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Category: Risk Management

Mitigate Risks and Save on Insurance Premiums

Posted on by Ownby Insurance Service

Risk is an inevitable part of running a business, but the way you manage it can greatly impact your financial stability and long-term success. For small businesses, risk mitigation can also lead to something even more desirable – save on insurance premiums.

Let’s explore four key strategies that every small business can implement to mitigate risks and potentially lower insurance costs.

1. A Comprehensive Safety Plan
A well-crafted safety plan is the foundation of any risk management strategy. Workplace safety should be prioritized, not just for the well-being of your employees but also to minimize potential liabilities.

Steps to develop a safety plan:

  • Identify Hazards: Walk through your workplace to identify hazards that could harm employees, customers, or visitors. Focus on common risks like slips, trips, falls, ergonomic injuries, or equipment failures.
  • Implement Training Programs: Train employees regularly on workplace safety procedures. Ensure they know how to use equipment, handle hazardous materials, and respond to emergencies effectively.
  • Regular Audits and Updates: Revisit your safety protocols to account for changes in your business operations. Conduct regular safety audits to protect all involved.

2. Strengthen Cybersecurity Practices
Cybersecurity is critical, especially for small businesses where digital vulnerabilities can quickly escalate into expensive breaches. A single cyberattack can cost thousands in recovery efforts and permanently damage customer trust.

Effective cybersecurity practices include:

  • Update Software Regularly: Update all hardware, software, and firmware regularly to fix security flaws as soon as they’re discovered.
  • Implement Multi-Factor Authentication (MFA): Add an extra layer of security to your business accounts, making it harder for hackers to gain unauthorized access.
  • Educate Employees: Conduct regular training for employees on common cyber risks such as phishing and scams. Consider third-party “tests” of your team’s awareness.

3. Invest in Loss Prevention Programs
Proactively seeking to prevent losses before they happen can make your business more resilient. Loss prevention not only preserves your operational integrity but also makes you a lower-risk client in the eyes of insurers.

Examples of loss prevention measures include:

  • Install Security Systems: Use alarms, surveillance cameras, and access control systems to protect your physical assets.
    •Maintain Equipment Regularly: Stay on top of maintenance schedules to minimize accidents caused by faulty machinery or infrastructure.
    • Emergency Response Planning: Develop a clear plan for handling emergencies such as fires, floods, or natural disasters. Equip your workplace with emergency kits and conduct regular evacuation drills.

4. Assign Risk Management Responsibilities
Effective risk management often comes down to human oversight. Assigning dedicated personnel to identify and tackle risks ensures this critical area of operations doesn’t fall by the wayside.

Key tips for managing risk responsibilities:

  • Appoint a Risk Officer or Manager: Designate an employee or team responsible for observing and managing risks across your organization.
  • Document and Track Incidents: If a minor incident occurs, document the details. Tracking these enables proactive fixes before a pattern of larger risks emerge.
  • Use Risk Management Software: For smaller businesses without a full team, affordable tech solutions provide deeper insights into operational risks.

The Connection Between Risk Mitigation and Insurance Savings

Insurance companies assess the likelihood of a claim being made when assigning premium rates. By implementing robust safety measures, managing losses, and using technology to prevent risks, you’re actively reducing the probability of incidents. This lower risk profile directly translates into potential insurance savings.

Looking for more insights on how to protect your business? Talk with Brandon Patterson on our team about how these practices can go hand-in-hand with your insurance coverages and the resources that may be available to policyholders.

How Claims Impact Your Insurance Premiums

Posted on by Ownby Insurance Service

Your insurance premium is based on many factors, from the type of coverage you choose to your overall risk profile. But one aspect that often surprises policyholders is the impact of claims on their premiums. Whether you’ve recently filed a claim or you’re thinking about it, it’s important to understand how claims can influence the cost of your coverage.

Loss History: A Snapshot of Your Risk

Your loss history, or claims history, is a critical factor insurers use to determine your premium. This is essentially a record of all the claims you’ve filed in the past. Insurers view this as a representation of your risk level – policyholders who have filed multiple claims are generally seen as more likely to file additional claims in the future.

