To survive as a consultant in any industry, you need to charge fees that will enable you to stay in business; at the same time, both you and your clients need to feel that your fees are fair and equitable. So how do you find the middle ground that seems fair to everyone involved?
Ways to Motivate Individuals to Become a Winning Team
In sports, we often talk about athletes who “want it” more than others. These are the players who show up early, who use up every last ounce of energy in pursuit of their best performance. Players for whom defeat is viscerally painful, the ones who will stop at nothing to succeed.
Supporting Teams Your Business Needs to Succeed
Teamwork is critical to building a successful business. Successful entrepreneurs engage a brain trust of mentors and advisors who coach them for free, and they develop strategic partnerships with individuals and businesses.
Lessons I Learned From Ditching My 9-to-5
A year ago, after months of late nights and weekends spent working my side hustle, I made the leap into freelancing full time. Since then, I’ve been consulting for various small businesses, helping them launch their online presence.
Celebrating Insurance Awareness Day: All Your Questions Answered
June 28th is Insurance Awareness Day – a very exciting day for the insurance industry! It is a day for the experts in the field to share their knowledge about the perplexing world of insurance and to help you better understand the potential risks you face on a daily basis. Whether you own a business, house, car, boat or even a pet, everyone needs some sort of insurance to protect their assets. So today, our knowledgeable and experienced staff are answering some of their most frequently asked questions to [hopefully] make insurance just a little bit easier to understand.
INSURANCE AT A GLANCE
Q: Why buy insurance for my new business?
A: Insurance allows entrepreneurs to start businesses, which helps not only them but the country itself. Without insurance to protect their investment, few people would be willing to risk opening, say, a bar or restaurant. A catastrophic loss paid out of pocket could result in not only the closing of the business, but a disastrous financial impact on the owners. Transferring the risk of damage to a building from a fire, or a possible lawsuit from someone falling on the premises, to an insurer allows a business to generate economic activity that benefits the owners, the employees, and society at large.
Q: Why should I purchase liquor liability insurance?
A: States impose varying degrees of responsibility for those engaged in manufacturing, selling, or serving alcoholic beverages. Serving an intoxicated person or a minor may result in a lawsuit against you, the business owner. Depending on the circumstances, the suit may take years to resolve. Even if you are found not liable, the legal fees alone could bankrupt you and your business. Transferring the risk to an insurance carrier means you transfer not only the legal costs but the amount of the verdict, if any, up to the limits of the policy.
Q: Are bars and restaurants required to carry liquor liability insurance?
A: Some states require establishments that serve, sell or assist in the purchasing of liquor to carry Liquor Liability insurance and some do not. However, even in the states that do not mandate this coverage, as the owner of an establishment of this nature, you could be required to purchase insurance by a financial institution or a lease agreement if you have taken out a loan or if you are renting space. In any event, to carry this insurance could mean the difference between having to close your doors or continuing to run a successful business should you ever be faced with a lawsuit.
Q: Is a temporary event policy necessary if I am hosting an event where liquor is going to be served?
A: The summer holiday season is upon us and with that comes celebrations that you may be hosting. It is important to consider purchasing liquor liability insurance to protect yourself against potential claims that may arise from over service of alcohol. Once a suit is filed, all individuals involved in hosting the event could find themselves named in a suit. A temporary event policy will help to offer protection should you find yourself in this situation!
Q: What is underwriting and what role does it serve within the insurance industry?
A: Underwriting is the process of evaluating insurable loss exposures, accepting or rejecting them, classifying accepted risks, and determining the appropriate price. Underwriting serves both the insurer as well as the insurance buyers by helping the insurer avoid adverse selection.
Q: How can I save money on my insurance?
