Please ensure Javascript is enabled for purposes of website accessibility

Category: Insurance Tips

Workmanship, Materials, and Recall – Oh My!

Posted on by Ownby-Client-Login

Trade contractors have a lot of factors under their control, and many that aren’t as well. So, what happens when there is an issue with their work? Depending on the issue, Contractors Errors & Omissions (E&O) Insurance might come into play. This coverage is meant to protect them from damages that result from their work, and often covers:

  • Faulty Workmanship
  • Defective Materials
  • Recall of Work
  • Design Services (usually limited)

Let’s drill down into each of these.

Faulty workmanship can happen, even to experienced contractors. These issues can cause delays in building, reinstallation/repair costs, and potentially loss of income. If your client were to take action against you for these losses, an E&O policy may help protect your financial interests.

Defective materials are usually going to be out of your control, but they can still cause problems directly for the contractor. If you install these materials and they’re found to be defective, there may still be liability for you. And again, an E&O policy may respond. The same could apply if items you worked on had recalls, and this is different from product recall policies in that damages may not be caused by bodily injury or property damage.

Design service issues could result from your decisions about a project. Perhaps you decided on the type of materials or size of certain materials. If those materials are determined to have caused an issue, you may be held as the responsible party. That could again result in a financial claim where an E&O policy would be involved.

So, what are your exposures as a trade contractor and how do/would your current policies address them? Reach out to our specialist Brandon Patterson at brandon@ownbyinsurance.com or 865.453.1414 and he will walk through these coverages with you.

Your HOA is Watching You, Who’s Watching Their Liability?

Posted on by Ownby-Client-Login

Chances are, if you live in a neighborhood or a condominium, or even if you own a timeshare or cooperative, there is a group that oversees the standards and covenant of that community. General known as homeowners associations (HOAs), this group may provide benefits such as common space and community upkeep, neighborhood events, shared amenities, and group guidelines. You likely pay dues to be part of this group, and you probably agreed to abide by the guidelines when you moved into the home. But with those benefits also comes some liabilities. Who is protecting you and your neighbors from those risks? Here are some of the most common:

Common Space Liability – If you share a common space with your neighbors, whether it be a dog park, greenway, playground, picnic area, or more, there may be shared liability for injuries that occur in those spaces.

Shared Property Damage – If your neighborhood or condo shares property or a building(s), an HOA policy may cover property damage to that shared risk should it occur. For example, if a fire destroys the community’s gym, an HOA policy would likely come into play for recovering on a claim.

These HOA policies are also called master policies, and there are different types commonly found. For single-home neighborhoods or subdivisions, the master policy typically does not extend the homeowners coverage, but rather covers the common areas and shared liability only. For condos, there are typically three types of master policies:

Bare Walls Coverage – Typically covers the basic structure of the condo.

Single Entity Coverage – Typically covers the basic structure plus entire walls, cabinets, and fixtures.

All-in Coverage – Typically covers everything a single-entity master policy covers, but also extends to built-in appliances.

It’s also important to note that with a master HOA policy, the adjusting of claims is based off how the master deed and bylaws of the association are written. Members of the HOA should read these very carefully to be sure that their individual units are insured correctly.

In addition to these coverages, there is liability for the Board of the HOA and other risks that may need to be addressed. We’ll review those in a future article, but if you need to learn more about HOA risks and policies, please contact our specialist Brandon Patterson at 865-453-1414.

Builders Risk Insurance: Who Needs it and What’s Covered?

Posted on by Ownby-Client-Login

Builders Risk seems like a pretty self-explanatory coverage term – but is it? These policy don’t actually coverage the builder themselves, per se, but rather some of their insurable interests. For example, materials such as lumber and drywall, fixtures such as faucets and sinks, and equipment such as alarms or wiring, may be covered on a Builders risk policy while they are awaiting installation. However, there are various policies and provisions for this type of coverage – and your agent should be helping you understand what yours will and won’t cover.

Who Needs It?
Obviously, a “builder” is the most common insured for these policies, but others and eligible and may actually need the coverage. Contractors, house “flippers”, developers, retailers, and school districts are among those who may have an insurable interest in the materials for their projects. But one group that may not be considering this coverage, even though they are usually eligible for it, is home and property owners. Why? You have an insurable interest in the project, and a typical homeowners policy doesn’t cover projects under construction. Some policies may offer a supplemental builders risk policy that can be added to your homeowners coverage – but not all.

What Type of Projects are Eligible?
Another important thing to keep in mind is that this isn’t just a coverage for new construction. Remodeling and installation projects are also opening up risks that may be covered under Builders Risk. Just imagine you’re having new windows installed, and someone vandalizes them while they’re set up outside your house and waiting for the installers to complete them. In that situation, whose policy would pay? The window retailer? The delivery company? The installation company? Or maybe, none of the above. Many factors are involved that could leave you with a gap in coverage unless the right policie(s) are in place.

