN LNU COMPLEX (1 fire)
• CAL FIRE Incident Management Team assigned

Atlas Fire, Napa & Solano Counties (more info…)
South of Lake Berryessa and northeast of Napa
• 51,064 acres, 83% contained
• 6 civilian fatalities
• Significant structures destroyed

MENDOCINO-LAKE COMPLEX (2 fires)
• CAL FIRE Incident Management Team assigned

Redwood Valley, Mendocino County (more info…)
North of Hwy 20 in Potter Valley and Redwood Valley
• 35,800 acres, 75% contained
• 8 civilian fatalities
• Significant structures destroyed

Sulphur Fire, Lake County (more info…)
Clearlake Oaks
• 2,207 acres, 92% contained

WIND COMPLEX (3 fires)
• CAL FIRE Incident Management Team assigned


Cascade Fire, Yuba County (more info…)

Loma Rica area
• 9,989 acres, 98% contained
• 4 civilian fatalities
• Significant structure destroyed

Lobo Fire, Nevada County (more info…)

Rough and Ready area
• 821 acres, 99% contained
• Multiple structures destroyed

LaPorte Fire, Butte County (more info…)
Bangor area
• 6,151 acres, 98% contained

OTHER FIRES

Fallon Fire, Alameda County NEW
Fallon Road, 3 miles east of Dublin
• 116 acres, 70% contained

**Unified Command Incidents**

Bear Fire, Santa Cruz County (more info…) NEW
Bear Creek Canyon Road, northeast of Boulder Creek
• 271 acres, 10% contained

**Federal Incidents**

Wilson Fire, Los Angeles County (more info…) NEW
Mount Wilson, Mount Wilson Observatory
• 30 acres, 25% contained

Buffalo Fire, San Diego County (more info…) NEW
Camp Pendleton
• 1,088 acres, 50% contained

Filed under: Personal Insurance,Recent Headlines — Jillian Bender-Cormier @ 11:48 pm October 18, 2017


The Risks of Airbnb and Home Sharing

Just a few years ago, taking a trip involved contacting travel agencies, booking hotel rooms and making plans far in advance. Today, however, smartphones and the internet have helped create new sharing services that allow homeowners to connect with travelers and rent out their homes, spare bedrooms or other accommodations for a fee.

Airbnb, the most popular of these sharing services, offers a convenient platform that can provide homeowners with an extra source of income. However, renting through Airbnb can also expose you to substantial risks and leave you with costly property damage and liability claims.

Potential Insurance Gaps
Relying strictly on your regular homeowners or renters insurance policy while hosting guests through Airbnb can lead to significant gaps in coverage. These policies are designed to protect you and your family from everyday risks, and not from commercial renting.

If a renter uses your home for even a small amount of time, you and your family will be exposed to significantly different risks that weren’t considered when your policy was drafted. As a result, most homeowners and renters policies won’t cover property damage that’s caused by Airbnb guests.

If you’re considering renting through Airbnb, your first step should be to contact your insurance broker to review your current homeowners or renters insurance policy. While your homeowners or renters policy may allow you to rent your property to a guest, it’s important to keep in mind that each insurer has its own restrictions and requirements. Some insurers may require advanced notice of any short-term rental, whereas others might insist that you purchase an endorsement to expand your coverage.

If you plan to rent out your residence on a regular basis, many insurance companies will consider this commercial use. In many cases, regular Airbnb hosts will need to obtain a commercial insurance policy in order to be properly insured. However, a growing number of insurance companies now offer home-sharing liability insurance policies that can be purchased on a month-to-month basis.

Issues with Airbnb’s Provided Protection
Airbnb does offer its hosts two forms of protection through its host guarantee program and host protection insurance. While hosts may be inclined to rely exclusively on these programs to manage their risks, there are significant gaps related to these offerings.

Host Guarantee
Airbnb backs every one of its bookings with its host guarantee program at no cost, which will reimburse eligible hosts for damages up to $1 million. However, Airbnb readily admits that its host guarantee is not insurance and should not be considered a replacement or stand-in for homeowners or renters policies.