A: Most insurance companies offer cost-saving incentives for businesses that insure with them. Know what your insurance company offers for discounts and make sure you are getting all that you are eligible for. Most insurance companies have filed for insurance credits for those insureds who meet certain criteria. For example, at Hospitality Insurance Group we offer a discount for those establishments that have trained their staff on the safe service of alcohol. Many agents/insureds are not aware of the discounts that are being offered by their insurance company. You should speak with the insurance company and find out what credits they allow and make certain that you request the discount if you meet their criteria.
COVERAGES
Q: What does Coverage C-Medical Payments cover on my CGL Policy and how does it differ from Coverage A- Bodily Injury and Property Damage Liability?
A: Coverage C-Medical Payments coverage includes first aid administered at the time of the accident along with necessary medical, surgical, X-ray, and dental services. Coverage C differs from Coverage A because is not liability and pays regardless of whether the insured is legally liable.
Q: Is an umbrella policy or excess coverage necessary to purchase for my business?
A: Standard business liability coverage will be enough in most situations, but when serious situations arise, commercial umbrella insurance or excess liability coverage will help ensure that your business is protected. Umbrella/Excess liability insurance protects you when accidents happen and your existing liability insurance policies cannot cover all the expenses. Essentially, it picks up where your business auto liability, general liability, liquor liability or other liability coverage stops, providing extra protection against bodily injury and/or property damage.
Q: Is there a difference between an umbrella policy and an excess liability policy?
A: Yes there is definitely a difference between these two policies.
An excess policy also known as a follow form policy, follows the same coverage and exclusions as your underlying policies (general liability, commercial auto, liquor liability, etc.). If there is no coverage in the underlying policies then there is no coverage in the excess policy. The excess policy provides you with higher liability limits. Typically your underlying policies will provide you with limits of $1,000,000 per occurrence (each incident) with a $2,000,000 aggregate (annual policy payout). If you need higher limits you would purchase an excess policy to provide you with those higher liability limits.
An umbrella policy also expands the limit that your company already has in its existing, or underlying, liability policies. However, an umbrella policy will usually broaden coverage for things that your underlying policies may not cover. If your auto liability policy covers accidents that might occur in a specific area, an umbrella policy could expand the coverage territory.
Both policies will provide you with higher liability limits for bodily injury and property damage. However, the umbrella policy may broaden coverage for things that are not covered in the underlying policies while an excess policy will ONLY pay based on the coverage that you have in the underlying policies.
Q: Am I covered for food spoilage if my refrigerators/freezers break or if there is a power outage during a storm?
A: Depending on the insurance company and the coverage form that is being offered you may or may not be covered. Some forms include a set limit for spoilage that can be increased if more coverage is needed. Some forms will automatically include spoilage but not provide coverage for power outage. Even if the form you are purchasing does not include spoilage, almost all insurance companies will allow you to purchase spoilage coverage and include the perils you want coverage on. So be sure to do some homework here and know what you are getting in the form and what you might need to purchase as additional insurance to meet your needs.
CLAIMS
Q: If someone falls and hurts oneself on a restaurant’s premises, does the person have any recourse against the restaurant?
A: A restaurant may be liable if someone slips or trips and falls on their premises. For example, if someone slips on spilled food or drink inside the restaurant or snow and ice that has not been cleared from a walkway, the restaurant might be held liable for any injuries that person sustains. For the restaurant to be held liable, they would have to have known or should have known about the dangerous condition and failed to warn visitors or clean it up.
Q: Why is it important to report a liability claim as soon as possible even if I do not feel that there is a claim that will be pursued?
A: It is important for the claims adjuster to investigate and gather information as quickly as possible to make a complete liability decision. Failure to report in a timely manner could result in loss of important investigative material that could change the outcome of the claim. Even if you do not feel a claim will be pursued, you should report it so the adjuster can complete a thorough first party investigation in the event the other party resurfaces down the road.
Q: As a business owner, what relevant information needs to be provided when a liability claim is reported?
A: In order to assist the claims adjuster with his/her investigation it is important to provide a copy of the surveillance video capturing the incident. If available, scene photos, and witness names/contact information are also important pieces of information to provide in your incident report. The more evidence that is preserved, the better for the investigation process.
