Cable Installers Liability Needs

Cable Installers, are you an employee or a 1099 contractor? (Or “The elephant hiding in the closet”)

There is a vast movement afoot in the cable and satellite installation industry to have cable installers become a 1099 contractor rather than an employee of the cable company. See “Consider the Cable Guy”: The Grind Investigation Fund. Many major cable companies are requiring their employees to make this change involuntarily. Why you might wonder?

Well, this is a very effective cost cutting measure for the cable companies. They need people to install the systems, wiring and equipment that operate and control the media service they are selling. This job cannot be performed without a human at this point in time. However, if cable companies utilize a fleet of 1099 contractor’s as cable installers instead of employees:

It reduces the employer’s costs considerably as the employer no longer collects or pays FICA or federal and state income tax on the cable installers.
Cable companies does not pay employer taxes in to the government.
Cable companies often charge the 1099 contractor cable installers for such things as uniforms, tools, equipment and use of a truck. Conversely, as an employee, the installer would most likely have received those items at no cost from the employer. These measures both reduce the cost and bring in revenue from the contractor.
A Cable companies also save vast amounts of money on reduced insurance payments as the burden of carrying certain types of commercial insurance switches to the 1099 contractor. This reduces the number of employees and conversely reduces the premium cost for the employer as well.

So, if a cable installer begins working as a 1099 contractor they really are functioning as any small business owner would. The installer will need all the types of insurance that any company in the cable installation business should carry including general liability, errors and omissions, business property, inland marine, commercial auto (if you are furnishing the vehicle), commercial property and loss of business income and perhaps an umbrella policy or a technology policy. As a 1099 contractor, you can obtain these as part of a business owner’s package or as standalone policies.

You should speak with your agent to gain knowledge about the best options for cable installers within the Class Codes your business comes under listed below:

Business Liability Category: TV and Media Installation

SIC Business Insurance Codes:

4841- Cable and Other Pay TV Services

NAICS Liability Classifications:

517110- Wired Telecommunications Carriers
• 515210- Cable and Other Subscription Programming

Business ISO General Liability:

Code: 91315- Cable and Subscription TV Companies

Common Workers Compensation Class Codes:

7536- Cable Installation and Construction
8901- Cable and Telecommunications- Office Employee
7600- Cable TV or Satellite- Other Employees and Drivers
6325- Conduit Construction- For Cables or Wires
8742- Outside Sales Persons
Code: 91315- Cable and Subscription TV Companies
Code: 91315- Cable and Subscription TV Companies

Plus, as a 1099 you will need health insurance which covers your own health needs. This means obtaining health insurance which is most likely not part of a group plan in most cases. Individual health insurance is usually very expensive no matter who the insurance carrier may be. An alternative is to join a union or an association of workers in this field that offers health insurance to its members thus forming a group (E.g. Communication Workers of America).

But the biggest concern related to insurance is Workers Compensation.

Since you no longer are an employee, just as you are no longer covered by the Cable Company’s group health plan, you are no longer entitled to worker’s compensation through your client the Cable Company. That means even if you get hurt on the job while installing for the cable company at a property you were sent to by the cable company you are not covered by Workers Compensation. (There is that elephant hiding in the closet with a not so great surprise!)

Whether your required to carry Worker’s Compensation insurance for yourself (as a single employee) is another question altogether and depends on many things. Some states require that a single employee company carry workers compensation while other states do not. In some states you are exempt if you have less than 4 employees. Some states exempt members of an LLC. Whether it is required by the state should not be the end of the inquiry because if you don’t cover yourself for Workers Compensation, no one else is, and you may be definitely letting the elephant loose to trample you if you are injured severely on the job. Additionally, your old employer (the cable company) who is your “client” who sends you out to cable company users homes to do installations can and often does require that you carry workers’ compensation and that you make the cable company an additional insured on your policy when you go out to install systems for their customers.

You may think you are covered by your own health insurance that you just bought, however; many times your health insurance carrier will deny coverage if you were injured on the “job” and if you don’t have workers compensation the injury is not covered at all unless a third party or the cable company was negligent.

This can be quite a tragedy if you are injured and have not obtained the insurance needed to protect you. The Bureau of Labor Statistics shows that 3 million workers were injured on the job in 2014. So if you find yourself in the position of a new 1099 contractor make obtaining commercial insurance one of your top priorities.

Insurance needs for Drones in the workplace.

Thinking of Using Drones to Perform Home Inspections? What insurance options do you have?

Most home inspectors are familiar with and carry General Liability, Commercial Property and E&O or Professional Liability Insurance to protect their business and understand the risks they run if not protected by these critically necessary types of insurance. The American Society of Home Inspectors (ASHI) recommends these coverages at a minimum. Until recently drones may not have been used as tools at all in the home inspection field. Drones are probably not covered on your commercial general liability policy or business owner’s package. Drones are currently being used for fun hobbies such as photography; throughout different industries such as in science, surveillance, and logistics and, specifically including property surveying and home inspections. So drones are gaining popularity with business owners. The FAA now requires drone insurance to meet Section 333 exemption for a drone that is used commercially.

However, drone insurance coverage nuances are just being created for the insurance industry. International Organization for Standardization (ISO) has developed different endorsement forms for adding endorsements to Commercial General Liability, Commercial Liability, Commercial Umbrella Excess, Commercial Inland Marine, Commercial Property and Capital Assets together with business interruption exposure due to loss of use of a drone. Information about all of the ISO forms for drone and white papers on drone are available. See ISO’s Emerging Issues Portal (http://www.iso.org)

Any carrier that offers drone insurance can use these ISO endorsements by adding them to your existing coverage. However, of every carrier underwrites policies for drones due to the cost of replacement, technical differences, and various types of machines availability and standards of safety for operating and FAA requirements being undefined until very recently; and what function (s) the drone will perform.

