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Tag: Risk Management

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

Posted on by Jon Blankenship

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.

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 is Business Income Coverage and When Do You Need It?

Posted on by Ownby Insurance Service

If you own, operate, or manage a business, you know how important it is to track revenue and financials. But what if that revenue stopped coming in due to a fire? What if a major theft prevented you from being able to pay your bills and payroll? Having business income (also known as business interruption) coverage in place may help lift the financial burden. But it’s very important to understand when and how it can be used.

Business Income Coverage Examples

Let’s take for example, Christina owns an independent bookstore and also owns the building where the store is located. A fire damages part of the store, and in the process of putting out the fire, her inventory is destroyed by smoke and water damage. It’s going to be several months before the property can be cleaned and repaired for patrons to safely enter, and new inventory must also be ordered and stocked.

The property policy on the business covers much of the physical damage, and there is also some coverage for inventory. However, Christina knows she’ll have trouble paying her employees and her bills without any revenue being generated. So, what does she need to know if she has business income coverage in place?

  1. What is the actual loss sustained? Christina will need to know the total of her covered losses and how much was covered by other insurance policies.
  2. What is the amount of income lost? Christina will need to be able to provide information on the amount of revenue she would have generated had the store been open as normal.
  3. What is the “waiting period” of the policy? Most business income coverage will have an amount of time that must pass before the coverage can take effect.
  4. What is the “period of restoration”? How much time will the policy cover while the business is closed?

These crucial factors will help determine when, how much, and for how long Christina can expect the policy will pay.

Named Perils

These policies typically have named perils as well. So, while a fire, theft, wind, etc. may be covered, you’d have to check your policy to see if a service line being damaged would be covered. In addition, civil authority may be covered as an interruption after a natural disaster. As an example, if a sinkhole damaged the only road leading to your business and the government ordered closure as a result, you might be covered for business income.

Understand Your Business Income Coverage

However, and as with any policies, it is extremely important to understand your coverage and limits. Don’t assume you’d be covered for certain situations, talk with your agent and get an understanding of what would trigger this coverage, for how much, and for how long.

To learn more about it, contact Brandon from our team at brandon@ownbyinsurance.com or 865-453-1414 today.

The Vacation and Cabin Rental Excess & Surplus Insurance Market

Posted on by Ownby Insurance Service

The property insurance marketplace remains in what is called a “hard market” as we progress through 2024. Factors including cost of materials, catastrophe losses, supply chain interruptions, and increased time and cost of labor have resulted in insurance companies reducing the amount of risks they want cover, restricting locations, and raising premiums.

These impacts are often higher in the areas that are popular for vacation and cabin rentals. For example, beach rentals are higher to insure due to coastal risks, and mountain rentals are often harder to insure due to wildfire risks. But there are still options for coverage and an independent agent can provide you with information on your choices, as they are not tied to a single insurance company like a direct writing insurance agent may be.

That being said, these options may have intricacies you are not aware of, as all insurance companies are not the same, nor or they regulated the same.

The Excess & Surplus Market

With fewer insurance companies willing to cover the risks of vacation and cabin rentals, some are turning to the Excess & Surplus (E&S) insurance market for coverage. These companies typically offer non-admitted insurance policies, which means they do not fall under the state regulations and have not been “approved” by the Department of Insurance. However, they are still reviewed by regulators, and the companies themselves may often have the same financial ratings and reviews as other companies on a national or regional level.

The positives of these options are the flexibility of the policies and rates. They can move quickly to adjust what they offer and respond to volatile markets like what we’re seeing now. They may have lower rates than competing programs, but it is important to understand if coverage differences are responsible for those rates.

The concern of these options is they are not subject to the states’ Guaranty Fund protections. This means, if the insurance company were to become insolvent, there would not be state government protection to pay claims from a fund that has already been established.

There are, however, ways to determine how great of a concern this should be for you. The financial ratings and reviews we mentioned can be reviewed by the public. Organizations like Fitch, AM Best, and/or Demotech may have reviewed the companies’ financial data and provided reports of their current standing and future outlook. These reports are fairly standardized and straightforward, often assigning letter grades like “A” to resulting reports.

So, is an E&S market the best option for your risk? In Tennessee, you may need as meaning as three admitted companies to decline your risk before you are eligible to access the E&S market. But in the current marketplace, that may not be much of an impediment. The key is to understand what is available to you, and what differences are in the policies you’re considering.

Our agents can help you do just that! We’ve been helping insure cabins and vacation rentals for many years, and we’re here to help you understand your risks and options. Contact Brandon Patterson to get started today – brandon@ownbyinsurance.com or 865.453.1414.

Steps for Better Personal Risk Management

Posted on by Ownby Insurance Service

You could probably guess that companies need to take steps to reduce their risks, including safety programs, cybersecurity, and more. But should you be taking risk management steps for yourself? Do you have ways you can lower your own risks and potentially reduce the chances you have a loss or an insurance claim? The answer to both these questions is “yes” of course!

Driving Risks

Over 36,000 automobile accidents occur every day1 in the U.S. Many of these accidents are caused by distracted driving. One of the simplest steps you can take for better personal risk management is to avoid using your devices while driving. And while texting may be the most obvious, many people are using their phones for searches, looking up directions, or even watching videos! Avoid these while you aren’t parked in your vehicle whenever possible.