Q: What is the importance of providing an employee’s personal contact information if he/she was a witness to an incident?
A: In case the matter goes into litigation at a later date and the employee is no longer employed at the insured establishment, the claims adjuster or defense attorney will be able to make contact. Sometimes more detailed information is required.
Q: As a business owner that has suffered a loss, what are my duties after reporting the claim?
A: It is your duty to take all reasonable steps to protect the property from any further damage. You will need to maintain a record of your expenses that were necessary to protect that property from further damage to be considered as part of the settlement. Also, you will need to keep a complete inventory of the damaged and undamaged property to be considered as well. It is also very important that you cooperate with the insurance company in the investigation and/or settlement of the claim.
Please be advised that the opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute a legal opinion.
Uncovering the Mystery: Admitted Insurers vs. Surplus Lines
Chances are if you have been in the insurance industry long enough then you have heard the terms admitted (or standard) and surplus lines (or non-admitted) used to describe insurance carriers. Although these terms share many characteristics, there are some glaring differences as well. What do these terms mean and what sort of protection are you providing or not providing your client by placing coverage with these different types of insurance carriers? Let’s take a minute to identify the major differences and misconceptions associated with each.
Admitted Insurers
An admitted insurer, which can also be referred to as a standard market, is a term used to classify an insurance carrier that is licensed by a state insurance department to do business in the insured’s state. The major benefit of an admitted insurance company is that the insured is protected by the state’s guaranty (insolvency) fund should the insurer become insolvent and unable to fulfill their contractual obligation to pay covered losses. These state funds do not prevent insurer insolvency but they do mitigate its effect by providing payment for unpaid claims. State guaranty funds vary by state, however most have the following characteristics in common:
- Assessments are made only when an insurer fails
- Policies usually terminate within 30 days after the failure date
- Claims are subject to maximum limits
- Most states provide a refund of unearned premium
Surplus Lines
Surplus lines insurers, also known as non-admitted markets, are deemed eligible by the state to insure risks that do not qualify for coverage with an admitted insurer. These types of insurers are not licensed in the states they write in.
Aside from not being supported by the guaranty fund, unlicensed or non-admitted carriers are not bound by most of the rate and form regulations imposed on admitted insurers, giving them the flexibility to change forms and rates without the time constraints or financial costs of the filing process. This flexibility may result in your client being left with sudden restrictions or significant gaps in coverage that were not anticipated.
When a producer needs to access a non-admitted carrier, they often have to go through a surplus lines intermediary, also known as a wholesaler or aggregator, rather than contact the non-admitted insurer directly. The circumstances for accessing a non-admitted market vary by state, but usually involve the following:
- Hard to place risks with unique or high loss exposures
- Recent losses or extensive loss history
Which is better?
Due to the nature of non-admitted insurers, agents and brokers alike must exercise extreme caution when navigating the surplus lines marketplace. The consistency and familiarity found in the admitted market does not always exist in the non-admitted arena and this may prove costly for your client. For exactly this reason, many producers will only place business with admitted insurers.
It is the producer’s responsibility to conduct a diligent search, which may require them to document a specific number of admitted markets that have declined the risk before attempting to secure coverage in the non-admitted market. Before approaching any non-admitted carriers, you should be sure that you have exhausted all of your options with the admitted carriers you have access to.
Hospitality Insurance Group is a licensed and admitted insurance carrier specializing in hard to place risks within the hospitality industry. We are currently writing business in the states of CT, MA, NC, NH, PA, RI & VT.
Please be advised that the opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute a legal opinion.
Spring is Near but Not yet Here
While spring is on its way, we are not entirely in the clear from the threats of the cold winter weather. As history shows, March is one of those months when the temperatures can fluctuate by an astounding 20-30 degrees from day to night. Today could be a warm, sunny, spring-like day and tomorrow we could face a blizzard – we really just never know what March will surprise us with.