Disputes over the ethics and morality of the use of drones as weapons may also have historically driven the carrier’s decision not to provide coverage so as not to tarnish the public image of the insurance company. However, as more and more companies use these as tools in commerce; the public‘s perception may become more favorable. If a distinction is made in ordinary language between domestic drones and weaponized combat drones more frequently, it may aid the acceptance of drones as well.

Home Inspectors obviously want coverage for a domestic drone, while a defense contractor is more likely to request coverage for weaponized drones. Some carriers include Lloyd’s of London ( a specialty carrier) Stonewall Aviation, Global Aerospace, Assurex Global and AIG. Most carriers who serve the aviation industry are very knowledgeable about drones and do offer drone insurance.

But in regard to purchasing commercial drone insurance for a home inspector, you first need to know if you are actually insuring a drone, or is it really technically something else? The terms drone, UAV and UAS are used interchangeably in general business. It behooves you to clearly identify the technical name of the equipment or tool you want coverage for in seeking drone insurance.

Drones are defined as any kind of remotely guided vehicle whether on land, sea or air with the main qualifier being unmanned. Regulations are in progress that would further define what is or is not a drone
UAV’s are defined as unmanned aerial vehicle s that are remotely controlled or guided through pre-programmed software.
UAS’s are defined as unmanned aerial systems.

There are numerous debates about which definition is technically correct. The technical name used by the maker is the most logical term to use for insurance. To be assured of coverage you want to furnish the manufactures Id or serial number similar to a motor vehicle Id no. and to update the policy if new drones are acquired. But most importantly, since you are using the drone commercially, the drone must be registered with the FAA if it weighs more than .55 lbs. and it cannot exceed more than 55 lbs. in weight. If you are not registered with the FAA you can be fined and even imprisoned. Federal Drone Registration Part 107. You must also have a FAA Commercial Remote Pilots License which became effective on 8/29/2016. Your carrier will require copies of the registration and license.

The identity of this particular tool is what is essential so that the insurance covers the repair or replacement cost of that particular item and sufficiently identifies that specific piece of equipment if damage to persons or property occurs while in use.

Next you need to define exactly what the function of the machine is and tasks you are going to be performing with the drone and equally important what liability could result from the tasks you are performing. The most important factor to a carrier boils down to what risks are assumed and what damage can be caused by the use of this tool in your business. Damage could result from crashing the drone along with injury to a person and/ or property if hit by the drone or pieces of it, in the event of an explosion or malfunction.

Home Inspectors use drones mainly to inspect roofs and chimneys because of the height, the necessary angles that need to be examined on steep roofs, and the danger of falling. The primary function of the drone for these inspections is actually aerial photography so you will need a good camera that can be remotely operated while attached or built into the drone and produce high resolution pictures. You may want a dual control model camera where a pilot mans the flying function and the inspector reviews the photos simultaneously for quality and to determine whether different shots or angles are needed. You also want to be sure the camera is covered either separately or as part of the drone insurance. In a UAS the aircraft or drone is the Platform, the Payload is the camera or sensor and the Ground Control Station is the remote pilot and the inspector, or just the inspector if he is also the pilot. You want to ensure you have coverage for all parts. Fortunately, the drone itself has a wide range of price s depending on the model you select starting at approximately $175.00and the camera may actually be the most expensive piece of equipment.

Damage to the property owner may also result if an unsafe defect on the property is not detected as part of the home inspection and later results in a loss. This type of injury is either covered by Error & Omissions or Professional Liability for the home inspector. Some insurance company such as Target Professional Programs offer Home Inspectors Insurance as a specialty insurance endorsed by ASHI that has a combined BOP package with Professional liability and Drone insurance endorsements.

Target’s General Liability insurance can limit coverage to specific types of inspections that you actually perform depending on whether they are residential, commercial, Section 8 or other types. This lowers your cost for premium. They also offer tailored optional insurance coverage, e.g. mold inspection but not termite inspection.

So if drone inspections are in your future business plans, you want to explore your insurance options thoroughly.

Insurance needs in the Food Truck Industry.

Amazing Innovations in the Food Truck Industry spark new Insurance needs

One of the most delightful culinary happenings in history is here to stay. Food trucks have made major inroads into the restaurant industry and are one of the fastest growing areas due to new innovations in this field. From sleek and savvy to cute and sassy the designs, structure, overall look and utilization of food trucks are being reborn, and taking root in America.

The widespread advances throughout the food truck industry sparked a remarkable change in the food world because of the unique melding of two types of business into one. That is a hybrid restaurant on wheels but not the stereotype ice cream truck or cold sandwiches and snacks served in a factory parking lot. The public wanted outrageously good food, with appetizing aromas and an enticing appearance served in a fun atmosphere.

Restaurant entrepreneurs responded to the public’s desires and now diverse menus with every food imaginable served from fantastic wickedly designed trucks provide adventures in dining to the public’s delight.

As more and more food trucks enter the business world and develop their own style or “brand” many other industries seek to cash in on this phenomenon by providing goods and services designed specifically for the food truck scene.

Among those wanting to collaborate with the food truck industry is the commercial insurance industry. Thus the food truck BOP insurance policy came into being because every business needs insurance which fits their specific needs. Especially a state of the art customized truck fit to feed a queen and king or better yet, you and me.

With that thought, what type of insurance does an amazingly clever entrepreneur need to keep his mobile eatery and victuals protected from peril?

While the insurance needs for a food truck are similar to the needs of a restaurant there are many differences and concerns which are not present in a brick and mortar restaurant so restaurant insurance is just one piece of the protection puzzle. Additionally you need excellent comprehensive vehicle coverage for your food truck; especially since you have lovingly crafted the ideal truck with the right atmosphere using your imagination to create a dining experience extraordinaire for your clientele.

