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There was a time when you had one deductible for your insurance. You knew that this was the amount that you would pay in settling a claim. There were established discounts for raising that deductible and as your risk tolerance increased, your premium decreased. Those days are gone, and your latest insurance policy may have a number of different deductibles. Deductibles have evolved into a tool for exposure and risk management for policyholders and insurance companies. Wind and Hail Deductible Most personal lines and commercial property insurance policies now have a separate wind and hail deductible. This can be a set dollar amount or a percentage deductible. The percentage is not a percentage of the claim, but the percentage of the building value. Since roofing represents an average of 3% to 5% of the value of a building, a 2% deductible is significant. Earthquake / Earth Movement Deductible This line of business has commonly used a fixed dollar amount or a percentage deductible. The percentage deductible of 5% to 20% is common and must be evaluated in terms of your values. A common loss anticipated in our area is damage to brick veneer on frame structures. The cost of brick veneer averages between 7% and 10% of the property value, so this deductible may leave you with a substantial cost. The deductible applied increases as your seismic exposure increases. Flood / Water Damage Deductible Flood insurance carriers generally offer premium discounts for higher deductibles. Premiums increase with your exposure and the use of FEMA flood maps are a common tool for exposure determination.  Knowing your property elevation data is crucial to managing the cost of flood insurance. Making sure the flood determination is accurate is a key question for your insurance provider. As more insurance companies use third party services, address accuracy and geocoding are critical to this process. Property Deductible Risk Management The first step in deductible management is to know the dollars at risk. Having accurate property valuations will allow you to model the deductible amounts.  Determine if the deductible is a per occurrence deductible, so one deductible applies to the entire event versus a per building deductible. A per event or per occurrence deductible is easier to understand and manage.   Stop Loss for Deductibles For a deductible per building policy, you need accurate property values, and an estimate of how many properties could be exposed to the same event. You need to model the different locations for loss estimates for different perils.   For a schedule of values with multiple locations subject to a single event, the per building deductible can be a very large number. You may consider asking to negotiate a stop loss that would cap the deductible at a certain figure. This allows you to limit your loss exposure to a catastrophe event.  A stop loss value can be negotiated to limit the single event number to a known value.   Deductible Buy Back Insurance Ironically since one market is requiring the deductible, another market is growing to cover the deductible itself and buy back the dollars.  For large property exposures this can be a good risk management tool. Deductible buyback programs exist for wind, hail, flood and earthquake perils. Coupling a stop loss with a buyback is an effective tool for risk management. Liability Deductibles General liability policies may come with a deductible for liability losses. This can be to control loss frequency or to encourage risk management activities by the policy holder. This can also be expressed as Self-Insured Retention (SIR), where the insured manages their own claims to a certain value. An SIR is common in captive insurance programs and may be required for some excess liability policies. SIR is common in professional risk such as Errors and Omissions, Employment Practices and Executive Risk, Directors and Officers policies. Cyber liability policies may also include SIR.   There is an important difference between deductible and SIR. With a deductible the insurance company handles the loss adjustment process from day one. With SIR in place, the policyholder must manage the claim until the SIR limit is reached. You should consider how you will handle a claim if your policies include a significant SIR. Workers’ Compensation Deductibles Employers may opt for a deductible for small workers compensation claims as a management tool for their experience modification rate (EMR). This is a decision that is reached via careful loss analysis and modeling of EMR impacts. It is generally a choice made by the customer, not the insurance company. Some insurance companies will not offer this program as they are concerned with delays in claim reporting. Auto Deductibles Most people are familiar with deductibles for comprehensive and collisions insurance. It is possible to have vehicle specific deductibles to address either older or high value / high performance vehicles. This can be a good risk management tool for vehicle schedules with multiple units.   Similar to a general liability deductible you may see a liability deductible for auto. This is not a common tool, and many insurance companies decline to offer this as they want to avoid any delay in claim reporting. The Driehaus Difference Our understanding of coverages, insurance forms and market appetite make us agile in evaluating how a deductible can impact your cost of risk.  The day of higher deductible equals lower premium has given way to insurers using deductible to address their loss exposure. You need an insurance agent that can see through the numbers to help you make an informed choice. Call 513-977-6860 or contact us via our website, www.driehausins.com  to discuss your needs. We want to be your insurance provider.