Each insurer has its own thresholds for how claims history impacts your premiums, but generally, past claims can lead to higher premiums.

Why Does Your Loss History Matter Impact Your Insurance Premiums?

Your loss history paints a picture for your insurer. For example:

  • If you’ve experienced multiple incidents, it could indicate a higher likelihood of future claims.
  • A long history of claims, even if they’re for relatively small amounts, can label you as a higher-risk policyholder.

While you can’t change your past claims, being aware of how your loss history is assessed can influence your approach to future claims.

Claim Frequency and Size Matter

Number of Claims

In insurance, the old saying “the fewer, the better” rings true. Filing multiple claims within a short time – even for small amounts – can signal a higher risk level to your insurer. Insurers often see frequent claims as an indicator of risk-prone behavior, even if the claims themselves are low-cost.

To manage your premium effectively:

  • Avoid filing claims for minor damages that fall close to or just above your deductible.
  • Consider whether the cost of repairing or replacing an item out-of-pocket is more affordable in the long run.

Claim Size

The size of the claim matters just as much as the number. Large claims require significant payouts from the insurer. When an insurer has to pay a big settlement for a loss, the chances are your premium will move upward to reflect the cost.

For instance, a single high-value claim – such as a major accident or property damage – might have a bigger impact on premiums than several smaller claims.

The Impact of Your Deductible Choice

Your insurance deductible – the amount you agree to pay out-of-pocket before your insurance kicks in – also plays a major role in claims and premiums. Filing claims for damages that barely exceed your deductible can lead to higher premiums in the future, meaning you’re left paying more overall.

The Value of a Claims-Free Credit

Insurance providers often reward policyholders who don’t file any claims over a certain period. This is commonly known as a claims-free discount or credit. Maintaining a claims-free record demonstrates a lower risk level, which insurers may reward with a reduced premium or special discounts.

Filing a claim could result in the loss of this credit, which can significantly increase your premiums in the long term. Depending on your provider, the impact of losing a claims-free credit can sometimes outweigh the benefit of filing a minor claim.

“Then Why Do I Even Have Insurance?”

All this doesn’t mean you should avoid filing claims entirely. Insurance exists to protect you in situations where the losses are too great to bear out-of-pocket. However, carefully evaluating the situation and considering the long-term implications can help you balance coverage with premium stability.

Smart Tips to Manage Insurance Claims and Premiums:

  1. Review Your Policy Carefully
    Understand your deductible amount, what types of incidents are covered, and how claims may impact things like claims-free discounts.
  2. Weigh Filing a Claim Against Out-of-Pocket Costs
    If the repair or replacement cost is close to your deductible, it may save you money long-term to pay out-of-pocket rather than file a claim.
  3. Keep Your Loss History in Mind
    Evaluate how additional claims could impact your overall risk profile and premiums.
  4. Focus on Preventative Measures
    Take steps to avoid future incidents, such as securing your home, maintaining your property, or installing safety features. Proactively reducing risks can help keep your premiums manageable over time.
  5. Bundle Your Insurance Policies
    Many insurers offer discounts for bundling, which can offset increased premiums due to claims.
  6. Ask About Claims Forgiveness
    Some insurers offer “claims forgiveness” features, where your first claim won’t impact your premium. Consider whether this add-on is available and worth adding to your policy.

When to File

Ultimately, balancing the cost of a claim versus the long-term implications for your premium is key. By thinking strategically and being proactive, you can ensure your insurance remains both effective and affordable. If you’re unsure, discuss the deductibles and potential impacts of filing the claim with our team and we’ll help you understand your options – but we won’t make the choice for you. That’s your decision!

Personal Umbrella Policies: Why You Absolutely Need One

Posted on by Ownby Insurance Service

We live in a world where personal risk exposures are higher than they’ve ever been. Whether you’re a homeowner or a renter, understanding the importance of a personal umbrella policy (PUP) can protect you from the unexpected.

