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Category: Insurance Tips

Restaurants, Alcohol Sales Percentage, and Liquor Liability

Posted on by Ownby Insurance Service

Restaurants and bars have specific, and sometimes unique, risks to cover. One of those risks centers around alcohol sales and consumption on their premises. And while it may seem obvious, how much they sell is key. But how much is too much? The corresponding coverage for this risk is called Liquor Liability Insurance, and there are a few ways it is underwritten by most carriers.

Many insurance companies measure alcohol sales risk by comparing it to the amount of food sold by the venue. If the percentage of alcohol sales is high, the classification of a restaurant may be changed to a “bar” instead. If that “bar” also has a stage, live music, a dance floor, etc., it may be considered a nightclub. Both bars and nightclubs have higher risk potential when considered by underwriters.

In addition, different states have very laws around liquor sales. Often called “Dram Shop Laws,” these regulations take into account the potential of alcohol contributing to liability claims. This might include actions that a patron took after being served alcohol by the establishment. In very strict states like Alabama, this is more prevalent, while in a state like Nevada, there may be less liability.

As mentioned earlier, the type of venue is a key piece of liquor liability coverage. A restaurant may have less risk in an underwriter’s eyes, while a nightclub or tavern might have a higher level of concern for them. And again, the key to that determination may center around alcohol sales as well as the characteristics of the venue.

So, what does liquor liability actually cover for these establishments? In most cases, these policies will help cover damages caused by a patron that has been served alcohol by the venue. These damages may be related to bodily injury or property damage. One of the best ways for a venue to protect themselves is to have proper risk management in place for the sales and service of alcohol, and to have the right liquor liability coverage in place in case an incident does occur.
What is the right policy for your restaurant? We can help you determine that! Contact Brandon Patterson from our team at 865.453.1414 or  brandon@ownbyinsurance.com.

Do Life Changes Impact Your Needs for Life Insurance?

Posted on by Ownby Insurance Service

A new year can often bring in changes in life. New jobs, new family additions, new businesses, personal changes – there are many things that can impact your planning for a new year. And although it may not be at the top of your list, how do these changes impact what – or whom – you need to protect? When it comes to life insurance, there may very well be some changes you need to make. Let’s take a look at some of these impacts and how you might want to approach your coverage.

Your Policy’s Value
If you have big personal changes like jobs, a new home, children, etc., you have new financial commitments. These commitments could be a huge burden if one of the family’s income providers passes away. Just think of a widowed spouse trying to handle a mortgage, childcare, and day-to-day living expenses without the other’s income. Understanding the amount of coverage your family would need – and for how long – is a critical component.

Your Policy’s Term
As you probably know, Term Life Insurance is active for a specific period of time, while Whole Life is typically meant for an individual’s entire life. As you get older, have children, retire, or go through other life changes, converting to a Whole Life policy may be the right decision. Many Whole Life policies also have a “Cash Value” account option, and you may be able to withdraw or borrow from this account – but keep in mind that there may be penalties involved.

Your Plans for the Future

Empty nesters? Retiring? Finally paid off that mortgage? If you have these or other occurrences that are typically later in life – you still have Life Insurance needs. These needs may just be different. A policy with a cash benefit may make more sense. Or, although unpleasant to think about, a policy with a “Death Benefit” or “Final Expense” component might make sense. This would provide your spouse with funds for funeral and burial expenses.

Your unique situation is the primary factor in what life insurance you need. Let us help you review your needs and your options for life insurance coverage.

The Changing Marketplace for Cabin Insurance

Posted on by Ownby Insurance Service

In case you haven’t noticed, the insurance market has changed significantly this year. Prices are up and the options for coverage are fewer. So, what does that mean for insuring your cabin or vacation rental property? It means you need to work with someone who understands what’s going on and how it impacts your specific risks. Let’s take a look at what’s happening and how you can approach your insurance needs.

What Has Happened?
Natural disasters and other claim impacts have led to many property and casualty (P&C) insurance companies losing money. Some reports say that the P&C industry won’t be profitable again until 2025. Wildfires, hailstorms, tornadoes – all of these unexpected occurrences and more can add up quickly on claims – sometimes in bunches of the same times and locations. For many cabins and vacation properties, the impacts are greater because they are in more remote locations with less recovery and response service in place.

As a result, the premiums for most of these properties have continued to escalate. In addition, some companies have stopped offering coverage for them, either in certain areas or completely.