Moreover, payments through the host guarantee are subject to a lengthy list of terms, conditions and exclusions. Therefore, hosts should be aware of the following issues related to Airbnb’s host guarantee:

• Hosts must attempt to resolve any issues with the guests involved prior to receiving any compensation. This also means that a host would have to make a claim on his or her own insurance policy before the host guarantee would apply.
• Any sum collected from a standard policy or a security deposit would be deducted from the host guarantee.
• The guarantee will only repair or replace covered property that is damaged during the time frame of an online booking.
• This guarantee does not cover certain items including, but not limited to, cash, collectibles, jewelry, pets, watercrafts or any damage to property that is not considered a covered accommodation.

For more information on specific elements of Airbnb’s host guarantee program, hosts can review its terms and conditions in full on the company’s website.

Host Protection Insurance
In addition to its host guarantee program, Airbnb offers coverage to its patrons through its host protection insurance. Airbnb indicates that the program provides primary liability coverage for up to $1 million per occurrence in the event of third-party claims of bodily injury or property damage. Despite these claims, hosts should be wary of relying solely on this insurance program for a number of reasons:

• Intentional acts that aren’t the result of an accident are not covered under this policy. In addition, Airbnb’s home protection insurance does not cover what it refers to as property issues, which can include things like mold, asbestos and bedbugs.
• Neither Airbnb’s home protection insurance nor its fine print is readily available for review. The policy is also subject to limitations, conditions and exclusions. Together, this means that the specifics of these coverages are vague, and Airbnb hosts may not know exactly what’s protected.
• The personal property of any guest is generally not covered. Additionally, any theft or damage caused by a guest may not be covered either.

With Airbnb’s host protection insurance, it’s best to assume that you aren’t equipped with the proper coverage. For full protection, it is likely that you will need to speak with an insurance professional to better understand the policy adjustments you will need in order to be fully covered.

Considerations for Condo Owners and Renters
While Airbnb opens its services to condo owners and renters, multi-unit buildings often have restrictive bylaws, homeowner association rules or lease terms that could impact the ability to host guests through Airbnb.

In many instances, commercial activities like renting out accommodations—even for short periods of time—are forbidden by lease or condo board policies. In some cases, hosts will need to contact their landlord or condo board before subletting or renting out any accommodations. Failure to do this can result in eviction or other forms of legal action.

Even if you’re allowed to rent out your condo or apartment through Airbnb, doing so can cause tension with neighbors. There’s always the potential that your guests may not be respectful to property in common areas, act inappropriately or noisily, or make other tenants feel uncomfortable.

Local Laws and Considerations
In response to the rising popularity of Airbnb, many states, cities and towns are moving to regulate short-term property rentals through their municipal codes or zoning regulations. In some cases, home rental services like Airbnb could be prohibited altogether.

If you break these local regulations, purposely or otherwise, you could face thousands of dollars in fines. What’s more, Airbnb says alignment with laws and regulations is the responsibility of those renting out accommodations. As a result, you need to review your local laws and regulations before using Airbnb to rent out your accommodations.

The Bottom Line
While Airbnb offers a unique and potentially profitable service to users, it’s not without its faults. Before you decide to try it for yourself, be sure to consider all of the risks. For more information on sharing services, or to review your homeowners or renters policy, contact us at (916) 380-5300 today.

Filed under: Personal Insurance — Jillian Bender-Cormier @ 5:18 pm September 20, 2017


NHTSA Announces Additional Air Bag Recalls

The National Highway Traffic Safety Administration (NHTSA) has announced that the results of new safety tests have prompted the recall of an additional 2.7 million vehicles in relation to defects in air bag inflators manufactured by Takata Corporation. The agency said that the most recent recall applies to driver-side air bags built from 2005-2012 that are included in certain vehicle models manufactured by the Nissan, Mazda and Ford motor companies.

Defects in air bag inflators manufactured by Takata have been linked to 17 deaths and over 180 injuries worldwide, and the total number of recalled vehicles as a result of these issues is now over 100 million. Takata recently pleaded guilty to a felony charge as part of a $1 billion agreement with the Justice Department that also includes financial compensation for automakers and victims of the malfunctions. The company also filed for bankruptcy as a result of the ongoing recalls, but stated that it was prepared to continue shipping replacement parts for affected vehicles.

To learn more about recalls related to Takata’s air bag inflators, visit the NHTSA’s website.

Filed under: Personal Insurance,Safety — Jillian Bender-Cormier @ 5:56 pm August 16, 2017