The Growing Landscape of Personal Risks

Increased Lawsuits

The frequency of lawsuits has been steadily climbing, catching many off guard. Everyday situations like car accidents, slip-and-fall incidents, or even pet-related injuries can escalate into costly legal battles. Homeowners specifically face heightened risks as they balance the responsibilities of property ownership and increased exposures.

Higher Verdicts in Liability Cases

Courts are awarding higher verdicts, placing individuals’ finances at greater risk. In many cases, standard home or auto insurance policies may not provide sufficient coverage to protect personal assets. Imagine a scenario where an incident occurs on your property, leading to a lawsuit that results in a settlement exceeding your existing coverage limits. Without additional protection, your personal savings, investments, and future earnings could be at stake.

Increased Personal Risk Exposures

Today, personal risk exposures are everywhere, from social media interactions to hosting events at home. Homeowners, for instance, might host a neighborhood barbecue where an accident could lead to legal action. Parents, on the other hand, face unique risks associated with children’s activities, like sports or playdates, which can unexpectedly result in injuries or damages.

Benefits of a Personal Umbrella Insurance Policy

Given these risks, a personal umbrella insurance policy offers peace of mind through several key benefits:

Expanded Coverage Limits

A personal umbrella policy provides an additional layer of liability coverage beyond the limits of your existing home, auto, or other personal insurance policies. This means that if you face a situation where damages exceed your standard coverage, your umbrella policy steps in to cover the difference. This can prevent significant out-of-pocket expenses and protect your assets.

Cost-Effective Protection

One of the most appealing aspects of a personal umbrella policy is its cost-effectiveness. For a relatively small increase – often as low as a few hundred dollars – in your overall insurance premium, you gain substantial additional coverage, offering a high level of protection for life’s unpredictable outcomes.

With personal risks more prevalent than ever, having a PUP is not just a luxury – it’s a necessity. By providing extended coverage limits and protection against significant liability claims, an umbrella policy is an essential addition to any comprehensive insurance strategy.

Contact Brandon Patterson on our team at brandon@ownbyinsurance.com about your PUP options.

Do You Know These 4 Often Overlooked Coverages for Property Managers?

Posted on by Ownby Insurance Service

When it comes to insurance, property managers and residential building owners often focus on general liability and property coverage. While these are crucial, there are additional risk exposures that need to be addressed. Here are four important types of coverage you might be overlooking:

  1. Errors & Omissions (E&O) Coverage

    What is it?

    Errors & Omissions insurance may help protect you against claims of negligence or inadequate work. If a tenant sues you for failing to perform your duties or for providing incorrect advice, E&O coverage might help with costly legal fees and settlements.Why you need it:
    Property management is a complex field where mistakes can happen despite best efforts. Whether it’s a clerical error that leads to financial loss or a misstep in tenant placement, E&O insurance provides vital protection.

  2. Tenant Discrimination Coverage

    What is it?

    This coverage offers protection if a tenant (or prospective tenant) alleges discrimination based on race, religion, gender, etc., during the rental process or tenancy.

    Why you need it:

    Even with the best intentions, discrimination claims can arise and lead to expensive lawsuits. Tenant discrimination coverage can help manage the financial burden of legal defense costs and settlements.

  3. Workers’ Compensation Coverage

    What is it?

    Workers’ compensation insurance can help cover medical expenses and lost wages for employees who get injured while working on your property.

    Why you need it:

    If you employ staff such as maintenance workers, cleaners, or security personnel, workers’ compensation is often legally required. But even office staff may have risk exposures such as moving large packages or injuries during on-site work. It can also protect you in lawsuits brought by employees for workplace injuries.

  4. Cyber Liability Coverage

    What is it?

    Cyber liability insurance protects against data breaches and cyber attacks, covering costs like legal fees, notification expenses, and compensation to affected parties.

    Why you need it:

    Property managers handle sensitive data, from tenant applications to payment information. A breach can not only damage your reputation but also lead to significant financial consequences. Cyber liability coverage helps mitigate these risks.Have you considered these overlooked coverages? We’re here to help you better protect your business and assets. For more detailed advice tailored to your needs, contact Brandon Patterson on our team at brandon@ownbyinsurance.com

On the Horizon: Cabin and Vacation Rental Insurance Trends as 2025 Draws Near

Posted on by Ownby Insurance Service

If you are a vacation rental owner, cabin rental owner, or rental property owner, understanding the current trends in the insurance market is essential to managing and protecting your investment. The landscape in 2023 is shaped by a series of challenges and shifts that are important to consider when evaluating your insurance options. Here’s a detailed look at the trends and challenges facing the cabin and vacation rental insurance market today.