What Are the Policy Variables?
Loss and damage on construction sites are obviously the focus here, and there may or may not be coverage for theft, vandalism, flood, windstorm, earthquake, ordinance & law, and business income. These are not typically liability policies, although stand-alone liability policies may be available for those risks. The property that is covered may also vary, and that’s why it’s critical to understand what materials you have an insurable interest in – and whether or not they’ll covered. For example, if you’re a landscaper installing rolls of sod, but your policy only covers your equipment, what happens when the sod gets stolen?

Not sure if you need Builders Risk? Have a policy, but not sure it’s the right one? Let us help you figure it out and determine what’s best for your coverage needs. Call 865.453.1414 and let’s discuss it.

Auto Accidents with Uninsured Drivers

Posted on by Ownby-Client-Login

Data indicates that more than 23% of Tennessee drivers are uninsured. That means that if you have an auto accident in Tennessee, there is a decent chance the other driver won’t have insurance. Will your policy cover the damage to your vehicle? What about potential medical bills or time out of work? What if you need a rental car? Let’s look at some of the scenarios that may play out.

What is Your Coverage?
Obviously, you’d expect in an accident with an insured driver that if they’re at fault – their insurance will pay. But if they don’t have insurance, who pays? If you have comprehensive and collision coverage, your insurance company will likely pay for the damage to your vehicle under the uninsured motorist provisions of your policy. But how much can be covered will depend on the limits of your policy – and you’ll still have to pay a deductible. If you only have collision coverage, you may not be covered in the case of an accident with an uninsured motorist unless you’ve purchased Uninsured Motorist (UM) coverage. In this case, you will have a Collision Deductible Waiver (CDW) listed on your policy.

Uninsured and Underinsured Motorist Coverage
Tennessee does not require UM Coverage, but you can typically purchase it for your policy if it’s not already included. If you’d like additional coverage, a Personal Umbrella Policy will typically add more coverage for this “over” your auto policy. And while UM pays for property damage, Underinsured motorist coverage (UIM) pays medical bills for you and your passengers when a driver without enough liability coverage causes an accident. In the case of a driver with minimum insurance limits not being able to fully pay for injuries they cause to you, UIM coverage can provide additional reimbursement.

Impact of UM Claims on Your Insurance
Does having your insurance company pay a UM claim cause your rate to go up? It is possible, maybe even likely. A national study by the Consumer Federation of America found that insurers raise rates by an average of 9.32% after a no-fault accident resulting in an UM claim.

What to Do if You Have an Accident with an Uninsured Motorist
If you do find yourself in an accident with an uninsured motorist, make sure you take the following steps:

  • Call the Police
  • Exchange Contact Info
  • Don’t Accept or Agree to Any Payment
  • Take Photos
  • Gather Any Details You Can

Not sure about what your current policy would cover in this situation? Let us help you figure it out and determine what’s best for your coverage needs. Call 865.453.1414 and let’s discuss it.

Business Coverages You May Have Overlooked

Posted on by Ownby-Client-Login

You’ve worked hard to make your business successful, and you want to make sure it’s protected. Things like property, liability, and workers’ compensation coverages may seem obviously important – but what about the lesser-known risks?

Contingent Business Interruption Coverage
You’ve likely heard of business interruption coverage over the past couple of years, but what about contingent coverage? If your business’s activities are impacted by shutdowns of your suppliers or other third parties, having this coverage in place can help protect you if these impacts lead to revenue losses.

Cyber Liability Coverage
You’ve probably heard of Cyber Insurance, and you’ve probably seen some of the many breaches at large companies that have made the news. But companies of all sizes have cyber liability, and the more data your company stores, the greater the risks. Don’t store much data at your business? Don’t forget about ransomware and other attacks that you still need to have a plan for combating and responding.

Insurance for Signs and Murals
Spent good money on that electric street sign with an LED display? What if a driver runs into it or someone vandalizes it? What if a storm knocks it down? Signs that are detached from your business’s main building may not be covered by a commercial property policy or a business owners policy. Murals also cost money, and some may be very expensive depending on the size, location, and artist. While most policies won’t cover vandalism to murals, there may be specialty policies or endorsements that can better protect your artistic investment.

Professional Liability Coverage
This coverage can help protect your business in cases where you are sued for negligence, errors, copyright infringement, and more. Even if you think your business will never be in this situation, mistakes can and do happen.

Your business is special, and likely has unique risks. Let us help you determine the coverages you may need and may not have considered. Contact us at 865.453.1414 and let’s get started!