In the world of “only pay for what you need”, shopping for insurance has taken on a new feel. The decision making about coverages and limits are now placed in the hands of the buyer. While this does lead to the buyer having the power to choose, it can be a difficult set of choices if you do not understand some of the differences in products offered by the insurance industry. Insurance is a not a “one size fits all” product. Different customers have different needs and different exposures have different treatments. We will take a look at homeowners’ insurance to highlights some of the choices available to you. This commentary is based on ISO forms. Individual companies may offer their own versions of homeowners policies, but the fundamental differences will remain. The titles of the forms are not descriptive. Many people expect the broad form to be better than the special form. The language is not intuitive. To appreciate the differences in these forms you need to understand the difference between a named perils and open perils insurance form. Without this context, you cannot make an informed choice as to what you need. Named Perils – policies using this type of coverage trigger include a list or descriptions of the perils that are intended to be covered by the policy. The insured party has the burden of proof to show that the loss was caused by one of the stated perils and is covered. Different policies may have different perils named. You need to evaluate the specific form to be sure you have the coverage you need. Open Perils - these policies take the opposite approach of named perils. The insurer describes or lists the perils that are not covered . The burden of proof at time of loss lies with the insurer to prove that coverage does not apply. It is still important to review the excluded perils on these forms to see if you have the coverage you need. The policies were once referred to as “all risk” coverage. That language is no longer used as it was found to be misleading. The differences in the policy forms become clearer when you understand the structure of the coverage. This also sets the stage for how you would approach a claim under these policies. If this is new information to you, do not feel bad. You will not find this level of detail on the web sites that want you to buy insurance directly. The insurance policy is a contract between you and the insurance company. In exchange for your paying the premium, the insurance company is obligated to provide the coverage in the form. You need to know the language of the form to evaluate what perils are either covered or excluded. The challenge is that you do not get the form until you purchase the policy. Most carrier web sites have FAQ sections, but they do not offer a copy of the form. As a result, you may find making the above suggested coverage comparisons a challenge. This discussion did not touch on the wide range of variables on deductibles, valuation terms and the endorsements that are available to tailor coverage to your situation. We know that you have a limit on your desire to read about insurance. Broadening Endorsements - Most insurance companies will offer a number of additional coverages on their policy. This broadening endorsement serves several purposes. It allows the main policy language to remain in place. Since this language has been litigated numerous times, this is an advantage for the insurance company. It offers the insurance company a way to respond to market changes and requests to add coverage. With service line and home warranty policies being widely marketed, the company can add coverage for mechanical breakdown and service lines to their products . The endorsements also allow companies to limit their exposure to some perils that are concerning. By adding a modest amount of coverage for backup of sewer and drains, the insurance company avoids litigation around excluding this peril. A small limit is easier to manage than the uncertainty of litigation. Read these endorsements carefully and request increases to limits when you feel the coverage offered is not adequate for your needs. The Driehaus Difference You have a busy life and may not want to take your time to uncover the definitions, policy terms and unique language of insurance contracts. You may not want to compare products from company to company. We have done this already. We want our clients to know the differences between forms and coverages. We can explain these to you and tell you why we suggest a carrier and the product from that carrier for you. We pride ourselves on our depth of insurance knowledge and experience. We want to use that knowledge to your advantage. Contact us by phone at 513-977-6860 or the internet at www.driehausins.com .

Every business uses cars or trucks to conduct their business. As auto accidents are the most frequent commercial insurance claim, you need to have a fleet safety policy to define expectations, set standards and have accountability for your results. This is an essential risk management tool. Vehicle use What is appropriate use of company owned vehicles? Do you allow personal use of the vehicles? If yes, then you are assuming a greater exposure to loss as the vehicle will be on the road more frequently. If you limit the usage to business use only, this must be clearly communicated to your employees. You can choose for either option, but the vehicle use should be clearly identified. This is not coverage issue for most auto policies, but a common underwriting question. Rules for vehicle use such as, no off road, no towing or other restrictions that you want to apply should be included in the vehicle use part of your fleet safety program. Authorized Drivers Who is an authorized driver? If you permit personal use of vehicles, are spouses or children permitted to use the company vehicle? Your insurance company will ask for a drivers list. Best practice is to maintain a drivers list that includes full name, date of birth, license number, state of issue and expiration date. This will allow you to alert drivers whose licenses may be ready to expire. In the COVID-19 era, some states stopped