Initially, the insurance industry did not share the vision and were really divided into two camps. Auto insurance carriers offered business add ons to policies and commercial restaurant insurers offered add ons for company vehicles, but very rarely did insurers have a specifically designed business owner’s policy for a food truck. To meet the growing desire for “specialty” policies, insurance carriers adapted and developed packages tailored for food trucks and more options became available. No matter which carrier you utilize a specialty tailored policy should include these basic elements:

A comprehensive commercial general liability insurance policy (required by law)
Commercial auto/truck policy.
Business property and equipment/inland marine
Business Loss of Income with extra Expense
Workers Compensation for your employees (Required by law)

The business liability category for Mobile Food Trucks is Eating and Drinking Places

This means your classification codes used to classify and rate coverage premiums would generally fall under:

SIC Business Insurance Codes

4812 – Eating Places

NAICS Liability Classifications

722320 Food Caterers
722310 Food Service Contractors
722330 Mobile Food Services

Business ISO General Liability:

Code 11039 – Caterers and Mobile Food Service

Additional insurance options are:

Food Spoilage/contamination
Cyber-security/data breach
Liquor Liability (If you serve beer, wine or alcohol)
Commercial Umbrella
Catering/Special Events
Employees Dishonesty

Special concerns may arise when choosing your businesses commercial automobile coverage and your businesses commercial property insurance.

Coverage for employees sent on errands for the food truck with their personal auto.
Special riders that cover the unique painting and finishes on your truck in the event of a wreck
Coverage if you have retractable awning or parts that expand the size of the vehicle. You may need extended coverage or a rider similar to a policy for an RV

Coverage for refrigeration units, both if the unit breaks or the truck itself is broken or damaged and coverage for any foods that spoil
Coverage for cooking equipment and apparatus giving special attention to whether there is any exclusion for types of cooking units or types of fuel used. A good example of this is exclusion for a propane fuel cooking system due to the spate of recent explosions.
Coverage for nearby buildings, and objects damaged by fire or explosion

(You will also want to develop a fire and safety plan with training components for employees to help with your insurance costs. You will also need a gas detector suitable to the type of cooking fuel you use.)

Coverage for lease or rental of additional commercial kitchen space
Coverage for use of your home kitchen to cook a portion of the food in ,needs to be specifically covered in your property insurance.
Coverage if you have a home office, computers or other equipment used for the business located in your residence, which should be specifically listed and included.

Another category of concern is raised by the frequent use of credit card readers which leaves your food truck vulnerable to data breach. This seems unlikely but really is not. Credit card information is eagerly stolen by criminals who want to make profit from its usage. Approximately 43% of all business in US have had data breaches.

Now that you built your dream on wheels keep on, keeping on protecting your dream by being a connoisseur of your insurance needs.

Is your Janitorial Company protected?

Sudden and Accidental Pollution Insurance: Is your janitorial company protected?

Commercial janitorial companies and residential cleaning companies face many insurance and accident risks because of the nature of their business and products used to clean, disinfect, and sanitize the premises or objects at the site, where employees are working. The products used and their residue can qualify, and usually do, as pollutants and or waste and fall under the pollution exclusions language contained in almost all Commercial General Liability policies.

It is essential to the financial survival of any cleaning company to have coverage for pollution discharge related accidents regardless of whether they are categorized as sudden and accidental or long term discharge. This distinction formerly spawned countless lawsuits and made coverage uncertain.

Since 1973, when the first Pollution Exclusion came into being the insurance industry has struggled with exactly how to deal with this issue. The first exclusion basically focused on whether the pollution discharges were sudden and accidental to determine if the occurrence was an excluded discharge, the discharge was often excluded and the insured was not covered. Court cased determining this issue did not agree on the interpretation of this clause “sudden and accidental” and as a result there was no consistency in the case law throughout the country. This void continues to exist even after 50 years of litigation.

Numerous Insurance Service Organization (ISO) endorsements have been introduced, since 1973 to try to clarify the exclusion including the absolute exclusion and the total pollution exclusion but the inconsistencies in coverage remain according to the law of the state and interpretation of that particulate state court’s ruling on the subject. The Elusive “Pollution” Definition in the CGL Policy.

Presently the pollution liability is excluded in two places, First, the insureds are usually excluded under CG 00 01 exclusion section of the Commercial General Liability policy and/or the Total Pollution Exclusion CG 21 49. This makes is abundantly clear that pollution liability is excluded under a Commercial General Liability policy.

Thus it would seem very foolhardy to rely on any type of pollution liability coverage under your Commercial General Liability policy to cover a pollution discharge of any kind; if you operate a residential or commercial janitorial operation.

The alternative is to obtain certain sure coverage with a different type of policy in addition to you Commercial General Liability policy. This can be in the form of an endorsement or an addition to you policy, or can be purchased as a stand alone policy.

Some of the alternative policies that are available are a specific contractor’s pollution liability insurance policy or a pollution liability policy which is obtainable as either long term pollution or sudden and accidental pollution. You will need to determine which type of pollution discharge insurance fits your needs.

Generally speaking sudden and accidental would apply for example in an instance where a fire occurs spontaneously due to a spillage and would be the most frequent type to occur. On the other hand if you clean out industrial kitchen waste resulting in grease and sludge accruing in a drain and causing noxious fumes to emanate or backups to occur which result in flooding. So you may need long term pollution insurance instead, or both.

There are then many questions that arise depending on which type of insurance you select.

Do you need claims made coverage or full coverage?
Is there coverage for prior acts, if so how far back will the retroactive date go and will you have extended reporting periods?
You need to investigate how high your damages could go in case of an accident to determine what aggregate limits you might need.

