Please ensure Javascript is enabled for purposes of website accessibility

Category: Risk Management

Is Your Detached Garage Covered with the Right Insurance?

Posted on by Ownby-Client-Login

In today’s world, garages are for a lot more than parking cars. People across the country have turned their garages into gyms, bars, apartments, workshops, and more. The value of those garages can change completely with these upgrades. And if your garage is “detached” from your home, the limits of your coverage may not be we you need.

Buildings that are not attached directly to the primary structure (home or “dwelling”) on your property are typically covered on homeowners insurance policies. However, many policies cover detached structures with only a percentage of the value of your home. As an example, your home may be covered for $500,000, but your detached garage may only be covered for 10% of that value – or $50,000. That may seem like a significant amount, but consider a total loss claim scenario for your detached garage. If you’ve upgraded that structure with flooring, finishing, or maybe even a sink, wet bar, or full bathroom – $50,000 isn’t going to go very far with today’s cost of building materials and labor.

Additional coverage for “Other Structures” (also known as Coverage B) is typically available to add to homeowners policies. If not, sometimes standalone coverage called Detached Structure Insurance can be purchased. You should also keep in mind that if you store property for “business use” in your Other Structure (e.g. tools, inventory, shipping materials, etc.), it likely would not be covered on your personal policies if you had a loss.

Detached garages and other structures often have more coverage needs than their owners have considered. Contact Brandon Patterson at 865.453.1414 or email brandon@ownbyinsurance.com and he’ll be happy to discuss your property and provide you info on the coverage you need.

Insuring Motorcycles is About More than Just Two Wheels

Posted on by Ownby-Client-Login

There are over 8 million motorcycles registered in the U.S., and many of those are considered more than just a mode of transportation by their owners – they’re a lifestyle. But motorcycles also inherently have some greater risks than other vehicles, and they’re not all safety based. Let’s take a look at some of the issues to consider when considering motorcycle insurance.

Most states, including Tennessee, have minimum limits for motorcycle insurance coverage. In Tennessee, those limits are:

  • $25,000 for per-person bodily injury liability limits
  • $50,000 for per-accident bodily injury liability
  • $15,000 for property damage liability (increasing to $25,000 on 1/1/23)

With that in mind, you have a starting point for your coverage needs. But if your motorcycle is your “baby”, there are more factors to consider:

Replacement Cost – Some policies will not cover your bike’s repairs to pre-accident conditions, and/or may depreciate the parts’ value. Those with custom parts may be especially affected by this.

Total Loss Replacement – Not all policies will provide coverage to replace your bike with equal value in the case of a total loss. This coverage can make a huge difference in a “totaled” claim scenario.

Personal Contents – Are you a road warrior with valuable possessions traveling with you? Not all policies provide the coverage you may need if these items are damaged or stolen.

Medical Liability – Above minimum limits, covering medical payments for larger recovery or treatment costs are definitely something to consider. Some policies even offer a “death benefit” should the worst-case scenario occur.

Agreed Value – Got a custom or vintage motorcycle? You may be better off with a policy that determines an agreed value with you for the bike if there’s a covered loss.

As you can see, motorcycle insurance isn’t as simple as it may seem. Contact Brandon Patterson at 865.453.1414 or email brandon@ownbyinsurance.com and he’ll be happy to provide you info on the coverage you need before you ride.

Surety Bonds May Be More Complex Than You Realize

Posted on by Ownby-Client-Login

On the surface, Surety Bonds seem pretty straightforward. They are a guarantee that you can be held liable for your debt, default, or failure to perform. But there is more to them than that, and there are some very specific types of surety bonds that apply to specific situations and circumstances. Let’s take a look at some of these differences.