Recent fluctuation of temperatures from subfreezing to above freezing has caused frozen pipes, and even more concerning, subsequent thawing conditions. In 2015, hundreds if not thousands of northeast business owners experienced firsthand the economic toll caused by weather-related water losses. The arctic cold we’ve experienced thus far this year is reminiscent of last year’s extremely challenging climate conditions. There is no doubt that the business owners who sustained property damage and interruption of their operations last year are now aware that they can reduce their risk of a water loss by taking preventative steps to protect their business. For our policyholders who were more fortunate, we hope the following will assist you with a better understanding of how you can prevent large water losses.
Frozen & Thawing Pipes
Pipes that are exposed to severe cold or run along exterior walls that have little to no insulation have a greater tendency to freeze. As pipes freeze, the water inside expands. This can cause the pipe itself to expand as well. Once frozen, the water that had been continuously flowing through the pipe thaws and will escape when the pipe ultimately breaks under pressure of expansion.
Ice Dams
Another type of winter hazard that business owners face are ice dams. Ice dams occur when a ridge of ice forms at the lower edge of a roof and prevents melting snow from draining adequately. Water accumulates behind the dam and can eventually leak, most often causing damage to the interior of the building.
Take Preventative Action
It is important to take preventative action and not allow a bad situation to become worse causing thousands of dollars worth of damage to your property. The following are a few steps that can be considered so that you have a profitable end to this winter season.
- Monitor your thermostat and maintain it at a consistent temperature 24 hours each day. This is especially important for seasonal operations that are not open during the winter months.
- Consider draining water from pipes that you have determined may be exposed to severe cold or are located in unheated or uninsulated areas.
- Inquire with a licensed plumber about allowing a minimal amount of water to flow through a pipe in order to prevent it from freezing.
The best approach for a commercial property policyholder would be to consult with a licensed plumber prior to the arrival of severe weather conditions so that you know the risks and what actions will safely reduce or even eliminate the chance of a water damage loss.
As eager as we are for spring to arrive, it is important to remember that we are not in the clear until temperatures stay well above freezing. The first day of spring is on March 20th this year and hopefully that means warmer weather as well. Until then, Hospitality Insurance Group wishes you a pleasant and uneventful end to this winter season.
Please be advised that the opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute a legal opinion.
Celebrate Safely: Why You Need Liquor Liability for Holiday Parties
What comes to mind when you hear the words “Holiday Party” or “New Year’s Celebration?” For most it means food, family, friends and fun. But what’s the best way to celebrate the end of a year and the start to a new one? With festive drinks of course.
It has become generally accepted that special events wouldn’t be as special without alcohol, especially around the holidays. Despite the omnipresent nature of alcohol this time of year, little thought is typically given to liquor liability or control of alcohol consumption.
If a drunk driver gets into an accident and injures or kills someone, it doesn’t matter whether the driver is coming from a bar, a restaurant or a holiday party. Someone is likely to be sued for millions of dollars.
Given the potential liability, anyone planning an event where alcohol will be served should be certain to take precautions. Event planning should include a process for preventing overindulgence. Even the most careful planning is not foolproof, so liquor liability insurance coverage is also a necessity.
Who’s Responsible?
Typically, whoever is pouring the alcohol can be held liable if intoxication results in an accident or injury. If a caterer is serving food and beverages, be certain the caterer is properly insured and has liquor liability coverage. If an event is being held at a business that frequently holds functions, the owner should have liquor liability coverage.
However, even if those who are serving alcohol have liquor liability coverage, never assume that you have the protection you need. Remember that when a suit is filed, the attorney typically will sue everyone who may be held responsible in any way. That may include a caterer and the owner of the facility that held the function, but it also may include the bartender and whoever organized the function.
