Hard Market: Increasing Insurance Costs

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Your insurance renewal offer arrives, and it’s increased this year. How frequently does this happen? Has it remained more steady or even lowered in previous years? Why would it suddenly seem to rise? This increase can be attributed to a hard market.

Characteristics of Hard and Soft Markets

The insurance environment flows between two stages, which we call “hard and soft markets.” A hard market is defined by its higher premiums, stricter underwriting criteria, less competition among insurers and so fewer policies are written. Due to a number of reasons, insurance carriers decide that they want to make it harder for you to find affordable coverage. Otherwise in a soft market, you’ll find that your premium is generally lower and it’s easier to shop around. Insurers will evaluate these same metrics and when they determine the risk isn’t so daunting, the market will soften and become easier to obtain that price you’re looking for.

What causes the market to harden?

The primary factors that lead to a hardening market are weather and social inflation. This year in particular has added a new one to the mix: Covid-19. Let’s look at a few of these more closely as to why they may be adding to your premium increase. These are all factors that an insurer considers when offering a policy premium.

  • Weather: Catastrophic weather events lead to more frequent losses. You probably already guessed this one. As we see a rise in hurricanes, hailstorms, and tornadoes, we’re going to also see more claims filed for the damage that follows. Insurance companies pay close attention to the weather patterns, and predict how this will affect the amount of money they will pay out in any given policy period.
  • Social Inflation: You may be wondering what this means exactly. Simply put, social inflation is the term given to rising insurance costs, based on how much companies pay out in lawsuits. The general attitude towards large companies has become more hostile in recent years. This is more a sense of trying to topple down “the man.” Unfortunately this attitude also extends to small businesses. In general, if a lawsuit is brought against a company, juries have been handing out higher and higher awards. This is a risk that insurers look at when they’re offering policies to businesses, even small ones.
  • Covid-19: The year 2020 notably brought to you the leading factor in this year’s hard market. Covid-19 and its related lockdown caused many businesses to close, sometimes for good. If your business was affected by this, then you are already aware of its impact. Insurers were suddenly hit with claims for business income (closure) losses.

Why does it seem so sudden?

This is largely due to you, the insured, becoming comfortable in a soft market phase. If you’re used to your insurance policy remaining the same, or even going down, over a few years you don’t worry too much about it increasing. Unfortunately, this also makes things like risk management a bit more complacent as well. Don’t worry, this kind of thinking happens to everyone.

Another thing to consider is that all policies are vastly different. What covers everything for a donut shop will not have the same protection for a landscaping company. In a soft market, you’re able to find a policy that is tailored to your business’ exact needs and within your price budget very easily. Because of this complacency that it’s so easy, once a market hardens and your specific policy increases in price, it’s suddenly harder for you to find that same coverage within the same price range.

Unfortunately the fact of the matter is that we are currently experiencing a hard market phase. If you’re seeing your insurance premiums increase this year, it’s currently not so easy to find what you need within budget. Let us help! Reach out to one of our knowledgeable insurance specialists, and we’ll help you find that perfect policy.

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How Roof Maintenance Protects Your Business

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Simple answer: it saves you money. A small roof problem can easily turn into a disaster. When it gets to the point of disaster, you usually have other problems than simply replacing the roof. This could affect your business staying open, discourage customers, and even increase your insurance premiums.

What are some major threats to your roof? 

A commercial roof’s lifespan, when properly built, should last up to 40 years. Fully replacing it before its time can be costly. Luckily this is easy to manage! For instance, regular inspections keep you aware of potential issues. If you catch a problem early, it can save a lot of money and headache before it becomes more serious. You should also be inspecting the roof before and after major weather events. Wind, rain or hail damage is unavoidable from a storm, but if you have everything up to date it will save costs on potentially bigger repairs. Here are a few things that you can look out for that will help your roof and business in the long run:

  • Mold/Moss Build-up – tends to grow out of sunlight, and if roots are left too long they can tear up the roof layers
  • Water Pooling – leads to faster deterioration and has the potential to worsen the integrity
  • Dirt & Debris – clogging the drain pipes leads to water build-up
  • Wildlife/Pest Entrance – if there is enough deterioration, wildlife can find a way in leading to sanitation issues and can hurt your business’ image

Prevention Before Disaster

Keeping these threats in mind, you can be more prepared to keep your business running. Small costs here and there to fix issues can be the difference between keeping your doors open and shutting down completely. Take a moment and think about what the worst case scenario would be. It’s shutting down your business so you can spend more money to fully replace your roof, isn’t it? We know it can seem pointless to spend money on small repairs, but it will be worth it! Just a little time and effort keeps your roof up to date. For example, it’s a great idea to take regular pictures, keep drains clean and make sure all cracks are sealed. That doesn’t seem so hard!