Log Cabin Risks That Impact Rate

Posted on by Ownby-Client-Login

They’re beautiful to look at and often fit right in with the natural landscape that surrounds them. But did you know that log cabins have some very specific risks when it comes to insurance? You’ll still find many of the factors that impact a non-log home’s insurance pricing, but here are some other factors you may not have realized impact log cabin insurance:

Properties of Wood
The wood used in construction of your log home is a factor that insurance underwriters take into account. Using larger logs (thicker than 8 inches in diameter) actually reduces your risk, as they are more resistant to wind, fire, and other damage. However, their replacement cost is higher. The wood’s resistance to fire is actually measured by a “fire resistance rating”, which actually estimates, “the period of time a building element, component or assembly maintains the ability to confine a fire, continues to perform a given structural function, or both…”

Damage and Protection of Wood
Speaking of the wood, there are obviously some traits about the material that make it more susceptible to certain kinds of damage. One of the most obvious is damage from wood-destroying insects and birds, including termites, carpenter bees, woodpeckers, and more. Typically, homeowners insurance will not cover insect or pest damage. Many people don’t find this out until they have a claim – often an expensive one – that gets denied. In addition, caring for the wood on your log home is important, as rotting wood is often excluded and “lack of homeowner maintenance” can cause claims to be denied. Staining and sealing the wood on your log cabin on a regular basis is a key piece of that maintenance.

Foundation
Log cabins have various foundation types, from concrete slabs to strips to pads (or tiers). The reason this matters is because of the potential for subsidence (gradual caving in or sinking). The sturdier your foundation, the less risk will be factored into your cost for insurance.

Roofing Material
Although many log homes now use asphalt shingle or even metal roof materials, some people like the look of a more traditional wood shingle. Unfortunately, these materials may be more susceptible to risks like fire, wind, and water damage. This will result in higher insurance rates.

What other factors will your log home encounter in the insurance underwriting process? Contact us at 865.453.1414 and we’ll discuss your specific risks and how you can find the best policy for your property.

Vacant Versus Vacation Rental – Why it Matters

Posted on by Ownby-Client-Login

Having a Homeowners insurance policy is crucial when you own a home, but what if you don’t live in the home? Homes that are left vacant for 30-60 days or more may be considered as “vacant” by the standards of your policy and may leave you with coverage gaps. Here are a few situations to consider for your properties’ insurance coverages:

Unoccupied Homes
Having a property that is completely unoccupied or rarely occupied can increase risks. Small problems that would normally be noticed by those on the property (e.g. leaks, non-working devices, etc.) can go for days or weeks without attention. These can lead to big issues, and that is why a standard homeowners policy is unlikely to provide coverage. In addition, you may have liability for accidents that occur on the unmonitored property. Not to mention, standard perils like fire, wind, and hail may occur without immediate attention.

Vacation Rentals
Properties being used as vacation rentals are likely monitored more frequently than unoccupied homes. However, they still likely have periods of being unoccupied, and they also have larger liability risks with various guests using the property. Regular homeowners policies generally exclude “business activities” like earning rental income. Have a homeowners policy with a “rental rider” or other similar endorsement? Make sure the policy covers you for the amount of times you’ll be renting. More frequent rentals are often excluded by the language in these policy additions.

Determine or Estimate Total Use
Try to determine or estimate the total use of your property for the year, whether it be unoccupied for a certain amount of time, rented for a certain amount of time, and/or owner-occupied for a certain amount of time. This will give you the information to discuss with an insurance agent so that they can help you determine the coverages you will need to adequately protect your property. Otherwise, a claim scenario may leave you with an exclusion you weren’t aware you had.

Don’t let the wrong insurance leave you with a vacancy on coverage. Contact us at 865.453.1414 to discuss the right coverages for your property.

Don’t Let Your Christmas Get Scrooged with Tree Trouble

Posted on by Ownby-Client-Login

Decorating your house for the holidays is part of the fun of the season. Many people go all out with lights, wreaths, garland, displays, and of course – the Christmas tree. These are often beautiful displays of color, family heirlooms, and more. But they can also be dangerous. So, what are the risks of these festive firs? Here are a few to keep in mind, and how your insurance may come into play if an accident happens:

Tree Fires
As you would imagine, tree fires are a concern. But did you know there are an average of over 200 tree fires per year in the U.S. (according to National Fire Protection Agency), and that they result in millions of dollars in property damage? In fact, around 1 out of every 33 Christmas tree fires results in a death. Although not that common, these concerns warrant taking the right measures to avoid them. Having the right homeowners coverage is important, but what about Holiday collections or other high valuable articles that might be on display this season? Talk with an agent about making sure you have all the right coverages in place.