The Market Trends

We’ve all heard talk of inflations impact on our economy, and although it is down from a peak of 9% in mid-2022, its effects continue, including homeowner and vacation rental insurance markets. Elevated prices for building materials and construction labor have persisted along with the timeframes for that works completion. This adds up to make rebuilding or repairing properties a costly endeavor. For rental property owners, this means higher expected costs and the need for adequate insurance coverage to mitigate potential financial impacts.

Increased Costs Due to Natural Disasters

Natural disasters and severe weather have become a prominent concern in the cabin and vacation rental insurance market. In 2023 alone, there were 28 severe weather events with estimated costs ranging from $1 billion to $10.5 billion. Unfortunately, vacation and cabin rental properties are frequently in areas with higher risk for natural disasters because of the correlating natural beauty of those areas. Forests, mountains, and coasts are amazing, but can also be inherently risky. Rental property owners, particularly those in high-risk areas, should assess their policies to ensure sufficient protection against these increasingly common events.

Challenges in the Insurance Marketplace

Insurance companies’ willingness to provide property insurance remains low, especially in regions with a history of significant losses. This cautious stance has led many insurers to exit markets deemed too risky, leaving property owners with fewer options. Consequently, those remaining in the market may face increased premiums or restricted coverage terms.

Growth of the Excess & Surplus Insurance Market

With traditional insurers pulling back, the excess & surplus (E&S) insurance market has expanded to fill the gap. While E&S insurers can offer more specialized coverage options, they often come with higher rates and/or reduced coverage compared to standard insurance policies. Additionally, different regulations governing E&S insurance can complicate decision-making for property owners unfamiliar with these policies and their restrictions or language.

What Rental Property Owners Can Do

Given these trends and challenges, vacation and cabin rental owners should take proactive steps to safeguard their assets:

  • Regularly Review Insurance Policies: Ensure that your coverage is up-to-date and accounts for current rebuilding costs and potential natural disaster risks.
  • Explore Additional Coverage Options: Consider E&S policies if traditional insurance is unavailable, but be mindful of the potential trade-offs in terms of cost and coverage.
  • Stay Informed About Market Changes: Keep abreast of news and developments in the insurance sector to anticipate and adapt to changes that may affect your coverage needs.

Talk with those that understand this market and can help guide you. Brandon Patterson and our experienced team can help you navigate the cabin and vacation rental insurance market. With knowledge, property owners can better position themselves to protect their investments and maintain financial resilience in the face of unforeseen events.

Reach out to Brandon today at brandon@ownbyinsurance.com for help with your coverage needs!

Steps Property Owners Can Take to Mitigate Natural Disaster Risks

Posted on by Ownby Insurance Service

Natural disasters can strike without warning, causing immense damage and disruption. For homeowners, commercial building owners, property managers, and real estate investors, understanding how to reduce risks and prepare for potential impacts is not only important for your investment – it’s important for safety. And while they can’t be completely prevented, the impacts from disasters may be lessened with the right measures.

Fire Prevention and Protection

Regular maintenance plays a crucial role in fire prevention. Ensure that electrical systems, heating equipment, and other potential fire hazards (e.g., fireplaces and chimneys) are routinely inspected by qualified professionals. Clear your property of debris, dead vegetation, and any flammable materials.

Your smoke alarms are your first line of defense in detecting a fire. Test them frequently to ensure they work properly and replace batteries at least once a year. Consider installing interconnected smoke alarms for enhanced safety.

Fire extinguishers should be accessible, fully charged, and inspected annually. Make sure everyone on the property knows how to use them effectively. Choose extinguishers that are suitable for different types of fires (e.g., electrical, grease) and placed in the spaces where these issues would be more likely to occur.