Pollution liability can cover:

the costs, fees and attorneys fees in case of a claim
testing, monitoring, cleaning up the polluted site
fines for noncompliance with governmental regulations
physical bodily injury
property damage, restoration and replacement
as well as bodily injury

Pollution Liability protects your business from accidents relate to the discharge, dispersal or release of:

Smoke and vapors
Soot and fumes
Acids and Alkalis
Toxic chemicals
Liquids or gasses
Waste material
Other irritant’s or contaminants

So take the opportunity to review your policy and conduct a risk analysis review with your agent, broker or carrier.

Additional Insured: Do you really have the coverage you need?

Commercial General Liability and the Additional Insured: Do you really have the coverage you need?

What are the pitfalls of being named on a General Liability insurance policy as an Additional Insured?

Naming an Additional Insured:

Many times a business is asked to name another company as an additional insured on their commercial general liability policy while they are engaged in a contractual relationship to perform work or provide a service. For instance, construction contractors and subcontractors routinely enter into this type of scenario.

If you are the company to be added as an additional insured you need to closely examine what protection you are actually deriving from this arrangement. It would be ideal to actually review the general liability insurance policy before entering into a contract. Unfortunately, it does not always work that way in the real world and the policy is often furnished after the fact.

Being named as an additional insured is a relatively simple task. Generally, the underlying contract will require the business performing work for the additional insured to name them as an additional insured on their Commercial General Liability insurance policy.

The performing company should contact his/her insurance agent or broker to have the additional insured named on their policy. This is accomplished by the carrier issuing a Certificate of Insurance, or COI, which names the recipient of the work as an insured on the policy. And voila, the additional insured has coverage.

Obtaining the needed coverage

Whether that coverage includes the work it was intended to cover, is an entirely different matter. A general COI is not sufficient to determine if the actual work to be performed under the contract is covered.

The insurance policy itself is the key to answering this question. You need to thoroughly read the policy, the exclusions and/or the ISO endorsement forms to determine:

What type or scope of work does the contract require the original named insured to perform?
Is that specific type of work covered and is it listed in the class code on the policy?
Or conversely, is it excluded specifically by an endorsement?

If the work being performed is not either specifically included or excluded you need a determination from the broker, carrier or you own counsel to determine whether the work called for in the contract is covered BEFORE any injury or damage arises.

To obtain a true picture of the coverage provided it must be clearly communicated to both the broker and the carrier what type of work the original insured is expected to perform under the contract, preferably in writing. The agent may reasonably assume the insured is continuing to engage in the same business activities as he has in the past, unless you specifically inform the agent that a new work activity or type of work is being added.

For example, you contract with a company to build a shed and shed building is excluded as the work was not performed by the named insured in the past then the exclusion is preventing coverage under the policy. www.thebalance.com/insurance exclusions/.

So the parties need to address the exclusion by having it removed and obtaining an endorsement, supplement, rider or stand-alone policy. This essentially means that you are seeking additional coverage options which will more than likely trigger an increase in premium. You will need to address who is responsible for the cost of additional coverage. Generally this is the named insured or performing company. If this was not contemplated at the time of the original contract, the terms can be negotiated and the contract may be amended by agreement between the parties. Legal advice is highly recommended is this type of situation.

This information is usually conveyed by the named insured performing the work (as an AI cannot change the policy) directly to the broker, who then obtains quotes for coverage from the original Commercial General Liability insurance carrier or a specialty insurance carrier if necessary.

From the named insured’s perspective, although the company may not want to bear the cost of purchasing additional insurance, it certainly benefits them to have the correct coverage in place in the event of a claim.

Other General Concerns:

The additional insured is not afforded the same level of protection as the named insured. Even though the business is now listed as the AI (Additional Insured) their rights are subordinate to the named insured and you may not have obtained adequate coverage amounts for the exact situation at hand.
The additional insured is never entitled to more benefits than what the original insured is under their own policy. The additional insured’s recovery cannot exceed the policy limitations, and would need to have excess coverage of its own.
The AI cannot change or cancel the policy the named insured. Only the named insured can request it.
The AI can require that they be sent a complete copy of the policy including all endorsements, riders, supplements and exclusions from the carrier or agent directly, and that a notice of any changes made be sent to the AI at their address.
The named insured has the right to object to furnishing the entire policy to the AI. The alternative is to ask for a copy of the additional insured’s COI and endorsement which specifies the contract work that is being covered rather than a general COI which does not contain this information.

Additionally, in the event of a claim on the policy, the insurance carrier has a general duty to defend the AI in case of a lawsuit, but this obligation is intensely fact specific and varies widely according to the legal jurisdiction and venue and the contractual terms of the insurance policy.

So, while it may be easy to obtain a Certificate of Insurance as an additional insured it takes a lot of attention to detail to determine if you really have the full coverage you intended to obtain.

Retiring from Medical Practice Soon?

Risky business if you don’t have “tail insurance.”

Doctors are aging out of the medical field along with the rest of the baby boomer generation. In 2014, one out of every four doctors was over 60. HTTP://www.centerforhealthjournalism.org/2014/03/10 While it sounds wonderful to be able to retire and not have to worry about all the complexities of operating a medical practice, there are insurance risks you must address before exiting the workplace.

Chances are high that you might not have considered retirement at the time you entered into practice and selected your insurance coverage options some thirty plus years ago.

Most doctors are keenly aware of the necessity for professional liability insurance a/k/a medical malpractice insurance while in active practice but they may not be as knowledgeable about their options upon retirement or becoming disabled and leaving the practice of medicine altogether. One might think General liability insurance will suffice after retirement, which is not correct. General liability insurance does not cover any part of medical malpractice.

So, what is the most important type of insurance you need to address upon retirement?

The primary insurance needed for retiring Doctors is Tail Insurance.