Who doesn’t want lower insurance premiums?

That’s right, a nicely maintained roof can even help you save on insurance. One of the first things a carrier will look at is the condition of the roof. For one thing, they see higher wear and tear as a higher risk. If your roof looks like it can blow away in the next storm, they’re not too happy about taking on that risk. However if you continue to improve the appearance and safety of your roof, this can provide discounts and lower premiums. If you’re looking for lower premiums, let us help you with a quote from one of our very knowledgeable agents. 

How have you kept up with roof repair? Leave a comment below to let us know all you’ve done to keep your business covered.

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Adapting Your Business During COVID-19

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Due to the outbreak of COVID-19 many businesses are adapting their business operations. Some are  expanding online business or reopening their store under new public safety measures. Below are some tips that may help you navigate through this unprecedented time

 

1.Safety on the Road

 

As more business are turning to delivery services, some companies have employees who normally do not drive for work start deliveries or hire new drivers to meet the increasing demand in delivery service. When making these changes it is important to check the following conditions.

-Have valid license

-Good driving record ( ticket or accident history)

-Minimum of five years driving experience

In addition to checking these factors companies can also reinforce driving safety guidelines such as prohibition of cellphone use and refraining from delivery promises that may lead to speeding.

 

 

2. Preparing Personal Protective Equipment (PPE)

In addition to the Social distancing guidelines,  prepare protective items such as gloves, hand sanitizers, face masks and shields as appropriate for your operations. Face coverings need to cover the nose and mouth to effectively prevent the spread of COVID-19. Prepare written policies that explain the use of Personal Protective Equipment and when protections such as N95 Face masks will be required.

 

3.Cleaning and Disinfecting

 

If you are planning to reopen your business and the building or store has been closed for a while, the CDC recommends cleaning and disinfecting the facility and updating policies for cleaning and maintenance. Surfaces that are touched often by many should be disinfected more frequently such as common areas, door handles, faucets and electronic devices. You can refer to the CDC website for guidance on properly cleaning and disinfecting facilities and the EPA for a list of disinfectants that can be used against COVID-19. Further safety measures such as using the appropriate protection when using the disinfectants such as gloves is also important.

 

 

4. Precautions for Curbside Pickup

Some businesses are also offering “Curbside pickup” which may lead to accidents such as slips, trips and falls. To minimize the risks, check for potential hazard areas that needs repair and until repairs are made, place signs or cones to caution employees and customers. Arranging parking areas that don’t require employees to cross the road is also an option.

 

 

5. Limiting Building Capacity and Enforcing Physical Distance

For businesses that are planning to reopen, limiting and controlling capacity in alignment with state and local public health guidance should be considered in advance. Guidelines on how both employees and visitors should maintain safe distances from each other while in the same space should be clearly notified. The Occupational Safety and Health Administration (OSHA) publication Guidance on Preparing Workplaces for COVID-19may be helpful in supporting the review and development of your protocols.

 

References

COVID-19: Adapting and Preparing Your Business for Change.  Retrieved from https://www.travelers.com/resources/business-industries/small-business/adapting-and-preparing-your-business-for-change.

Preparing Your Property for Employees, Tenants & Patrons After a Pandemic. Retrieved from https://www.travelers.com/resources/workplace-safety/preparing-your-property-for-employees-tenants-patrons-after-pandemic.

Control, Travelers Risk Control. Safeguard Your Business with a Distracted Driving Policy. Retrieved from https://www.travelers.com/resources/driver-fleet-safety/is-your-distracted-driving-policy-working.

Disinfectants for Use Against SARS-CoV-2 (COVID-19) | US EPA.  Retrieved from https://www.epa.gov/pesticide-registration/list-n-disinfectants-use-against-sars-cov-2-covid-19.

CDC. Communities, Schools, Workplaces, & Events. Retrieved from https://www.cdc.gov/coronavirus/2019-ncov/community/disinfecting-building-facility.html.

Retrieved from https://www.osha.gov/Publications/OSHA3990.pdf.

 

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Save money on Business Insurance

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Is it possible to save money on Business Insurance?

 

Yes! Following these 3 steps can help make your Business Insurance more affordable so you can save money.

  1. Compare quotes from multiple carriers
  2. Look into bundling insurance policies
  3. Actively manage risk

Compare quotes

You could contact multiple insurance companies directly to get a quote, but requires multiple applications and lot of time. An easier method is to use Kevin Lee Company’s quick, no-obligation application to get quotes from multiple reputable carriers.