What Can be Done?
There is still coverage available for almost any property but finding it can be more of a challenge. Independent agencies like ours have access to multiple markets and can help research what’s available for your property. Once we identify your options, we can help you review the offering and the cost to discuss what’s right for you. We can also help you understand measures that might make your property less of a “risk” when these companies are underwriting your application for coverage.

Being proactive is critical when the market is in this state. Let us help you review the needs you have and help you find the right coverage for your cabin or vacation rental property. Give Brandon Patterson a call at 865.453.1414 or email brandon@ownbyinsurance.com and he’ll help you start the process!

Insurance Premiums and the Economy – What’s Happening?

Posted on by Ownby Insurance Service

Is it inflation? Is it a recession? Is it just weird? Our nation’s economy is definitely in flux right now. And while what exactly is happening might be debated, there is no debate that it is impacting everyday Americans. One of those impacts is in the cost of insurance. How and why? Let’s review the impacts and discuss your options.

Social Inflation
Referring to increases in lawsuits, the amounts awarded, and general impacts of litigation, social inflation is on the rise. Litigation funding is even a thing now, as firms and investors are “betting” on cases by backing the plaintiffs as a way to make money.

Cost of Claims
The costs to repair and replace are also a factor impacting premiums. Parts and materials, whether it be for a car, roof, building, or otherwise, are costing more and also taking longer to complete. Insurers are paying more for repairs, rental cars, loss of use, and more. Even if the amount of claims is lower, the severity of the claims is higher with these added costs.

Deductibles and Premiums
Some may suggest that saving money on your insurance is as simple as raising your deductible. And while that certainly can reduce your premium, the whole point of insurance is to help indemnify the party or parties that suffered the loss. With a higher deductible, you’d receive less money in the case of a large loss, and also have a higher threshold of when it would even make sense to file a claim. Raising your deductible is sometimes a solution, but it may only be a short-term fix.

What Can you Do?
We can help you review the coverages you have, look for options, and even consider variables like bundled coverage for saving money. There isn’t always a need to lower your coverage amounts to save money, and we want to help you understand your choices. In addition, we can discuss if you really have the proper limits and endorsements to make sure the things you want to protect are truly covered. Because sometimes, spending money can save you money in the long run.

Let us go to work for you! Give Brandon Patterson a call at 865.453.1414 or email brandon@ownbyinsurance.com and he’ll help you start the process!

Do You Have Coverage for Your Hunting Equipment?

Posted on by Ownby Insurance Service

As we get into the Fall hunting season, many people are prepping their gear and making their plans. The value of much of that gear can add up quickly. Tree stands, apparel, ammunition, and not to mention, firearms and bows, can all add up to a hefty sum. So, are you covered by insurance for this equipment? The answer may depend.

Property Policies

Your homeowners, renters, or other property policies may provide coverage for you on these items. Typically, you have personal property coverage in your property owner’s policy with a certain limit that could likely be enough to cover the value of your hunting equipment. However, there may be other restrictions to note in that policy.

Limits and Deductibles

Your property policy likely has a specified limit for coverage of “contents” or personal property. If the combined value of your hunting equipment and/or firearms is higher than that limit, consider that a total loss might leave you without enough coverage to replace these items. Many homeowners’ policies specifically limit firearms coverage to $5,000 for theft. In addition, you likely have a deductible that may be $1,000 or more. If you have a loss to a single piece of equipment that is worth around $1,000 or less, that deductible may negate some or almost all of your claim payment.

Other Options

There is a possibility of having a standalone policy, adding an endorsement to your current policy, or increasing specific coverage through scheduling items. However, many companies have different limits or exclusions around these options, and it’s important to talk with your insurance agent to help understand what’s best for covering your equipment. In addition, increased liability options through coverage like personal umbrella policies might be something else to consider as you discuss your own risk management of things like hunting accidents or the use of stolen weapons.

Get in touch with Brandon Patterson at our agency by calling 865.453.1414 or emailing brandon@ownbyinsurance.com to discuss your insurance options, and happy hunting!

The Impacts of Social Inflation on Insurance

Posted on by Ownby Insurance Service

You may have heard or read that the insurance industry is experiencing a “hard market” right now. What does that mean? It typically refers to a marketplace that has increased premiums, stricter underwriting, and a tighter appetite of what risks insurance companies are willing to cover. And while impacts like material costs, labor shortages, and prolonged repairs are having an impact, some insurance coverages are facing great impacts from social inflation as well.

What is Social Inflation?