General Liability Class Codes Professional Liability Tail Insurance

In the past, tail coverage was an extended reporting period endorsement, offered by a physician’s current malpractice insurance carrier. Simply put, this insurance is basically a continuation of your medical malpractice insurance upon leaving employment, reaching retirement, or becoming disabled. Retirement situations are the focus herein so we are narrowing the endorsement terminology to a non-practicing extended reporting period endorsement. Some insurance carriers historically provided free tail coverage upon retirement if the Doctor had 5 previous years of existing coverage with their company; or you could purchase a policy through your existing carrier only. The same factors generally applied if you become disabled.

Tail insurance differs from medical malpractice which only provides coverage for the period of time the policy was in effect and is a Claims Made policy. Tail coverage is for prior acts which occurred during the time http://www.irmi.com/claimsmade the original malpractice policy was in effect, but a claim is not filed until after the cancellation of the original policy. So it covers acts of negligence which occurred while in practice, but the claim is made after the physician retires. This assumes that the Doctor had an active malpractice policy in place before retirement that covered claims within the original policy dates.

The insurance industry has evolved dramatically in this area and now offers alternatives to obtaining tail coverage either directly from your former professional liability insurance carrier or a different carrier of your choosing through the use of a Stand Alone Tail Policy.

So what do you need to do to ensure you’re protected in your golden years?

First, you want to examine any agreement or contract that you entered into as part of your practice, or with any hospital where you were on staff, which addresses what type of insurance, if any you are required to carry upon retirement or leaving the hospital staff, the aggregate limits requirement in the contract and the cost of the premiums. You also should see a clause in the agreement which identifies whether you are required to pay the cost directly or the group is required to continue the payment, if applicable.

Then you want to look at your existing individual malpractice insurance or group malpractice policy to see if it has a provision for the free endorsement after retirement, and when it would become effective which is generally after 5 years of coverage.

Once you know if you have to provide the cost of the tail insurance and what the policy limits need to be you can go forward and decide whether continuing with your present carrier is your best option.

If you are a sole practitioner then the decision making is a little easier. You will still need to determine your contractual obligations with any hospital you are on staff with. If you don’t have tail insurance you need to obtain it before retiring. If your original malpractice expires you will have a gap in coverage. Contact your current malpractice carrier and see if they provide a free endorsement and determine what the applicable date is that the free endorsement would become effective. If you are not eligible for a free endorsement with your present carrier, determine whether coverage is available through your carrier and what your options are as to cost and amount of coverage.

If the price is exorbitant, which it may be, you can comparison shop different insurance companies for a stand-alone tail policy. This type of policy can cover different lengths of time for the extension period ranging from 1 year to indefinite. Since medical malpractice claims may be filed many years later it is a prudent idea to consult an attorney to determine the statute of limitations in the area where you practiced. An Indefinite extension would be the optimal time length as you would be covered if a claim is ever filed, but that option may not be affordable. Some insurance carriers are offering financing on this type of insurance.

An independent insurance agency or broker is able to shop numerous carriers and find the perfect fit at the right price for you. So don’t end up holding a tiger by the tail. Take action to protect your assets.

Cyber Security, Data Breach and/or General Commercial Liability;

Can business owners safely terminate their cyber security/ data breach insurance relying on General Liability coverage as a safe harbor?

Cyber Security

On July 27, 2016 the U.S. Federal Court of Appeals for the Fourth Circuit held in Traveler’s Indemnity Company of America vs. Portal Health Care Solutions that a Commercial General Liability (CGL) does cover a data breach and the insurance company has a duty to defend the insured business on the class action claim filed against it.

This decision might lead businesses to believe that they do not need Cyber Security or Data Breach Insurance. While it may appear to be a cost saving measure now, it could result in a far greater liability in the event of a data breach claim against you.

The Portal case was filed in 2013. The decision therein hinges on the coverage under Part B of the CGL policy for Personal and Advertising Injury. Changes were made to CGL policies with exclusions and endorsements which became effective May 1, 2014 based on ISO’s suggested forms. While adherence to ISO forms is not mandatory, it is widely recognized and usually adopted. To date the ISO exclusion and endorsements on data breach are available for use in 53 states depending on the carrier’s preference. So the Portal case may not be applicable to policy claims made after that date that do not contain Part B Coverage. This point will certainly be argued in the future should similar cases be filed after the effective date without containing Part B coverage language.
The Portal Health Solutions case is a departure from the previous holdings in other state court cases holding CGL insurance does not cover data breaches creating a conflict between the states. This may result in the case being certified by the Supreme Court of the United States. However, there is an absence of conflicting rulings between two Federal Courts of Appeals which is generally a trigger for the Supreme Court to accept a case.
Each party has a right to file a Petition for Certiorari to ask the Supreme Court to review the case. In this case, only Travelers would have a reason to request review. The Supreme Court may want to hear the case because the Defendant Portable Health Solutions data consists of medical records which would fall under HIPPA privacy rules and the protection of these documents is legally mandated, so the Government would have an interest in protecting American citizen’s privacy and the members of the class action suit who were injured by the data breach.
It also raises important questions in regard to cyber security in the form of cyber hacking of data, which is a growing national threat. Cyber security is considered to be the 5th highest underwriting risk for insurance carriers according to the Swiss Re; Sonar report,May 2016.. Thus the Supreme Court has a duty and an interest in protecting the safety of America’s citizens.
Almost all businesses have some risk of data breach or a cyber security risk which impacts commerce and trade throughout the US.

Due to all the above factors, it is difficult to determine whether Traveler’s Indemnity will Petition for Certiorari, and whether the Supreme Court will accept the case. The better course of action for Travelers financially may be; to just cover the insured damages under the policy and then go on to fight another day in a case that does not have Part B coverage and the endorsements are on the newer ISO forms. However, Traveler’s may still have numerous policies outstanding with Part B coverage for personal injury and advertisement that compels them to address the question now.
Because of the ever growing risk associated with cyber security crimes, including extortion, kidnapping, and terrorism most major carriers have designed new types of insurance products to cover data breach and cyber s crimes presuming that general liability did not cover this instance based on previous court rulings. If this ruling is upheld without going to the Supreme Court it may still have far reaching impact for both the business community and the insurance industry, as it leaves the basic question unanswered regarding coverage after the inception of the new ISO endorsements.