For commercial buildings, understand where sprinklers are required – but also where they could do the most good. A sprinkler protection system could mean the difference between fire damage and a total loss in a fire. Have them regularly inspected and tested by professionals. You might even save on your insurance premium if these measures are in place.

Understand Your Risks

Identify the specific natural disasters that could impact your property. Are you in a flood plain? The Federal Emergency Management Agency (FEMA) has flood maps available that identify zones of flood risk. Are you in a higher risk area for wildfires? FEMA has risk zone maps for that as well. What about earthquakes? Check out the info from the U.S. Geological Survey for that risk information.

Know Your Coverage

Ensure your insurance policies cover the natural disasters that pose the greatest risk to your property. Typically, property insurance policies do not include coverage for floods, earthquakes, or sinkholes, so additional policies might be necessary. Work with our agents to tailor your coverage to the specific risks associated with your property. Regularly review your policies to ensure they align with any changes in risk or property value.

Taking proactive steps to mitigate disaster risks can save property owners significant time, money, and stress. Implementing fire prevention measures, understanding specific risks, and ensuring adequate insurance coverage are key strategies for safeguarding your investments. By staying informed and prepared, you can strengthen your property’s resilience against natural disasters.

Contact Brandon Patterson on our team at brandon@ownbyinsurance.com for more information on risk reduction for your property.

Why Aren’t all Insurance Policies the Same?

Posted on by Ownby Insurance Service

It’s a reasonable question to ask. If I am looking at a home insurance policy with insurance company A versus one with company B – shouldn’t they offer the same coverage? Isn’t cost the determining factor in the difference? The answer, however, is much more complicated.

Insurance companies in Tennessee file policies and rates with the Department of Insurance. These policies contain the specifics of what they’re going to offer, and the rate schedule for what they intend to charge. They are based on specific calculations for each company, and are often very different. While many use “forms” from the Insurance Service Office (ISO) that are the same, changes and even proprietary forms are use across the industry. So, what do you need to know about how and why they’re different? Let’s review it.

The Key Policy Differences You Should Know

1. Limits on Amounts of Coverage

One of the fundamental differences between insurance policies is the limit on the amounts of coverage they provide. Coverage limits dictate the maximum amount an insurer will pay for a covered loss. For example, a homeowners’ policy may have different limits for dwelling, personal property, and liability coverages. It’s essential to review these limits and ensure they align with your needs and financial situation. Insufficient coverage can leave you vulnerable, while excessive coverage might result in higher premiums than necessary.

2. Policy Exclusions

Policy exclusions are specific conditions or circumstances under which the insurance company will not provide coverage. These exclusions vary widely between policies and can significantly impact the protection you receive. Common exclusions include natural disasters, acts of war, and certain high-risk activities. Understanding these exclusions is critical, as they can affect your claims process and financial recovery in the event of a loss.

3. Named Perils vs. “Open” Perils Coverage

Insurance policies generally fall into two categories regarding covered perils:

  • Named Perils: This type of policy only covers losses caused by perils explicitly listed in the policy, such as fire, theft, or vandalism. If a peril is not named, it is not covered.
  • Open Perils (or All-Risk): These policies provide broader coverage, protecting against all perils unless specifically excluded in the policy. While typically more expensive, all-risk policies offer broader protection.

Choosing between named perils and all-risk coverage depends on your specific needs, risk exposure, and budget considerations.

4. Options for Endorsements

Endorsements, also known as riders or add-ons, allow policyholders to customize their insurance policies by adding specific coverages or modifying existing ones. These options enable you to tailor your policy to better fit your unique circumstances. Common endorsements include:

  • Extended Replacement Cost: Provides additional coverage for rebuilding costs that exceed the policy’s stated limits.
  • Personal Property Replacement Cost: Ensures that lost or damaged personal property is replaced at current market value rather than depreciated value.
  • Water Backup Coverage: Covers damage caused by water backing up through sewers or drains.

Reviewing available endorsements and selecting those that address your particular needs can enhance your overall protection and peace of mind.

Why Do These Policies Change Over Time?