One of the first things to know about surety bonds is that they are three-party contracts. The Surety is the party that guarantees performance of the Principal – the party that has the obligation. The Obligee is the third party for whom the obligation is being guaranteed. For example, an insurance company issuing the Bond would the Surety party, the contractor doing the job would be the Principal party, and the client would be the Obligee party. In this example, there are different Surety Bonds that may come into play. In construction, these are called Contract Surety Bonds, and there are 4 of them:

  • Bid Bonds: Ensures the signing of an awarded contract and/or the providing of the required performance and payment bonds needed as a result of an awarded contract.
  • Performance Bonds: Ensures the performance of a contracted job.
  • Payment Bonds: Ensures the payment of suppliers and subcontractors for work done and materials provided.
  • Warranty (or Maintenance) Bonds: Ensures that any issues related to workmanship and material defects found in the original construction will be repaired (while under warranty).

When must these be provided? Privately contracted jobs often have their own requirements, and city and state governments have laws and regulations for these requirements. For Federal jobs, any contract valued at $150,000 or more requires Surety Bonds.

Commercial Surety Bonds are another set of bonds that are typically required as a result of Federal, state, and local governments. These bonds are required of individuals and businesses in certain scenarios related to their performance of a job or role. They include:

  • License and Permit Bonds: These bonds relate to licenses and/or permits for various professions, including mortgage brokers, auto dealers, and others.
  • Fiduciary (or Probate) Bonds: These bonds are required for individuals or parties that administer Trusts under court supervision.
  • Court (or Judicial) Bonds: These bonds relate to plaintiffs or defendants in judicial proceedings and reserve the rights of the opposing litigant(s).
  • Public Official Bonds: These bonds relate to public office holders, and ensure that they will perform their sworn duties.
  • Miscellaneous Bonds: There are a wide variety of less common bonds that would not fit into the above categories. These include Fuel Tax Bonds, Warehouse Bonds, and many others.

As you can see, there is more than meets the eye with Surety Bonds. How can we help you find the right bond for your needs and requirements? Contact Brandon Patterson at 865.453.1414 or email brandon@ownbyinsurance.com and he’ll be happy to help.

You Need Boutique Insurance for Your Boutique Business

Posted on by Ownby-Client-Login

It is estimated that there are over 150,000 clothing boutiques in the U.S.1, and that numbered has remained steady since an initial surge of closures in the early stages of the COVID pandemic. However, many in the industry feel there will be a wave of openings in the Summer of 2022. Whether you or a new or established boutique, and whether you have a storefront or operate online only – there are risks that you need to be aware of and protecting your business against.

Most boutiques owners understand the main risks of their business, protecting their inventory and their income. If they own or rent a physical space, they know there is risk involved there that must be insured. But what about the additional concerns that may not be as apparent? Let’s look at some of those and how they might impact your boutique.

Cyber Liability – Whether your shop is online, physical, or both, there are definite risks for cybersecurity. Processing credit card data, storing customer names and info, and frequent correspondence online open a potentially large window for issues. It’s also likely you’ve seen boutiques with large notebooks where customers have written down their name, email, and maybe even date of birth. All of this data needs to be protected, but you also need a plan in place in case an incident occurs. Part of that pan for response should include cyber liability insurance. Without it, the costs of response could put you out of business for good.

Workers’ Compensation – If you have employees, chances are that they are frequently performing physical activities. Lifting boxes, moving stacks of clothes, and other daily tasks can potentially lead to injuries. Should an injury occur during the course of work, you’ll want to have that employee – and your business – protected. Workers’ comp policies are designed to respond when these injuries take place.

Commercial Auto – Do you or your employees make deliveries, and/or take boxes for shipping? Are there inventory pickups or supply runs as part of the job? If so, consider that your personal auto policy may not provide the coverage you need if an accident occurs during these work-related trips.

Inventory – If your boutique is run from your home, is your inventory properly covered? If it is run from a storefront, do you have enough coverage for peak months or special shipments? Keep in mind the actual coverage and limits in your policy may not be enough for a worst-case scenario of property loss.

Do you have the right coverage in place for your boutique? We can help you walk through the policies you have or discuss new options. Contact Brandon Patterson at 865.453.1414 or brandon@ownbyinsurance.com for more information.