We will go over coverage terms and prices to find the policy that brings most value to your business. Relying on value is important, because the cheapest is not always the best option. Consider the following items when comparing quotes:

  • Policy Exclusions – a common method carriers use to reduce premiums is to exclude coverage for various events. For example, Assault and Battery Liability Exclusion could be placed in the policy, which means you have no coverage in an assault-related lawsuit.
  • Deductibles – another common method to reduce premiums is to have high deductibles. In hail prone areas, such as Dallas, Texas, a seperate deductible may apply to Wind or Hail related claims. High deductibles means you will be responsible for more of damaged property.
  • Policy Limits – low policy limits will result in lower premiums, but it means less coverage. It is important to consider Co-insurance Clauses when considering policy limits.
  • Carrier Rating – a carrier with lower financial strength may mean more headaches when dealing with claims.

 

Multi-policy discounts by bundling

As you have probably heard already, you can save money by bundling your Home and Auto policies with the same company. Did you know many business insurance carriers also offer the same discount?

Business Owners insurance is one of the most common business policies and many carriers offer discounts on. You can bundle it with a Business Auto, Workers Compensation, or Umbrella policy and get more coverage for your dollar.

 

Actively manage risk

It should be no secret that businesses that are considered “high-risk” may end up with higher insurance premiums. Luckily, you can keep costs down by focusing on managing and reducing potential claims scenarios.

According to Travelers, the second most common workplace related injury are slips, trips and falls. They result is roughly 25,000 incidents daily in the United States. Theft is another common incident that may result in a claim.

A number of insurance carriers offer discounts to help reduce potential claims. For example, investing in a central station burglar alarm qualifies you business for a discount on your Business Owners insurance.

Other areas to consider when drafting your risk management strategy:

  • Regularly inspect and clean exhaust hoods in restaurants
  • Keep floors dry at all times and consider non-slip mats in areas prone to spills
  • Keep walkways clear to prevent trips
  • Inspect and tag all fire extinguishers as scheduled
  • Install security camera system
  • Consider investing in a central station fire alarm (may be eligible for discounts)
  • Ensure smoke detectors all function properly

 

You can save money on Business Insurance by taking these three steps to keep your insurance costs down. Contact us today for more details or to geting started.

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Risk Management for Restaurants

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Starting and maintaing a successful restaurant operation is no easy task. It’s no secret that most restaurants do not survive beyond three years. There are a multitude of factors to consider when starting or running a restaurant, such as menu items, interior decorations, marketing, and location. Even with all of those elements perfected, a single mishap can lead to the permenant closure of the business.

A key factor to success is to be ready for emergencies such as fires, food spoilage and liquor-related lawsuits. You can prepare by completing a risk analysis to determine what areas need attention. A carefully thought out risk management plan can decrease the chances of experiencing a devastating claim.

In the list below, we will go over risk management strategies for restaurants.

1. Follow Safety and Health Codes

Regulations and codes may vary from city to city, so verify with your local health department first. Make sure to be familiar with the codes so you are prepared for possible inspections.

Most common areas to consider are:

  • Health inspections – Passing health inspections is crucial to staying open for business.
  • Safety equipment – Equipment can include the AES (Automatic Extinguishing System), portable extinguishing system, wet floor signs, etc.
  • Food storage – Codes may lay out how certain types of food must be stored. Be sure to know what they necessitate.
  • Employee cleanliness – Simple acts such as washing hands and covering mouths while sneezing go a long way to maintain proper hygiene
  • Cleaning supplies – Codes may outline which cleaners can be used on various surfaces. They may also note how often they must be cleaned.

Creating a safe and clean environment for your employees and customers will help avoid being charged with violations, or worse, sued.

2. Equipment maintenance

Being stuck with a broken piece of equipment when it really matters can be frustrating. Non-functioning equipment could also potentially lead to lost business or more serious problems, like fires.

Check the following equipment regularly:

  • Kitchen exhaust hoods – Regular maintance and cleaning of the exhaust hood can reduce grease build-up. Reducing grease build-up may increase the hood’s efficiency and reduce the chances of a fire spreading beyond the kitchen area.
  • Refrigeration equipment – Properly operating refrigerators are important to minimizing food spoilage, which can lead to downtime for the business. Additionally, it can lead to foodborne illnesses which can result in costly lawsuits.
  • Cooking equipment – A malfunctioning fryer or griddle can be a fire hazard and lead to customer or employee injury.

You can also protect equipment with commercial property coverage. If you equipment is stolen or damaged from a fire, commercial property insurance can pay to replace or fix the piece of equipment.