sending expiration notices to drivers. Some excess and surplus lines fleet insurance programs are driver specific. Having an outdated driver list for these policies can cause coverage gaps Motor Vehicle Records - MVR The driving history is a primary point of driver reviews and qualification for insurance purposes. It should also be a point of evaluation that the business owns and performs for itself. If you rely on your insurance agent or company to run MVRs for you, you are not managing your own exposures. The insurer may run all or a sample of the drivers’ data for motor vehicle record screening. Insurance companies and agents will not provide copies of MVR reports due to privacy laws. You should develop an MVR review standard and use that to qualify drivers. Having your own MVR standard allows you to establish expectations for behaviors and performance. It allows you to make objective decisions on driver qualification. Insurance carriers can offer sample driver qualification standards for you to use as a baseline. MVRS should be obtained before assigning driving duties and annually thereafter. For drivers that require DOT driver files, there is an annual requirement for a driver review that must be documented. Some insurance companies offer discounted driver surveillance services. These services monitor the motor vehicle record (MVR) of each enrolled driver. You get an alert of violations, expirations or any change to the license data. This may help any risk manage their driver list and know the status of drivers motor vehicle record. Not having established MVR standards can expose the employer to a claim of negligent entrustment. You gave a driver with a poor record access to a vehicle and a loss occurred. MVR Online access There is online access to MVR data for our local states. Ohio - https://bmvonline.dps.ohio.gov/ You can get a two-year MVR for free and a three-year MVR for a small fee. Kentucky - https://secure.kentucky.gov/dhronline This is a three-year record and costs $6.00 Indiana - https://www.in.gov/bmv/resources/driver-record/ You can view your record online or get a printed copy for $4.00 For employers who conduct background investigations, the MVR can be part of that process. Driver Qualifications For DOT regulated fleets there are medical evaluation requirements, reference checks and other driver qualification rules. Other non-regulated fleets may have experience requirements to be a qualified driver. These should be documented and communicated to your drivers. Vehicle Maintenance and Inspection Your policy should outline procedures for vehicle maintenance. The frequency and who will perform the services should be identified. Records of the vehicle maintenance should be maintained for each vehicle. For pool vehicles or units without a specific driver, make allowances for these vehicles to be inspected and maintained. Company vehicles should be inspected to verify condition and maintenance. This can also identify any unreported damage that has occurred. The inspections should be documented for each vehicle. There are DOT requirements for annual vehicle inspections by certified DOT providers that must be performed. DOT fleets also have the responsibility of performing pre-trip and post-trip inspections. Accident Reporting You should have a clear policy on accident reporting. Who is to be notified and when are police reports required? Accident kits with accident report templates are a valuable tool for helping a driver in this high stress time. Encourage cell phone photos of the accident scene and damage. Promptly reporting the claim to your insurance company will help the insurer manage the claim. DOT fleets are required to maintain an accident register for all accidents that meet DOT reportability standards. Defensive Driving Your fleet policy should endorse the concept of defensive driving and accident avoidance as a goal for your drivers. This seems like an obvious point, but it can be important in managing aggressive driver behavior that may be reported or observed. Insurance companies and multiple government agencies have materials on defensive driving that can be used as an ongoing messaging program for your drivers. Distracted Driving You need a clear policy that bans texting while driving and limits cell phone use while driving. Texting is simply too dangerous to consider a safe practice. Research has shown that hand-off cell phone use is not the panacea. The level of distraction from cell phone use is the intensity or complexity of the call. The best practice is to require drivers to focus their attention on driving and not allow texting or cell phone use. There are DOT regulations to this effect for DOT regulated fleets. Hired and Non Owned Vehicles Reimbursing employees to use their own vehicles for business does not mean you do not need a fleet safety plan. The driver qualification, MVR standards, accident reporting, vehicle inspections, defensive driving and distracted driving polices apply regardless of vehicle ownership. Driving is part of the employee responsibility, and you have a duty to manage that activity. The last level of risk management for hired and non-owned vehicles is having the owner prove they are carrying adequate levels of automobile insurance. You require minimum limits such as $100,000/ $300,000 limits as the minimum acceptable for your firm. This insulates you from minor events that occur. Telematics Technology offers fleet and business owners the ability to monitor vehicle use and driver behavior with ease and precision. Telematics can identify use patterns, operating areas and driver behaviors around speed, hard maneuvering, and driver distraction. Most insurance companies offer a discount for use of these services, and many have vendors aligned with their offerings. A good fleet safety plan that includes telematics has a higher success potential than one that does not leverage technology. The Driehaus Difference We understand the needs for business to have policies and procedures that support their overall operations and risk management plans. Ask us for help in reviewing or developing a fleet safety plan. Call us at 513-977-6860 or contact us via our web site at www.driehausins.com