If an event is being held in a home, homeowner’s insurance will usually provide liquor liability coverage, although liability coverage is typically limited to $100,000 to $300,000, depending on the policy. Homeowners should check with their agent. Cases involving homeowners as “social hosts” typically have been sympathetic to the homeowner, especially if individuals became intoxicated without the homeowner’s knowledge or when the homeowner did not supply the alcoholic beverages.
However, in the landmark case of McGuiggan v. New England Tel. & Tel. Co., which took place in 1986, the Massachusetts Supreme Judicial Court said that, given an appropriate case, it would “recognize a social host liability to a person injured by an intoxicated guest’s negligent operation of a motor vehicle” where the host should have known the guest was drunk, but permitted the guest to drive, resulting in an injury.
Preventing Liquor Liability
So what should you do to protect yourself when serving alcohol?
- Hire only experienced, trained bartenders. Bartenders are trained to recognize when individuals have had too much to drink.
- Have someone continuously monitor the premises. During a function, if no one is watching, adults may buy drinks for minors or minors may go from table to table, sipping adults’ drinks until they become intoxicated.
- Purchase one-day liquor liability coverage or add your name to an existing liquor liability policy. Coverage may be available for as little as a couple hundred dollars for a function, depending on the number of attendees and the coverage limits.
In Massachusetts, to obtain liquor liability insurance, the applicant must have a temporary license for serving alcohol. According to Massachusetts law, “A ‘Special License’ to pour liquor at an indoor or outdoor activity or enterprises may be issued to the responsible manager” of the activity or enterprise.
The license is issued by the local licensing authority of the city or town in which the activity is scheduled to take place. In smaller towns, a license may not be required. In such cases, the sponsor must write a letter stating that no license is required to hold the event and submit the letter when purchasing insurance.
According to the statute, the license may be issued “to a natural person,” who may be acting on behalf of a corporation, partnership or other entity. Temporary licenses can be granted to any entity for up to 30 days in any calendar year. This limit applies to all entities except college dining halls.
Laws regarding liquor licenses and liquor liability coverage vary by state, so it is important to be aware of the laws in your state before planning an event where alcohol is going to be served.
At any special event, perhaps the most important rule is to use common sense. Drink responsibly this holiday season. In doing so, you could save a life.
John W. Tympanick is President & CEO of Hospitality Insurance Group.
Please be advised that the opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute a legal opinion.
Liquor Liability: The Season to Sell
Looking to target bars, restaurants, social clubs and the like? There’s no better time than now.
Since 2010, the Commonwealth of Massachusetts has mandated all liquor licensees provide proof of insurance to their local licensing authority when filing a request for a new liquor license or when renewing an existing liquor license. With all licenses renewing on January 1st, now is the time to target these establishments to ensure they not only have the coverage mandated by the state but the coverage they need to protect their establishment against costly claims.
The Act has two components: (1) it mandates liquor liability insurance for establishments with pouring licenses, and (2) it revises existing law to be consistent with the new mandatory liquor liability insurance requirement. The first component is discussed below.
Mandatory Liquor Liability Insurance Requirements
The law requires liquor licensees serving alcoholic beverages on premises to obtain liability coverage for bodily injury or death for a minimum amount of $250,000 for injury to or death of one person, and $500,000 for any one accident resulting in injury to or death to more than one person. Insurance companies offering such coverage must do so in accordance with the ratemaking provisions and filing requirements of the Massachusetts Division of Insurance.
The law requires that any applicant for a pouring license or for renewal of a pouring license must file a certificate of insurance in a form acceptable to the local licensing authority prior to issuance of any such license or renewal.
What does this mean for agents?
There is no better time than now to target those liquor-serving establishments, but don’t wait until the last minute. Hospitality Insurance Group is ready to accept applications to provide a comprehensive and competitive quote. We will work with you to issue your liquor liability policy so you can align all of your client’s coverage’s into one expiration date.