In addition, keeping your car in good working order is also a way to reduce your risk. Keep your tires properly inflated, have brakes and safety mechanisms checked, change windshield wiper blades as needed, and keep up regular maintenance to prevent mechanical issues that could cause an accident.

Cyber Risks

The average American accesses the internet for around seven hours of their day!2 Much of that may be for work, but many Americans also work from home. If you’re using your personal devices, take steps to protect your data:

  1. Protect your passwords and create stronger passwords whenever possible.
  2. Use multifactor authentication when it is an option for logins.
  3. Avoid using “open” or unsecured internet network connections.
  4. Be careful visiting websites and especially entering data on sites that do not have SSL encryption (https://).

Liability Risks

Lawsuits are on the rise in our country, and larger verdicts and judgments are more common. You can protect your own liability at home by taking steps that include:

  1. Fence in your yard, especially if you have a trampoline, pool, treehouse, etc.
  2. Avoid “overserving” alcohol to adults at your home – even friends and neighbors.
  3. Monitor and control your dog and/or other pets, even if they haven’t been known to bite.
  4. Talk with your family about being careful in their interactions with others, and the importance of safety.

These are just a few of the examples of ways you can be safer and also lower your risks. But accidents can still happen, and you need to have the right coverages in place in case they do. Contact Brandon Patterson from our team to better understand what those coverage options may be for you – brandon@ownbyinsurance.com or 865.453.1414.

1-per Progressive Insurance data

2-per Forbes data

Covering Your Trailer and the Objects You’re Hauling

Posted on by Ownby Insurance Service

As the weather warms up, more and more people are getting outdoors to enjoy nature. Maybe it’s boating on the water, taking an ATV off road, setting up camp in the woods, or getting projects done outside. And one thing all these might have in common is that trailers may be involved to move the items to their intended destinations. As you’re hauling, you may be wondering – am I covered? Let’s review some of the circumstances.

Covered by Your Auto Policy?

In most cases, the coverage of your trailer – while in use for hauling – will fall under the policy of the auto hauling it. But keep in mind that if you have liability only coverage for your auto, the same would apply for your trailer. In addition, the contents you are hauling on your trailer are not typically covered in these policies.

Boat Trailers

If you have a specific trailer for your boat or other watercraft, you may be able to purchase coverage under your boat insurance policy. However, unless you have designated the trailer as “dual purpose” on your policy, you are unlikely to be covered if you haul something on the trailer other than your watercraft.

Camper Trailers

Because of their different risks, you will likely need a separate policy to cover any kind of pop-up or camper trailer. In addition, the value of a campers “contents” alone would likely make it a wise decision to have specific coverage in place for them.

Other Coverages

Trailer-specific coverages, personal umbrella policies, and additions or endorsements to other policies may be available to cover your trailer and its contents.

In Tennessee, there is not a requirement for registration or insurance if you have a boat, farm, utility, or pop-up trailer. Other trailers do have registration laws in Tennessee, and since insurance for the auto hauling the trailer is required, there are still some approximate rules for coverage in the state no matter what you’re hauling with your trailer.

Contact Brandon Patterson from our team at brandon@ownbyinsurance.com or 865.453.1414 to discuss your trailer risks and options for coverage.

Risk Management and Your Team’s Role in Lowering Risk

Posted on by Ownby Insurance Service

Risk Management and Your Team’s Role in Lowering Risk

Workers’ compensation rates have been steadily dropping for the last decade in Tennessee and other states. And while factors like market competition and legal system improvements are factors, one of the biggest impacts has come from a reduction in claims frequency and claims severity. How has this been achieved? Safety and risk management programs. When better procedures are in place to protect employees, fewer accidents – or less damaging accidents – occur. So, could this be applied elsewhere to lower your businesses risks?

Preparing Your Team for Success

Onboarding, training, screening, and testing of employees and potential hires can help you lower risk. And this isn’t just for jobs with physical risks. Training your employees on cyber risks, onboarding them for customer interaction, screening them for past loss history, and intermittently testing them on what they’ve learned can all help with your risk management. Let’s review some examples of how this approach can be impactful.

Cyber Liability Prevention

Most businesses store customer data or personal info in some fashion. Whether it be loyalty info like names and birthdays or financial info like credit cards stored for recurring payments, this data is sensitive and must be protected. If you train and test your employees on avoiding cyber risks like phishing, hacking, and human error, you’ll be helping lower your cyber risk.

Third Party Liability Prevention

How does your team interact with customers? If there is a physical location that customers visit for goods, services, or transactions, is it well-maintained? Does your team know to clean up spills, report malfunctioning equipment, or notify management of unsafe conditions? Quickly acting on these concerns not only makes for a better customer experience, it may also reduce your risk.

Property Damage Prevention

If you work on or interact with customer property, having your employees properly trained is critical. Whether it be a $20,000 car or a $1,000,000 piece of equipment, the work your employees do shouldn’t put position you for a claim. And while accidents happen, the better the training, the less likely they are to occur.

Good risk management leads to better options for your insurance, especially as your business’s loss history continues to be good or improves from prior claims. Contact Brandon Patterson at 865.453.1414 or email brandon@ownbyinsurance.com to discuss how it could help your business.