We have published more than 90 articles about insurance and risk management. We reviewed, Policy forms Codes and standards that affect insurance The terms and conditions that affect your coverage A number of safety and regulatory issues that are frequent flyers in the insurance world We know that we have just scratched the surface of the things that affect your risks and your insurance program. Emerging issues such as climate change, changing codes and standards, cyber liability and ransomware are the reason we pursue our education, training, and product knowledge. We study the things that protect you. The advertising around insurance has not changed during this year. 15 minutes will save you 15%, only pay for what you need, and high-profile sport celebrity ad campaigns centered around low-price points. None of the mass market messages discuss the details around your risks or your circumstances. More people know that Geico has a gecko and Liberty has an emu than they know about the products they sell. This is intentional. By making insurance a commodity, it distracts you from the complexity of the product. If you are buying homeowners insurance, we will want to know a lot about you. Because there are different forms, products and enhancements that can protect the things you hold dear. We need more than an address, values and an effective date. Do you have any collectibles? Do you have jewelry or artwork? Do you serve on nonprofit boards? Do you need to cover recreational vehicles and equipment? Are your children away at school? As a business customer we need more than your declarations page. We want to understand your operations, facilities, and revenue streams. How is your product made, distributed, delivered and serviced? All of these can influence the scope and breadth of coverage that your need. How is your property protected? Are you getting the best insurance rate given protection, construction, and occupancy? Is your workers compensation costs in line with your experience? How is your fleet managed? Is your excess liability policy placed to pick up all of the proper underlying coverages? What is your home or building worth? The insurance you need may not be the sale price or loan value. If you have multiple buildings, are you getting blanket coverage? Are you getting an agreed amount policy? If you do not know what these terms mean, you would not think to ask for them. If you have a personal umbrella policy, how did you determine the limit? Does your umbrella cover all of your underlying policies? If you are not sure what this means, then you may have a significant gap in protection. You need an independent insurance agent to ask the right questions, find the right product and tailor your protection to your circumstances. This is not an easy, fast, or effortless process. Our web site has been updated to bring the Risk Insight articles to the relevant product pages. We can help you with your insurance program. Call us at 513-977-6860 or use the contact tools in our website to get a professional insurance consultation. We look forward to hearing from you.

A manufacturing risk with high piled rack storage had a fire pump to support their sprinkler system. The fire pump was tested and the insurance company reviewed the test results and determined that the pump did not reach the final test point. Since the pump “failed” its test, the insurance carrier recommended the pump be replaced. This would be a six-figure cost, and the carrier wanted an answer in thirty days. We received a copy of the recommendation letter and offered to review the situation. What was the Issue? The fire pump has three test points. Churn when no water flows, and the pressure should be 120% of the rated pressure Rated flow and pressure 150% flow at 65% rated pressure This pump failed to produce 150% flow and 65% pressure. The system ran out of water. Potential causes would be a degraded water supply from the city. We had access to the original plans and calculations. We reached out to the water department, and they confirmed that the test flows and pressures from the original installation were consistent with current conditions. We placed a pressure recording meter on the system for a week to verify that there were no significant pressure fluctuations. No issue was found. Another possibility was that the backflow preventer failed and was causing a restriction. The firm that tested the backflow devices was contacted and a second test was performed. The backflow device performed as designed. Comparing water pressures at the test hydrant and the intake of the fire pump showed a significant loss of pressure. These was enough pressure loss to be equivalent to 700 feet of pipe. The distance was less than 100 feet. We asked the city to bring out a locating crew to trace the underground pipe from the fire pump to the street. The locating crew identified a valve that was not on the plans between the hydrant and the city connection for the sprinkler system. The water department used a hydra - vac truck to expose the valve sleeve and found the valve was partially closed. A crew member recalled that the valve was used for repairs on the street within the last year, The cover was not returned, and the valve was buried. The fire pump test was repeated with the valve open, and the test was successful. Copies of the investigation and new pump test were provided to the insurance company who withdrew their recommendation. The Driehaus Difference Our agency has in-house expertise to help clients with complex risk control recommendations and issues. We publish articles for our clients on fire pumps  to educate our clients on risk management topics. We want our clients to have the tools and information to make the right choices. We do not take the "only pay for what you need" or "15 minutes will save you 15%" approach to insurance. We bring experience, market knowledge and technical expertise to the table for your benefit. We want to be your insurance provider. Call us on 513-977-6860 or reach out to us at www.driehausins.com .