According to the National Association of Insurance Commissioners (NAIC), social inflation is a term to describe increasing litigation costs brought by plaintiffs seeking large monetary relief for their injuries. They also reference two specific concerns around this idea – “nuclear” verdicts and third-party litigation funding.

Nuclear Verdicts

For a verdict to fall into this nuclear category, it has to exceed $10 million in punitive and compensatory damages awarded. The NAIC cited a study by the Institute for Legal Reform found that showed nuclear verdicts were most frequently found in product liability (23.6%), auto accident (22.8%) and medical liability (20.6%) cases. The most common intersection of these claims is in commercial auto, where auto accidents and medical liability is heavily preyed on by attorneys.

Third-Party Litigation Funding   

Paying for other people’s lawsuits? It may be becoming big business. In fact, over $17 million has been spent globally by financiers on funding lawsuits for others. NAIC further notes that a Swiss Re report found that third-party litigation funding is “contributing to growing loss ratios for excess liability, commercial auto, medical malpractice and general liability” and leading to increased premiums for consumers.

Impact to You

All these components add up to more and higher claims that insurance companies are trying to offset. And even with higher rates, the Insurance Information Institute reports show that the property & casualty insurance industry is likely to remain unprofitable until 2025. So, for you, higher premiums are currently the likely trend in insurance.

How high are these increases? Different companies will have different approaches. Get in touch with Brandon Patterson at our agency by calling 865.453.1414 or emailing brandon@ownbyinsurance.com to discuss your insurance options and find the price and coverage that’s right for you.

What Coverage do you Need for Signs and Murals?

Posted on by Ownby Insurance Service

If your business’s building has a mural painted on its walls, or a monument sign that helps brand your location, you know that these things often add character to your property. If they were damaged, destroyed, or vandalized, you’d want them restored in the best way possible. However, some commercial property policies may not have the coverage you need to do so. Let’s talk about why.

Limits

Your commercial property insurance likely has some coverage that would pay for damage to signs or murals in a covered loss. The question is, what are the limits? If you paid an artist $3,000 to paint a mural on the side of your building, and someone drives into that wall – how much coverage do you have? Your insurance would likely pay for repairs to the wall, but would you have enough to have the mural redone?

The same may be an example for a roadside monument or elevated sign. If you have a BOP for your business’s insurance, there may not be coverage for outdoor signs that aren’t connected to the building. They likely can be added by an endorsement to the policy, however, and the same question about limits needs to be asked. How much would it cost to replace your sign and

Exclusions

Another thing to note about your signs and murals is what may be excluded from being covered. Some policies may exclude vandalism from coverage, and others may have specific language about lighting for signage. If you are currently having a mural painted, you may want to ask about coverage for it while it is in-process as well. Especially if it is a large financial investment.

Let’s talk through your signage and mural needs that may be unique, and make sure you have the coverage in place to protect them. Contact Brandon Patterson at 865.453.1414 or brandon@ownbyinsurance.com

What Does Your Small or Hobby Farm Need for Coverage?

Posted on by Ownby Insurance Service

If you have land on your property that you use for farming, you may think that you don’t need additional coverage if you don’t farm commercially. But the answer to that depends on your specific situation. Let’s take a look at what may be some common risks for small and hobby farms.

Property 

The coverage you need for farm property is typically based on how much land you use for it, and what those activities encompass. If you have a farm that is used primarily for enjoyment and not as a profit source, you likely have a “hobby” farm. It is unlikely that your home insurance policy properly covers your hobby farm, and you should discuss the additional options for your coverage. A farm insurance policy may be the best option, and

Equipment 

If you do any farming, you probably have equipment that you utilize for the work. If you have a “blanket” farm policy, your equipment may be covered. But not all farm policies offer blanket coverage, and even if they do, the limits may not be high enough for what you need.

Livestock

Even with one cow or just a few chickens, you’re adding to your risk by having livestock. And while you may not need expanded coverage like a Livestock Risk Policy, you may be able to add an endorsement for livestock coverage onto your farm policy.

Liability

Have a pumpkin patch, corn maze, apple picking, etc. as activities on your farm? If you allow visitors onto your property – even for a small window of time – you should consider the liability you may incur should someone get injured. And although you may take the necessary precautions for safety, accidents happen. Small Farm Insurance may be the answer here, and the parameters of your use will determine the coverages you need.

Let us help you review the risks of your farm and help you understand the options you have for coverage. Contact Brandon Patterson at 865.453.1414 or brandon@ownbyinsurance.com

Does a Home-sharing Endorsement Properly Cover Investment Property?