We now offer:
- Package Policies (Property and General Liability)
- Stand-alone Liquor Liability with optional GL Assault and Battery
- Stand-alone General Liability
- Excess Liability (up to an additional $3 million)
- Property Damage
So if you haven’t tried Hospitality Insurance Group lately, please give us the opportunity to provide you with superior service and competitive pricing. When talking liquor liability, this is the season to sell.
John Tympanick is the President & CEO/Director of Hospitality Insurance Group
Please be advised that the opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute a legal opinion.
Defy the Odds, Own Your Risk
It is easy to have a ‘what are the chances’ mentality, but for bar and restaurant owners, that shouldn’t be an option. If you own a business that serves or sells liquor, you should take every precautionary measure to ensure responsible serving and consumption on your premises. Liquor liability claims are usually severe, often involving tragic fatalities or long term disabilities if the victims survive, so betting on the odds is not a risk you should be willing to take.
Every state has their own dram shop statues and the rules regarding burden of proof, common law, statute of limitations and damages awarded also vary. Every business owner should, at the very minimum, know the laws that affect their business, but there are other things you can do to minimize your risk.
- Create a safe serving culture: Management should implement policies and procedures that create a culture where safe serving is common practice. The following rules should go without question:
- Food should be readily available to patrons consuming alcohol
- Patrons should be allowed one drink per person at a time
- “Last Call “should be implemented and enforced prior to closing
- Happy hour, if legal in your state, should have set parameters
- Don’t allow employees to drink on the premises after their shift where employees are served by co-workers who might have a difficult time refusing a friend
- Management should have procedures in place for handling difficult situations. They need to recognize and read signs of intoxication before they escalate. Do you let patrons get intoxicated to the point that they need a designated driver or a cab to take them home?
- Educate your employees: Employers need to make sure alcohol awareness programs are available to all management and employees. Make it a requirement. Responsible Alcohol Management Program (RAMP) and the Serv Safe Alcohol Program are two national programs along with many others that offer alcohol training for your staff. These programs discuss Blood Alcohol Concentration and how to observe the different signs of Employees should be re-certified annually. Local Law enforcement can also help in educating you and your employees. Build a relationship with law enforcement; ask them to come in periodically to train employees how to recognize false identifications, methods of dealing with intoxicated guests and to discuss the local and state laws regarding the sale and service of alcohol.
- Monitor your customers & educate them about the dangers of drinking and driving. Some establishments offer free soft drinks to designated drivers. While it is impossible to tell the exact affect alcohol will have on one person versus another, the only way to sober up is to stop drinking and wait. The liver has to process the alcohol. While coffee and soft drinks won’t eliminate the alcohol in a person’s system, it just might stop that customer from having another alcoholic beverage they don’t need and give them the time they need to process the alcohol.
The environment you create does effect the amount of alcohol your customers will drink. Is your staff trained to monitor patrons as they enter, stay and exit? Does your staff communicate with each other when there is a change in shift? Is your establishment so crowded due to low drink prices that it is difficult to monitor? Are there reasonably priced non-alcoholic drink alternatives, food promotions and snacks available at all times? These are all questions you should ask yourself as the owner of an establishment that is at risk for a liquor liability lawsuit.
What else can you do?
Talk with other restaurant and bar owners to share ideas. Join your state’s restaurant or tavern association where you can discuss drinking trends, safety and procedures. How do you know if you are being effective? Check your surveillance videos and audit bar checks and receipts to make sure your message is being heard. If you do everything right and still have a reported incident, call your insurance company and report it right away. Due to the nature of the industry, even the most responsible of business owners will face claims, but the earlier you report it, the faster the insurance company can investigate and protect you. If you have followed the steps above, all the information they need will be readily available to them.
Be responsible and proactive in protecting your business because chances are, the odds will not be forever in your favor!
Sonya Gray is a Sr. Underwriting & Marketing Manager at Hospitality Insurance Group.
Please be advised that the opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute a legal opinion.