Water Damage
Live trees are beautiful, but they also need care – including water. Tree bases filled with water can often leak, causing damage to floors, furniture, rugs, and more. Not to mention, a slip and fall could occur when “rocking around the Christmas tree.” You homeowners coverage and contents protection is likely to cover most of the damage, but a fall of a friend or family member could result in a large hospital bill – or even a lawsuit. Make sure you have an umbrella policy in place for additional liability coverage.

Transporting the Tree
We’ve all seen movies like National Lampoons Christmas Vacation, where traveling with a tree can end in disaster. But in real life, accidents happen as well. Tree limbs can scratch and dent your vehicle, fly off and cause other damage, or even be the cause or contributor to an accident. Do you have the right auto coverage if the worst occurs? Make sure to talk with an agent and be prepared.

Don’t let one of these Holiday headaches ruin your season. Contact us at 865.453.1414 to discuss the coverages that you need to protect your family and your possessions.

A Holiday Disaster Strikes – Would You Be Covered?

Posted on by Ownby-Client-Login

The Holidays are a great time of year, and it’s always fun to spend time with friends and family. We’ve all been to a Holiday party, and maybe even hosted one before. But let’s say the party you host this year ends in disaster. Everyone is having a good time, but then one of guests has too much to drink. On their way driving home, they cause an accident and are also charged with a DUI. They then sue you, claiming they were “overserved” at your party. The victim of the accident also sues you, and things are not looking good. Would you have any coverage from your current insurance policies?

Your car wasn’t involved, but the event did take place at your home. Your homeowners insurance will generally include some liability coverage – but the limits are often $500,000 or less. They may even be as low as $100,000. With lawsuits that could include medical bills, disability, and more, even $500,000 may leave you well short. But there is a way to increase your liability coverage and protect your assets outside of your home and auto coverage – a personal umbrella policy.

Personal umbrella policies, also known as PUPs, can provide protection over your home and auto policies. And often, an additional $1 million in coverage may cost you just a few hundred dollars per year. While these policies are generally written by the same insurance company that covers your home and auto, there are “standalone” policies available that can be written over different companies.

If your total assets (home, vehicles, boat, checking, savings, investments, etc.) are over $1 million, you need a policy(ies) that cover those assets. Higher limit PUPs are available as well, and you should talk to your insurance agent and financial advisor and be sure that you have the coverage you need in place.

Need help with an insurance review? Give us a call at 865.453.1414 and we’ll help you start the process!

*Coverage and claims payments are always subject to the language in your insurance policy. Be sure you discuss it with your agent.

A Guide to Preventing Slips and Falls Around Your Business

Posted on by Ownby Insurance Service

Whether you actually hurt yourself or just suffer from a bruised ego, slipping and falling is always a nasty shock. At home, you can usually just dust yourself off and forget about it, but if you own a business, slips and falls suddenly become much more serious. Maintaining a safe business property for your employees and customers becomes paramount, both to give them a great experience, and to prevent any big insurance claims from knocking at your door.

Reduce your business’s potential for hazardous slips and falls by implementing these safety tips:

Secure Stairways and Ramps

Stay up to date with your city’s local building codes, and install the proper handrails along every stairway and ramp. Even tiny platforms comprised of 1 or 2 steps should have some kind of banister in place. This gives stability to your pedestrians and helps protect you if someone falls in those areas and decides to pursue legal action against you. Also consider lining your stairs and ramps with a non-slip material.

Maintain Walkways and Lawn Areas

Remove obstructions from any walking paths that your employees or customers have to use. It is also important to repair uneven, broken, or bumpy surfaces in the parking lot or on the sidewalk. In the winter, make sure your sprinkler systems are turned off and drained to prevent leaks and icy patches around your establishment.

Keep Safety in Mind All the Time

Aside from covering the basics to keep your business up to code, just make it a habit to look for potential slipping/falling hazards located all around your business.

  • Maintain adequate lighting in all areas where pedestrians will be walking.
  • Keep “Wet Floor” signs in areas where your employees can conveniently access them to warn people away from spills.
  • Repair torn carpet, loose or missing floor tiles, and other flooring materials as soon as you can after they are damaged.
  • If you live in an area with heavy snowfall, establish a snow removal plan for parking lots, sidewalks, and dumpster areas.
  • Keep emergency phone numbers posted in areas where people can see them easily.
  • Stay stocked up on first-aid kits and keep them in plain site. These emergency resources help you and your staff minimize the damage of a bad fall.

When an employee or a customer takes a fall at your business, the consequences have the potential to be dire. Prevent them as much as you can by keeping the area clean and maintained. People will be safer and your business will look better for your efforts! Overall, make sure you are protected by a solid insurance policy that will cover your company if someone gets hurt anyway. You can never be too secure!