If the public perception is that you do not need data breach / cyber security insurance this could lead to a sizable loss for the insurance industry in litigation and loss of premiums which could lead to employee layoffs in insurance companies and business closings.

Bear in mind the insurance carrier payment for a data breach policy endorsement in the Target data breach case reached $44 million dollars. Generally, CGL policies do not have this high of an aggregate limit.

If the insurance carrier has to provide this insurance under a CGL policy without endorsement there will be significant losses under those policies. Costs for General Liability insurance will rise and be passed on to the insured.

Insureds may not have adequate insurance under their CGL as the policies are not designed to offer specialized coverage suited to each company’s needs and the aggregate limits may be too low, thereby financially harming the insured, and the injured party.

The insured may still have options to purchase specific policy endorsements or supplements if the products continue to be offered. Most likely they will be as the public awareness of the threat and the demand for the products is growing.

Consequently, until there is a complete resolution of this issue, the prudent business person should, at a minimum; retain their present cyber security/ data breach insurance. High risk industries should also purchase appropriate insurance products based on a thorough risk assessment or continue their existing coverage. It would be unwise to rely solely on your commercial general liability policy for data breach and cyber security risk.

Pest Control Companies: Beware of the mosquito

What liability risks are out there and what you can do to manage them

Pest control is a vast multi-faceted and highly regulated global business offering various types of services to control pests of all types to numerous industries and the public Pest control business liability classification codes are:

Pest Control

Pest control involves eradication or abatement of all types of pests, insects and rodents but none more evasive and resilient than the mosquito. In the United States Pest control companies often provide residential pest control options for mosquitoes and other insects both to individual homeowner’s, apartment complexes and other types of residential buildings as well as temporary lodging such as resorts and hotels Municipalities, townships, counties, water districts, states, countries and community based programs also undertake the eradication of mosquitoes, especially when there is a disease outbreak. Commercial pest control companies often subcontract with these entities to perform the actual pesticide application, monitor the mosquito population, train applicators and monitor certifications and licensure of employees/applicators.

The reason so much attention is given to eliminating this one insect; is the danger to human life, along with wildlife, associated with Vector borne diseases transmitted by mosquitoes after extrinsic incubation, e.g. Malaria, Yellow fever, West Nile Virus, Chikungunya and Dengue fever. The National Resources Defense Council indicates that these diseases are increasing as the insect population grows, due to the warming of the climate, along with the shifting rain and weather patterns. As a result, Additionally, another growing threat from the mosquito is on the horizon.

As the 2016 Olympics get under way the public, the business sector, medical professionals, human health organizations, environmental and government agencies and the pest control industry are warily eyeing the event as the Journal of America Medical Association states the potential for a pandemic is explosive due to the presence of the Zika virus, which is an emerging illness borne by mosquitoes, in the Olympics host county of Brazil.

Some states in the United State have already experienced cases of Zika. Most notably there have been cases reported in 15 counties in Florida and as consequence new laws have been enacted which impose even greater regulation for pest control company applicators. Other states as well may follow suit as the disease spreads.

In this case, the infected female Aedes genus mosquito is the carrier Zika Vector Control for the Urban Pest Management Industry). This particular mosquito type is an invasive species which is already established in America and by its nature continues to expand its range. It carries Zika virus, dengue fever and a possible link to microcephaly in infants. Additionally, is has been recently confirmed that an infected human male can sexually transmit the Zika virus to a female similar to AIDS while the virus is active. Zika is also possibly linked to severe brain damage and Gullian Barre’Syndrome.

A debate now rages among the scientific community as to whether or not microcephaly is associated with the Zika virus; or its actual root cause is a larvacide (growth inhibitor) called “pyriproxyfen” used for mosquito control by targeting the larval stage while in the water source. In Brazil, it was allegedly injected into by the Brazilian Health Ministry into the drinking water tanks to combat the mosquito population. See: “Chemical Larvacide, not Zika, true cause of Brazil’s Microcephaly Outbreak.” This larvacide is approved in the US by the EPA and worldwide by WHO

Either way the pest control industry will be squarely in the middle of the debate on how to effectively reduce the mosquito population using Integrated Pest Management with Biological Based Technology and still prevent harm to humans in response to the concerns raised about this disease in the National Pest Management Association Industry wide alert issued in January, 2016. Irregardless of which cause is the culprit it will have far reaching implications for insurance coverage for the the pest control industry.

Liability claims may rise in the form of general liability, professional liability and products liability as the number of victim’s increases and public alarm rises. Additionally, many local government mosquito abatement programs are being dropped by insurance carriers at a time when they are sorely General liability covers bodily injury due to your negligence (which is a failure to exercise reasonable care). Bodily injury means injury, sickness, disease or death. It is quite conceivable that a client that acquired Zika or other vector borne diseases could bring a negligence suit against a Pest control company, who failed to provide effective mosquito control for their residence, barring another possible source of contamination, dies or is injured, or their unborn child is borne with birth defects, caused by the disease or from the products used to abate this pest.

The Supreme Court of California widened the legal playing field when it held that pesticide application may not be excluded summarily under the pollution exclusions clause of an insurance policy without a thorough analysis of the facts and can be ordinary negligence performed in the general course of doing business in John R. MacKinnon vs. Truck Insurance Exchange (2003). As a result varying coverage has evolved for pest control companies.