3. Premises maintenance

Injury can be caused by poor maintenance of the facility. Take these steps to reduce the chances of a customer or employee getting hurt:

  • Keep floors clean and dry – Spilt fluids can pose a slipping hazard which can cause serious injury to customers or employees. Taking steps to make sure floors are clean and dry will reduce slip and fall incidents.
  • Keep kitchens clean – A kitchen free of clutter will minimize chances for employee injury or possible kitchen fires. Make sure knives and other utensils are properly stored to minimize possible injury. Clean ovens and grills may reduce chances of fires, so check these regularly.

If an employee is injured while on the job, workers compensation insurance can pay for medical expenses and more.

On the other hand, if a customer is injured while at your restaurant, the commercial general liability insurance can pay for legal costs arising from lawsuits in addition to medical bills.

4. Leverage Technology

Modern technology gives provides us with convenience and security. However, operating them presents new exposures to risks. For example, a restaurant’s POS (point-of-sales) device may be a source of risk for customer information theft. Take these steps to minimize cyber related crimes:

  • Protected Wi-Fi network – Offering public wireless interenet access is a great way to get customers into your establishment. However, this can be a security weak point. You can keep your network safe from criminals by offering Wi-Fi access to paying customers only.
  • Anti-virus protection – Firewalls and anti-virus software can help prevent malware or viruses from attacking business computer systems.

Cyber risks can also be met with cyber liability insurance. Cyber liability insurance can pay for notifications to victims, legal costs related to lawsuits, and more.

5. Train Employees

Employees can be a restaurant business’ largest expense and is critical to the business’ success. Therefore, you want to make certain that they are operating at their best while keeping them safe. Employees also can help avoid potential problems quickly with proper training. These areas to focus on include:

  • Food handling procedure – Hold regular training sessions going over proper food handling procedures.
  • Customer service procedure – Problem resolution is important to keeping patrons satisified. Employees should be trained to handle complaints in addition to if and when the problem needs to be escalated to a manager.
  • Alcohol serving procedure – If alcohol is served on your premises, having alcohol serving training in place is important because your business may be responsible for intoxicated customers. Take steps to train employees on identifying intoxication, refusing service and handling intoxicated customers. Use available resources, such as TIPS, to set-up procedures for your alcohol-serving business.
  • Safety procedure – Create and share steps taken in the event of an emergency, such as a robbery, fire injury.

A properly trained employee will increase customer satisfaction and safety and reduce chances of litigation.

Restaurant Insurance

Taking precaution by setting up risk management techniques can still result in unexpected events. As a result, business insurance is an important piece of the restaurant risk management plan. Insuring your restaurant business with a tailored insurance policy can cover a customer’s food sickness incident  or an employee’s slip and fall.

You can learn more about restaurant insurance here.

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Your employee was injured at work. What next?

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Your employee was injured at work. What next?

When your employee is injured on the job, it is important to move quickly in providing medical attention and opening a workers compensation claim. Doing so will help minimize the total cost and the severity of the injury.

Following these three steps will help employers plan ahead and be prepared in the event of an injury.

Step 1 – Preparedness is key

Business owners can prepare by finding ways to prevent workplace injuries. In the event one occurs, finding ways to respond quickly is critical. These preventative and response methods include:

Planning to prevent injuries is the best way for business owners to reduce risk. However, prevention is not always possible, so preparing for the worst is essential.

Step 2 – Respond quickly after injury

  • Evaluate the scenario – Move the injured to a safe place and evaluate the injury. Take note of the severity of injury and what caused the accident.
  • Help the injured – If the injury is minor – such as scrapes, cuts and burns – treatment using first aid supplies may be all that is required. If the injury necessitates more serious treatment, seek professional help or emergency medical services.
  • Complete an incident report – Collect and keep information and any evidence relating to the incident as quickly as possible. Write down the details of the incident and secure witness statements. Gather evidence of the incident by collecting surveillance video, photos, equipment, etc. Incident reports should be made even if employees say they are fine. They may seek medical attention later in time.

Being prepared to respond to an accident will help lessen panic, thereby allowing business owners to remain calm and collected.

Step 3 – Stay committed to communicating and following through

Business owners should work along with their employee on opening a workers compensation claim with the insurance company.

Keep in mind that it is favorable to the business owner if he or she maintains communication with all parties related to the incident. This includes the claims adjuster, insurance agent and injured employee.

In the event the injured employee sues, it is important to maintain open communication. More specifically, business owners should provide attorneys and adjusters with information and documentation relating to the claim. Settling a claim early in the process can prevent an expensive, drawn out lawsuit.

 

Taking steps to prevent workplace injuries from occurring in the first place will help avoid expensive claims and potential litigation. However, if an injury does occur, being prepared and responding quickly can help minimize the severity of the injury and protect the employer.

If you have any questions, please contact us here.

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