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Tuesday Morning Insurance Tidbit - OH MY!!!!


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Happy Tuesday ADI-Land!!!!!!!!!

     Holy Moly!  Between the wicked and wild weather that is currently plaguing the central US, to the downright cold and wintry weather here in Sheridanopolis, to great white sharks in NYC, it makes one wonder to one’s self, “Self …” I think to myself, “ … what in the world is happening!?!?!?!”  Then my thoughts snap back to insurance, because it all boils down to insurance at a grass roots level.  Am I right?!?!?!

     “How is the great and all-knowing InsuranceMan 2.0!!! going to make any of that relate to this installment of the ‘Tidbit’?”, you wonder.  Well I am glad you asked.  In this installment of the tidbit, I am going to magically weave all of these aforementioned items into an insurance lesson tapestry, for your reading pleasure.

     First and foremost, the wicked weather in the central part of the US.  Many of us view insurance coverage as coming into play if we have maybe done something (or not done something), and it results in a injury to a person or property.  Maybe a fire, or slip/trip-and-fall at our business.  Oddly though, many insurance claims come at the hands of Mother Nature herself.

     According to The Travelers Companies Inc., more than half of all claims from 2009 to 2015 were weather related.  Interestingly, 25% was due to wind; 15% was due to hail, and the other 19% (I will do the math for you, that is 59% 😉 ) was ice dams/roof leakage/water damage, etc.  Dang!  Although fire damage is the most costly of all damage, as you can see, weather related insurance claims make up nearly 3/5ths of all claims activity.

     With the amount of rain, tornadic activity, hail, and strong winds that is currently happening it makes one realize that insurance coverage is incredibly important during times like these.  “Acts of God” as they are called are the leading cause of all claims, yet many do not think of insurance in this way.  A more common worry may be an auto accident, or the previously mentioned slip/trip-and-fall.  In reality, most claims situations come from things that are far beyond our control.  Are you insured correctly for these instances?  Does your policy cover you for flooding?  Is there a wind/hail exclusion on your policy? 

     If this has made you set down you lowball and go scrambling for your insurance policy that is good … and bad.  It is good because it has you thinking and wondering what is in your policy.  Opposite that though, it is bad because you didn’t know!  I’m not “policy-shaming” you here, but if you don’t know, why don’t you know?  That could be the fault of your agent not explaining it to you or taking the time to let you know.  What if there is a wind/hail exclusion and your distillery is the victim of a tornado and all your precious bourbon is now broken open on the floor and riddled with hail????  Well, grab a straw and get to slurping, because that is the only thing that is going to console you at the end of the day because if that is the case, you don’t have the coverage in place that you should have.

     Now, with that little bit of unpleasantness behind us, let us turn our attention to the cold that is gripping us here in the western part of the US.  Did you know that according to the Insurance Information Institute, 18% of all water damage is due to water damage from frozen and burst pipes?  Yeppers, you heard it here first.  The cold can wreak havoc on your business, especially at this time of year where it should be warm (PLEASE BE WARM SOON).  I have had insureds that have turned their heat off because it is springtime, only to succumb to a claim because of a freak cold snap with freezing temperatures that cause their pipes to freeze and burst.  No bueno!

     Again, this is a situation that we may not have much control over.  It is usually nice and warm at this time of year and therefore commonsense would tell you that it is ok to turn off the heat since it almost June for cripes sake.  Well, although we have some control and we could have left that thermostat turned up, we were not planning on this horrible, miserable, cruddy cold weather.  Next thing you know, BAM!!!!!!! Water claim.

     This brings us to our last item for this article, sharks in NYC.  “Oh, yeah!  How is InsuranceMan 2.0!!! going to tie this in?!?!?!  I cannot wait to see this one!!!!!”, you say to yourself aloud.  Ha!  Never doubt my powers of relating all things to insurance, dear reader.  My insurance-superpowers know no bounds.

     For this scenario let’s assume that you have a distillery in the northeast.  Let us also keep in mind that Memorial Day is just 6 days away.  Let us also say that your head distiller decides that they are going to go to the beach for the long weekend.  Pack a picnic, grab a sample bottle or two from the tasting room and hit the road.  They get to the beach, settle in, have a little swig from the bottle, and soak up some sun.  Ahhhhh … This is the life!!!!  After some sun-soaking, your head distiller gets a bit hot and decides that they are going for a quick dip in the ocean.  UH-OH, you can see where this is going!!!!!!  Yeap, que the music, because your head distiller is about to become a tasty little shark-snack in the blink of an eye … or in this case, the snap of some seriously powerful jaws.

     Did you have “Key-Person” insurance on them?  What is Key-Person insurance anyway?  Again, I am glad you asked.  Key-Person insurance, at its most simplistic level, is a life insurance policy for a key employee, business partner, or even spouse that you, the owner of the company, can take out on key individuals, you pay for the premiums, and become the beneficiary in case something like this shark-snack scenario takes place.

     Why would you have such a policy?  Wow, you are inquisitive today, aren’t you?!!!?  Well, as the beneficiary of the policy, if the unforeseen happens, you receive the proceeds of the policy and can then use them to find a replacement person (but really, who can really ever replace INSERT NAME HERE), pay off debts, maybe settle with other investment parties, or in the worst case, assist in the liquidation and closing of the distillery.  Often time, key employees are your most valuable asset, yet most do not choose to, or know they can, insure their most valuable of all assets.  It is certainly something to consider and it should be something that you work into your insurance portfolio if you are in this type of a situation where your business really revolves around one or two main employees/investors/business partners.

     With all of those depressing scenarios, that brings us to the end of this installment of the “Tidbit”.  I did not write this to bring you down, or wring your hands worrying about all the crazy horrible things that could happen.  Rather, I wrote this to get you thinking that there are so many situations that are out of our control, so many things that no matter how careful you are and how much you plan, losses can happen.  “Yeah, but I have always had good luck and nothing like this has ever happened to me!”, you may be thinking.  Well, I will tell you what an actuary would say (BTW, actuaries are like a mix of funeral directors and CPA’s, but without a personality) …  “If you have not had a loss in many years, or ever, then you are due!”

     If this has set you in to thinking about what is or isn’t covered, or if you don’t know if your policy is protecting you for the unforeseeable, or if your agent never speaks to you and only sends you invoices, then maybe it is time you drop me a line.  InsuranceMan 2.0!!! is always here to help!!!!!

Until next time my friends,

Stay Vigilant,

Aaron Linden

a.k.a InsuranceMan 2.0!!!



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