These coverage may have different names but can be added as a supplement or rider to most general liability and business owner’s packages or can be obtained as special risk insurance specific to the industry including but not limited to mosquito abatement, fumigation, exterminator, pollution care custody and control, Crisis management endorsement and last but not least chemical liability. With the advent of new diseases and chemical compounds to address them Pest control companies must become or remain pro active to combat the negative impact caused by just one list insect.

The key factor is to review your company’s general liability policy or business owner’s package and be sure the wording covers pesticide application and mosquito control in the ordinary course of business and to make sure that specifically named diseases and/or vector borne illnesses are not excluded; or if excluded, purchase a rider, a supplement or special risk insurance policy. Also consider raising the aggregate amount on your general liability. You also need to make sure that if you are utilizing Biology Based Technology and larvae based pesticides (even if approved by the EPA) used on or near a water sources are covered, and obtain specific coverage and products liability for those products where there is either a known or potential risk for those pesticides and chemical degradation residue even if the product is approved for use under the Federal Insecticide Fungicide and Rodenticide Act and the EPA.

Products liability is necessary if you are selling a product or dispersing it into commerce. Professional liability is necessary if you are recommending products for use as part of your business or selling them to clients separately. It would be fiscally prudent to have liability for any known or emerging vector borne disease spelled out, if obtainable; but you primarily want to make sure they are not excluded under your policy.

If it is proven, that the chemical pyriproxyfen used in larvae applications is the cause of microcephaly, rather than the Zika virus, then there is sure to be tort cases similar to those brought regarding the Thalidomide tragedy. (Disturbingly, Monsanto is either the parent company or a partner with Sumitomo which makes this chemical. Monsanto is the maker of Agent Orange, 24-D and Roundup). If you are recommending the use of larvae applications, and use or sell this particular chemical or any type of application that causes an environmental risk due to the degradation of chemicals in your pest control business it is vital that you have environmental coverage as well.

As the world population rises and various new diseases emerge and new chemical compounds and pesticides are developed to eliminate the pests and thus combat the diseases the risk increase proportionally for a pest control company. Excellent comprehensive insurance packages are your best protection.

Business Liability: Artisan Contractors

SIC Business Insurance Codes:

7342 Disinfecting and Pest Control services
2879 Pesticides and Chemicals-Not classified Elsewhere

NAICS Liability Classifications:

561710 Exterminating and Pest Control Services
325320 Pesticide and Agricultural Manufacturing

Business ISO General Liability:

Code 43860 Fumigators
Code 43470 Pest Control Services

Tree House Builders Insurance: What type of insurance do you need?

Treehouses: Where Dreams come true for the home owner if the builder can withstand the force of the wind through the trees

Treehouses have existed in many areas of the world for thousands of years. Now treehouse building in America is going through a renaissance period. Many famous people in America have had treehouses built for them, including George Lucas (both for Star Wars and personally), John Lennon and Florida Georgia Line to name but a few. This surge in interest is partially due to the popularity of movies such as Peter Pan and Swiss Family Robinson, and TV programs featuring deluxe treehouses designed to meet the homeowners desires for example “Treehouse Masters”: which is shown on Animal Planet featuring Pete Nelson. There are many other fabulous treehouse builders, as well as a proliferation of books, plans and photos of these whimsical and awe inspiring dwellings on the World Wide Web. Also home buying clientele is interested in smaller less expensive dwellings in order to have a more active lifestyle which is a need that can be met by living in a tree house.

So with the public’s fascination for these dwellings rising, if you’re in the residential construction industry you may have thought of going out on a limb and adding treehouse building to your services.

No matter what your reason is for building treehouses you need to consider two primary intertwining factors, to wit: the building process and insurance. Building a residential treehouse is basically the same process as building a home as a general contractor with a need for specialized subcontractors and tradesman. You can read more about general contractors insurance needs here.

(Building commercially rented treehouses is beyond the scope of this blog article).

First question is how to proceed. If you are building a standard residence you would start with a design plan, blue prints, plot or site plans and plans for electrical, plumbing and HVAC systems, etc. All of these plans would have to comply with building codes applicable to the specific location. Surprisingly, some states and local bodies do not address treehouses in their building codes or use nonspecific guidelines to determine if building permits are required. This leaves the contractor guessing about vital information. Checking with the local building and zoning authority is a key factor. Just making a phone call is not sufficient, Take your plans to the board and if they indicate no permit is required, you need it in writing.

There are resources to turn to as well. There are numerous articles regarding the do it yourself aspect of building a treehouse structure. There are many fabulous photos of existing tree house structures ranging from simple children’s forts to breathtaking structures. There are scores of books written by people who have built treehouses around the world as well as standard plans and custom designs. Networking with these treehouse professionals could be a valuable resource. One organization, the International Tree House Association, is seeking to provide guidance to tree house professionals and unite to support both enthusiasts and builders.

There is also a dearth of information regarding what insurance you need to protect your business from liability. Most carriers do not have prepackaged treehouse builders insurance. However, you can certainly build a BOP (Business Owner’s Policy) with your agent or broker. You will need general liability insurance required by law along with every type of coverage that a standard residential contractor would require. There is no general liability class code specifically for treehouse builders so you can generally assume your code classification would fall under a general residential contractor for general liability purposes. You will also need to list Class Codes for every task you will perform. Code Classifications 1521 and 1751 under construction, maybe applicable. Since there is no specific classification you absolutely need to articulate within the policy that your primary occupation is building tree houses and list every task you will be doing, even if it has a separate class code, to ensure no exclusions. For instance, if you are doing Tree Removal and construction site cleanup you will need to specifically list this as a task you are to perform. This may be already covered under the policy definitions as a general residential contractor. If not, you may purchase a rider as this is a separate class code (91629) under general liability.

You also need to consider that a residence that is under construction can be considered an attractive nuisance if there is an enticement factor (presumably a tree house would be far more enticing to a child than a standard house). So you need to know if your general liability covers attractive nuisance or excludes it, and whether you need a separate rider which covers liability for attractive nuisance during the ongoing construction.