Posted on by Ownby Insurance Service

The world of investment property has changed significantly over the past decade, as the short-term rental market has seen a meteoric rise thanks to platforms like VRBO and Airbnb. This has resulted in new risks as well as new insurance coverage options. One such option is home-sharing endorsements, which are being added to many individual home insurance policies as a way to cover short-term rentals. But is the right solution for covering investment properties? That depends on several factors, so let’s review them.

Personal and Commercial Use

You likely already know that your personal insurance is unlikely to cover commercial use of your property. A home-sharing endorsement may add coverage for property damage, theft, or liability claims that result from renters. But these coverages are typically tied to a primary residence. So, if you rent out rooms in your home or possibly even a guest house on the property of your primary residence, this may be a good option. If you have a cabin, vacation home, or other seasonal property, a claim filed through this endorsement that relates to a renter will likely be uncovered.

Primary Residence

If you have investment property like a short-term rental, or even your own cabin or vacation home that you rent out while not in your use – it is not your “primary residence” unless it is your legal domicile. As such, your homeowners policy is unlikely to cover it, no matter what endorsements are added. Insurance policies are contracts, and in this scenario they use the term “residence premises” to refer to the dwelling where you reside. In addition, if you’re being paid for rental, you’re involved in a commercial transaction.

Covering Investment Property Risks

What you actually need to cover investment property may still vary, but let’s start with the basics. Investment property, rental property, or even sometimes call landlord risk – these insurance policies are designed to cover you for losses to property you are renting out to others. Property damage, injuries, theft, and liability are all parts of this coverage you need to understand and know your limits for in the policy you have in place. You also need to keep in mind that while some coverages may be “bundled” into policies, there are often additional gaps to address. For example, sewer backup or flood insurance are unlikely to be included in these policies. Other considerations like loss of income or tenant rent default should also be discussed.

The Use is the Key

How is your property being used? That is the question to start with. Paying less money to add an endorsement won’t save you in the long run if you have a claim denied due to the policy language or exclusions.

Let us help you review your options and determine the coverages that are best for you! Contact Brandon Patterson at 865.453.1414 or email brandon@ownbyinsurance.com and let us help you get started.

Can Your Business Improve Your Work Comp Experience Mod?

Posted on by Ownby Insurance Service

Owning and operating a business can be very rewarding and potentially very profitable, but it can also be very expensive. Having inventory, property, taxes, and especially employees – it all comes with costs. But some of those costs can be controlled, is your workers’ compensation insurance one of them? Possibly so, and the source of control may be your experience modification factor (also known as experience mod rate, EMR, xmod, Mod, and more). Let’s review how.

Safety Programs

As you can read in another of our Blogs, your Mod is based on the comparison of your business to others in your industry. The average Mod is 1.0, so your business will be higher or lower depending on the circumstances. If you have a good business history with minimal and less severe claims, you will likely have a Mod lower than 1.0.

So, can you lower this Mod? Yes, and having a safety program in place is a great first step. To build one, take steps that include examining your risks, determining processes, deciding who is responsible for them, documenting the plan, and implementing/reviewing the plan and its results.

Your Data

Insurance companies are underwriting your coverage to predict future losses. They’ll review your company’s history and compare it to others in your industry. Making sure this data is accurate is critical. What are your employees’ roles, and are they classified properly. Is the industry you’re being compared with accurate to the work your company does? Do they understand your safety plan and the risk management measures you have in place. Work with your agent and the insurance company to be sure this information is complete and accurate.

Covering Investment Property Risks

What you actually need to cover investment property may still vary, but let’s start with the basics. Investment property, rental property, or even sometimes call landlord risk – these insurance policies are designed to cover you for losses to property you are renting out to others. Property damage, injuries, theft, and liability are all parts of this coverage you need to understand and know your limits for in the policy you have in place. You also need to keep in mind that while some coverages may be “bundled” into policies, there are often additional gaps to address. For example, sewer backup or flood insurance are unlikely to be included in these policies. Other considerations like loss of income or tenant rent default should also be discussed.

Claims Prevention

In addition to safety on-site, preventative measures can be taken before the job ever starts. Onboarding, training, screening, and testing of employees and potential hires can help you save.

In addition to safety, the above steps may help your company run more efficiently – which may lead to happier employees and higher profit margins. It’s a win-win!

Let us help you understand your Mod and the options you have to improve it! Contact Brandon Patterson at 865.453.1414 or email brandon@ownbyinsurance.com and let us help you get started.