Insurance companies continually adapt their policies to address evolving risks and limit their exposure. These changes are often based on extensive data analysis, loss history, and actuarial studies. For instance, following a surge in natural disasters, insurers may revise coverage terms, exclusions, or premium rates to reflect the increased risk. Staying informed about these adaptations is essential, as they can impact your coverage and the affordability of your policy.

Navigating the world of insurance can be complex, but understanding the key differences between policies is crucial for making informed decisions. By considering coverage limits, policy exclusions, types of coverage, and available endorsements, you can select a policy that provides the protection you need. An agent can help you understand the coverages and options available to you. Contact Brandon Patterson on our team at brandon@ownbyinsurance.com to get the support you need today!

How Does Safety and Risk Management Impact Your Business’s Insurance?

Posted on by Ownby Insurance Service

As a business owner or manager, you have enough to worry about without safety incidents impacting your team and what you do. That’s why it is so important to have proper safety procedures and risk management efforts in place – and to train your team on those policies. And while it may be common sense that better safety could lead to improvements for your business’s insurance, there may be more impacts than you realize. Here are some of the important impacts to consider as you develop your strategy.

Risk Management: Reduce Exposure

One of the most immediate benefits of implementing rigorous safety and risk management procedures is the reduction of loss potential. When businesses invest in training their team and ensuring that safety measures are consistently applied, they create a safer work environment. This proactive approach minimizes accidents and incidents, typically reducing the number of business insurance claims. Not to mention, fewer incidents means your team’s efficiency and effectiveness should increase, improving your bottom line.

Improved Employee Satisfaction

Employee satisfaction is another critical impact of robust safety and risk management protocols. Workers who feel safe and valued are more likely to be engaged and productive. High levels of employee satisfaction can lead to lower turnover rates, fewer absences, and a more positive workplace culture. Happy employees are also less likely to file complaints or claims, further reducing insurance costs.

Lower Insurance Premiums

Insurance companies review loss history, analyze risk factors, and – in some cases – review a business’s risk management procedures to determine premiums. Insurance companies view businesses with comprehensive safety and risk management plans as lower-risk, resulting in more favorable rates for their coverage. By demonstrating a commitment to safety, businesses can often negotiate better terms with insurers, thus reducing overall operating costs.

Industry Example: Manufacturing

The manufacturing sector provides a compelling example of how effective safety and risk management can lead to lower insurance costs. Manufacturing companies with clear, written, and team-reviewed safety procedures can significantly reduce the risk of injury and illness.

In fact, the Occupational Safety and Health Administration (OSHA) reports that safety efforts in the industry have led to a significant drop in worker injuries and illnesses—from 10.9 incidents per 100 workers in 1972 to 2.7 per 100 in 2022.1 This dramatic reduction not only lowers the human cost but also translates into substantial savings on insurance premiums.

Spend the Time – See the Results

Investing time, effort, and resources into safety and risk management is not just a regulatory or a compliance issue – it can be a strategic business decision if done correctly. By reducing loss potential, enhancing employee satisfaction, and lowering insurance costs, businesses can create a safer and more financially stable environment.

For small business owners, risk managers, and business managers, the path to lower insurance premiums and a safer workplace lies in proactive safety and risk management. How can you get started on a safety and risk management plan for your business? Check out the tools available from Liberty Mutual’s SafetyNet program at https://business.libertymutual.com/services/risk-control/liberty-mutual-safetynet/

If your business wants to discuss how the safety measures you already have or are implementing can help with your insurance, contact Brandon Patterson on our team at brandon@ownbyinsurance.com to get the support you need today!

1-per https://www.osha.gov/data/commonstats

Why Do Natural Disasters Elsewhere Impact Insurance Rates Locally?

Posted on by Ownby Insurance Service

A hurricane in Florida. A flood in New York. A wildfire in Colorado. What do any of these have to do with Tennessee’s insurance rates? It would be easy to say, “Oh, that’s just the insurance companies charging us for money they had to pay for other claims.” However, it goes much deeper than that, so let’s discuss why losses elsewhere impact premiums here.