1-According to IBIS World

Don’t Let Lack of Insurance Put the “Pest” in Pest Control

Posted on by Ownby-Client-Login

Your pest control company may have plenty of risks that seem obvious. If you have employees, they have risks in the course of their duties, and workers’ compensation is a clear answer for how to cover some of those risks. If you have vehicles, you could certainly put together that you need commercial auto insurance. But what about the risks that may not be as obvious? Let’s look at a few that could be a major pest for your company.

Job Site Pollution
Your team probably works with a lot of chemicals as part of your services. These chemicals need to be carefully managed and controlled, especially on the job site when they’re in use. If an incident occurs and the chemicals spill, get oversprayed, applied in the wrong area(s), etc. – your company may be held liable for any damages and clean-up. Since there are regulations about the clean-up process, the total cost can add up quickly. Will your insurance policy respond? Not unless you have the right coverages in place.

In Transport Pollution
In addition to the job site, your company also faces risk when transporting chemicals to their intended location. If your vehicle is in an accident, has a container that is not properly secured, or has a similar issue that results in the spilling or loss of hazardous chemicals, you may be held liable. Again, without the right insurance policy in place, the costs for control and clean-up may fall completely on you.

Termite Treatment and Inspection
If your company is used for inspecting for termites, a situation might arise where an employee misses active termites. If you treat for termites, you may have a scenario where the treatment is not effective or complete. If one of these issues occurs, it’s possible that your company will be held liable. Without the right insurance policy, your general liability coverage may not respond in these cases – or if it does – the limits may be too low to adequately cover your expense.

Tools & Equipment
In addition to your company’s tools and equipment, some of your jobs may require items that are borrowed, rented, or leased. If these items are damaged or stolen, will they be covered? They may not be unless your policy extends coverage for them.

As you can see from the examples above, pest control insurance is best suited for policies that are tailored for your company’s risks. We can help you discuss a program that best fits your coverage needs. Contact Brandon Patterson at 865.453.1414 or  brandon@ownbyinsurance.com for more information.

Are You Protected as an HOA Board Member?

Posted on by Ownby-Client-Login

In our previous article on this subject, we discussed the concerns homeowners face as they share risk in a Homeowners’ Association (HOA). In this article, we’ll take a look at the concerns that those on the Board of an HOA should have as they consider their own liability.

Professional Liability – Making decisions for a group can result in unforeseen liability. As an elected or appointed HOA board member, you are taking on the burden of determining some of actions for your community. If one of those decisions has a negative result, you may potentially be included in litigation.  If so, who will defend you, and who will potentially help you with any resulting financial liability? These answers will typically be addressed in the articles, rules, and/or bylaws that govern the association. This can help indemnify HOA board members. In order to provide this indemnification, the association’s assets and/or a Directors & Officers (D&O) insurance policy should be in place as financial protection.

A D&O policy typically protects the HOA board members if a legal challenge arising from their decisions or actions in a board capacity. Some areas this may come into play include:

  • Rules created by the Board
  • Election disputes
  • Actions taken by the Board such as evictions
  • Demands for allocation of HOA resources
  • Decisions on service providers and/or service offerings

There are often endorsements for D&O that may be included on package policies for an HOA. However, these may be insufficient when considering all the potential liabilities. A standalone D&O policy is often a more complete solution for protection, as it often addresses more coverage areas and may provide higher limits.

When making the decision to cover your HOA board with a D&O policy, talk with an insurance agent who has the experience and market options to adequately address your group’s needs. If you need a place to start, please reach out to Brandon Patterson at 865.453.1414 or brandon@ownbyinsurance.com for more information.

Understanding Replacement Cost on Property Insurance Policies

Posted on by Ownby-Client-Login

Unfortunately, many people in our community were again impacted by wildfires in the recent weeks. While not everyone’s property was damaged, it has many people thinking about their insurance should a claim occur. We’ve had many calls from our insureds who wanted to have a better understanding about “Replacement Costs” and what is – or isn’t – included on their current policies. Let’s take a look at what replacement cost, extended replacement cost and guaranteed replacement cost really mean for insureds.