You would need to ask narrower questions pertaining to each and every build job and review your insurance coverage with your agent or broker to determine if they can all be covered in one policy, or one BOP or if you need separate riders for each build on a job by job basis.

Is the structure habitable? This depends on whether you are putting in utility services and what utilities you are putting in such as electricity, water, plumbing and sewer for purposes of living either permanently or temporarily in the treehouse. If the answer is yes then it is habitable and you are presumably, acting as a residential general contractor regardless of whether you perform the service or subcontract out the installation of such services. If you are building a simple kids fort without utilities it would probably not be habitable.

The following questions would determine your need for professional liability coverage in regard to each task you might be performing.

What are the weight/ load bearing requirements to support the tree house? Are you acting as an engineer and making recommendations or have you hired an engineer to consult and sign off the certification? If you are recommending all the specs you will need professional liability for your business or your engineer will in the alternative. One engineer who does certifications for tree houses is Bill Taha, Ph.D. Precision structural Engineering Inc.
Who is designing the tree house or making recommendations? Have you hired a tree house designer or architect? If you are designing any part of the structure you need professional liability or your designer needs to carry professional liability and supply you with a certificate of insurance.
Who is selecting the tree or trees where the tree house will be located? If you are not an arborist you would be wise to hire one as of one of the most critical aspects of building a tree house is to select a healthy and hearty tree that can sustain the weight of the structure with minimal damage to the tree. If not you need professional liability for Arborist
What type of device are you using to anchor and support the treehouse? Does it’s use require products liability insurance? Did the engineer or you select the attachment device? Will you need professional liability?

What is the best coverage for a Bar or Tavern Owner?

General Liability, Commercial Crime or Assault and Battery Insurance for Bars and Taverns

Get the answers to your bar liability needs at generalliabilityclasscodes.com

The answer to the question above truly is all three types are best because they each provide different layers of protection for the Bar or Tavern Owner. Bar and Taverns are classified under the general liability class codes are used to underwrite a general liability policy for you. The class codes for bars and taverns are:

SIC Business Insurance Codes:

5183 –Bars (Beer and Alcohol)

NAICS Liability Classifications:

7244 10 Drinking Establishment with Alcohol

Business ISO General Liability:

Code 16920 – Restaurant-alcohol sales> 75% – Table service, dance floor
Code 16921 – Restaurant-alcohol sales>75%- No Table Service, but dance floor
Code 16931- Restaurant –Alcohol sales> 75% No Table service, no dance floor
Code 16940 – Restaurant –Alcohol sales> 75% Bar Service only, with dance floor
Code 16941 Restaurant – Alcohol sales> 75% – Bar Service only, no dance floor

Your agent will also want to know what type of services you provide for example; amusements such as pool tables and games, live musical performances or rides such as the mechanical bull ride made famous by the movie, “Urban Cowboy”, located at Gilley’s Bar & Grill in Texas. The purpose behind the codes determination process is to ensure that all the services your business provides are included in the scope of your coverage and you are not left with gaps in your insurance. Once your codes are properly defined your agent or broker will use them to determine what coverage is best for your business and what carrier writes that type of policy.

General Liability insurance is commonly required for all businesses by law, depending on the state you’re located in. Think of general liability as the foundation or platform you are building upon to protect your business. At this time, most insurance agents and carriers recommend combining your general liability policy with a business owner’s package designed for your specific industry with supplements, additional policies, riders and /or floaters much like building a custom home. Imagine that these insurance options are all layers of insulation you are adding to you building to protect and enhance it. It is your choice whether you want basic minimal protection or the best insulation available. This is a similar process to choosing loose fill insulation versus rigid foam board insulation.

Sometimes the above concept is not readily apparent to the company seeking insurance. It may be confusing because insurers speak their own language, using insurance terms and jargon, which some business owners may not be familiar with. The main point here is general liability does not cover every situation the bar owner may be faced with. In particular, it does not cover most crimes and usually excludes assault and battery specifically. So you need another layer of protection

Many times new coverage options come about as a result of litigation and an unmet need for certain coverage in a specific industry. This is in essence the law of supply and demand at work, and is the exact reason that separate optional policies or riders were developed to provide Assault and Battery Insurance. While on appeal in a suit filed against the bar owner of an establishment called Gigi’s for assault and battery brought by the injured patron; Gigi’s insurer, Lloyd’s of London, requested a declaratory judgment upholding the exclusionary clause in their insurance policy and to determine that Lloyd’s had no obligation to defend or indemnify the bar owner. The Court found in favor of Lloyd’s of London and upheld the exclusionary clause. Lloyds of London is one of the premier insurance carriers in the world and this case made history in the insurance realm. Unfortunately, this left bar owners in general with an undoubted gap in coverage and a significant need for insurance to address this gap. Bars and Taverns are inherently at risk for this type of occurrence on their premises, so assault and battery insurance is essential as it covers litigation associated expenses and damages to the injured victim and other patrons harmed in the incident. Assault and battery is an intentional tort not a negligent act. General liability is designed to cover negligence and accidents so the two actually work together to give you more protection.

This would lead to the next question: Then why do you need commercial crime insurance if you have assault and battery coverage? Again the answer is they each cover different types of harm. Commercial Crime does not cover assault and battery, but it generally covers the following types of matters: robbery, burglary, employee theft and dishonesty, forgery extortion, and computer fraud. There are many complexities an agent or broker needs to consider before advising a tavern owner which form of commercial crime coverage is most advisable. Some insurance agencies use the standard ISO Commercial Crime Coverage forms or other forms to determine which insuring agreement you need for your protection.

Each of the above types of insurance can be purchased as a separate policy or rider, or in a BOP specifically designed for you.