To start with what you probably did know – yes – there is an impact in premiums when companies lose money elsewhere. But it’s not as simple as “greed” for insurance companies. The way these companies make a profit is measured through a “combined ratio” – a metric that calculates their loss ratio and expense ratio. In other words, the amount they’ve paid out for losses is added to their business expenses and divided by the amount of premium they’ve “earned” from insureds. A combined ratio over 100 means that the company – in the most basic sense – is losing money.

Companies that continually lose money typically cease to operate after some time. That is one reason why there is an impact on your insurance rates based on losses in other parts of the country, but it’s far from the only reason. Here are three more:

Actuarial Predictions

Companies rely on actuarial science – the discipline that applies mathematical and statistical methods to the systematic observation of natural events to assess the risk of events occurring and help formulate policies that minimize this risk and its financial impact on companies and clients – to measure future risk. When there are more disasters, these measurements increase future predictions of risk, in turn resulting in filings for higher rates.

Claims Costs

When there are significant natural disasters, especially multiple disasters across the country, there is a major impact on the supply chain. The cost of materials and labor can increase significantly, as can the time for mitigation and repairs. This all adds up to higher claims costs, which in turn lead to a need for higher rates.

Reinsurance Costs

Insurance companies buy policies of their own – called reinsurance – to share the risks they insure. As claims and costs go up globally, the price of reinsurance goes up as well.

You might ask why these companies don’t just focus on areas of less risk – but it’s not that simple. A practice called “spread of risk” lessens the concerns of one major natural disaster impacting all or most of a company’s insureds. And there is risk everywhere. We may not be impacted by a hurricane, but a hailstorm, tornado, or wildfire is certainly possible.

All these factors go into ratemaking decisions for insurance companies. As we progress through hurricane season and other natural disasters occur, just keep in mind that the impacts from these events are not always immediate and not restricted to where they are happening.

If you’d like to know more, contact Brandon Patterson on our team at brandon@ownbyinsurance.com.

What Do Charities and Nonprofits Need to Know About Their Insurance?

Posted on by Ownby Insurance Service

We are lucky to have many charities and nonprofit organizations that serve a vital role in our communities. The services and resources they provide can be a lifeline of support for thousands of people. But even organizations with the best intentions, missions, and goals have risks to consider.

As you’d imagine, liability, workers’ comp, property, and commercial auto policies are often needed for most of these organizations. But what about other risks? Here are a few that nonprofits and charities should take into consideration:

Directors & Officers

Your organization likely has a group of volunteer leaders that help support the decisions and guide you in fulfilling your mission. However, they may be held responsible for some of those decisions if they have negative results. Directors & Officers (D&O) coverage may help with defense costs, settlements and judgments associated with claims against nonprofit organizations. It may also help protect their personal assets should legal matters implicate them.

Cyber Liability

Many organizations maintain sensitive data about those they serve. This may include medical information, personal details, addresses, and more. Having cybersecurity measures in place to protect this data is critical. But just as critical is having the right cyber liability policy in place. A data breach can cost thousands of dollars, even for a small organization. To help you respond and recover, consider a standalone cyber policy that provides the right coverage for your specific risks.

Vulnerable Groups Served

If your nonprofit or charity assists with support for children, the elderly, or mentally challenged individuals, it is an unfortunate reality that there is some risk for abuse. There are professional liability coverages that may help protect your organization if allegations of abuse occur.

Some may be specific to the type of charity work you perform, and it is best to consult with your agent on what is best suited for your risks. This may assist employees in the case of false allegations as well, even potentially providing defense funds and lost wages.

Additional Coverage Considerations

In some cases, insurers may offer specific coverages or umbrella policies that are more custom to the risks a charity or nonprofit is facing. Such coverages may help better protect your organization, your leadership, and the communities you serve.

Having an insurance agent who understands the risks of your charity or nonprofit is extremely important. The services you provide are often critical for the people who receive them. Not having the right insurance may leave the work you with vulnerabilities you never considered.

Brandon Patterson from our team would be more than happy to discuss these items with your organization and help you identify risks and coverages. Please contact him for more info at brandon@ownbyinsurance.com.