Replacement Cost
If you have damage or possibly even a total loss of your home, vacation home, cabin rental property, etc., you’ll face costs to rebuild. If your insurance policy pays for these claims based on “Actual Cash Value” then there will be a deduction for depreciation of value in the amount paid to you. Replacement Cost will pay to replace the items you lost to a covered peril (what caused the claim) at a similar quality up to the stated policy limit. So, if it is personal property like a TV, a similar model or quality would be paid for to replace it. If it is the structure itself, similar building materials would be covered up to the stated policy limit.

Extended Replacement Cost
With incidents that or more widespread – like wildfires – the cost of replacing items can be higher than normal. It may also be difficult to find materials, labor, etc. – resulting in increased costs that are out of your control. Extended Replacement Cost can be added to most policies to give you additional coverage for the dwelling structure. Typically, this can be added in increments of 10% to 25% (and in some cases as much as 100%) of the “Coverage A” limit on your policy. This can give you a “cushion” in case you face a loss that results in the rebuild costing more than the dwelling limit of the policy.

Guaranteed Replacement Cost
Guaranteed is obviously the word to focus on here. If you have Guaranteed Replacement Cost on your policy, the insurance company is agreeing to pay the actual costs to rebuild your property back to its original condition. This is obviously a more expensive option, and not all insurers offer it. However, if available for your property, this would be the way to ensure that you can completely rebuild after a loss with the quality and materials of the original structure no matter the external circumstances impacting those costs.

As you can imagine, there are caveats to these coverages including availability, costs, and policy language. We’d love to help you walk through your current policy or discuss options for a new one. Please contact us at info@ownbyinsurance.com or 865.453.1414 for more information.

Professional Offices – Your Exposures May Surprise You

Posted on by Ownby-Client-Login

If you own and/or operate a professional office that offers services like accounting, chiropractic work, dental labwork, etc., you may think that your exposure to claims is more limited than a workplace with frequent physical labor. But in reality, your insurable exposures are just different. Sure, having Businessowners Policy seems obvious, but here are a few coverages you may not realize could impact your business setting.

Professional Liability
Also known as Errors & Omissions (E&O) coverage, this insurance could help protect your business in case you are sued for a professional mistake. For example, if a medical lab makes a mistake in labeling test results and a physician’s office or patient sues as a result. Or, if an accountant gives “poor” financial advice that leads to client litigation. With proper E&O coverage in place, you may have financial protection from legal actions and financial losses that can occur when a client sues your company.

Workers’ Compensation
Accidents can happen, even in professional office settings. Maybe your staff is using lab equipment, moving file boxes, or helping a client with an injured back – one slip can cause a major medical issue. With lost wages and medical care, those issues can add up quickly. In some cases, legal expenses or even third-party lawsuits may be involved in these claims, and having the right coverage is critical.

Employment Practices Liability
In today’s world, how you operate your business is under a lot of scrutiny. If you find yourself in an instance where wrongful termination, discrimination, harassment, contract breach, or other employee lawsuits occur, you may wish you had coverage to help with legal fees, settlements, and/or judgements. If you have properly configured your risk management with Employment Practices Liability Insurance (EPL), you may have that assistance.

Cyber
In professional offices of all kinds, data is a key piece of your day-to-day world. You likely protect that data with IT precautions and staff training. But even with measures in place, breaches, viruses, and ransomware can still infiltrate your systems. In addition to the potential data corruption, breach, or access restriction, you likely will have costs to notify your clients. Much of this could fall under coverage provided by a Cyber Insurance Policy. And although some cyber protection my be included in your other business insurance policies, often a standalone policy is best for this coverage.

With these exposures and coverages in mind, how confident do you feel with your current policies? Get in touch with us today to review what you have in place and discuss the options you have for your business. Please contact Brandon Patterson at brandon@ownbyinsurance.com or call 865.453.1414 to get started.

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.