Additional insured status runs in one of two directions: asking for additional insured status from someone or providing additional insured status to someone. Many clients ask to have another party named as an additional insured on their liability policy. This is often requested when one party engages another to do work for them. It may also be part of a lease or rental agreement or a special event at a venue. Are you being asked? If you are being asked to name another party as an additional insured , you now share your limits with that party. Your insurance policy will respond and protect both your liability and the liability for the other party that you assumed in the risk transfer process. The protection for your company is diminished, as you are sharing the general liability per occurrence maximum limit on your policy with the other party once they become an additional insured. The addition of another party to your insurance program should include the following: A written agreement should be in place that creates the requirement for additional insured status. Verbal agreements or handshakes may not be accepted by an insurer. Within this agreement, the degree of risk that is being transferred should be stated. See an earlier post concerning risk transfer basics to review the different levels of risk transfer. Are there any other insurance related provisions that you want to be part of the process? Waiver of subrogation, primary and non-contributory and notice of coverage lapse are common requests and should be reflected on the certificate along with the additional insured status. You need to confirm that your liability insurance policy has provisions for adding additional insureds. Your policy may have to be endorsed to provide this coverage to another party. Your policy may have a blanket additional insured provision to address this request. Consult with your Driehaus Insurance Group partner to be sure this coverage is present. Are you asking? If you are requesting to be named as an additional insured, you are expecting to have the other party’s insurance respond to a claim. This request should be part of a written agreement. This agreement should define the degree of risk transfer and any other issues such as whose coverage is primary and any waivers of subrogation that may apply. Your legal counsel should offer guidance on the appropriate wording. Once you receive the certificate from the party providing protection, be sure to review the certificate closely. Our article on certificates of insurance can provide details on this process. You want to be sure that you have the protection you were expecting. You should always ask what is driving this need? Is the concern you have actually covered by the insurance contract? Being named as an additional insured or naming someone as an additional insured is hollow protection if the loss sustained is not covered by insurance. Read before you sign remains the best risk transfer advice we can provide. Risk transfer , certificates of insurance and additional insured status are all parts of the risk transfer process. Driehaus Insurance Group manages these requests and requirements for our clients every day. Reach out to us at 513-977-6860 or www.driehausins.com for professional assistance.

What can your car tell me about you? Uses of Telematics Telematics is a powerful tool for managing fleet safety and vehicle maintenance. By measuring speed, braking, cornering and use of connected electronics while you drive a “ score” can be developed to indicate your relative safety as a driver. There is substantial research that use of driver behavior monitoring is a valid tool for risk reduction. Telematics in the transportation industry delivered positive returns on investment. Fleet operating costs were controlled by reducing extra trips and lowering maintenance costs from hard driving maneuvers. The safety improvements by monitoring driver behavior have proven to be a significant risk reduction tool. Parents can use telematics to monitor youthful drivers. Information on driving behaviors, trips and driver distractions can be a powerful tool in managing a young driver. The Technology The technology has also evolved. The original fleet telematics applications required installation of additional hardware and communication equipment. The next generation used the diagnostic port on your vehicle and sent data using the drivers’ cell phone or open wi-fi networks. The most recent versions use an app installed on the driver’s smart phone and a tag to link the phone to the vehicle. Each improvement in technology has lowered the cost of implementation. Apps are available to download from the Google Play store or Apple App Store. Telematics is a proven way to improve efficiency and safety for automobile operations. Any company or family should consider the benefits of this technology. Insurance and Telematics - What's In It For Me (WIFM) The insurance industry has taken notice of this technology and now promotes using this technology. Insurers want to monitor your driving habits and use this data to rate your policy. These programs were introduced as discount programs so safe driving would earn you a premium reduction. The insurance company also has its own WIFM calculation. It can verify both driving behavior and rating information using telematics. Insurance carriers believe that if the vehicles were properly rated for radius, use and garaging location, the auto line of business would be profitable. The telematics data can confirm all of the rating data. This includes miles driven, the location data confirms radius of operation. Telematics can also verify garage locations. The obvious payoff for the insurer is reducing collecting the correct premium and reducing losses. The latest application of this technology is “pay per mile” insurance coverage. You are charged only for the miles you drive. Most of these programs include a daily charge plus the per mile charges. The daily charge is assessed every day, not just when you drive. Other programs have a flat base rate and then mileage charges. If you truly drive a few miles, this may be of benefit. To access these programs, you must participate in some form of vehicle monitoring. Ironically, the increased cost of vehicle systems that allow telematics to work also increase repair costs. So, while accident frequency may be lowered, the cost per accident is trending upward. With lowered premium from discounts for telematics use, the bottom-line impact may be muted. This is driving the shift to premium increases being applied for poor driving scores. Telematics is no longer a discount only program. Check your carrier to verify terms and conditions. WIFM for consumers The most common incentive is the insurer offers a discount for your participation in the telematics program. Review the program rules as some programs can increase your costs if your driving behaviors fall outside of the program defined “safe” guidelines. What was once a pure discount tool is evolving into a rating tool. Be sure to read the terms and conditions carefully before you enroll. Read Before You Sign! Big Data Your insurance carrier is developing a rich database about your life, not just driving. Location data from the telematics device can tell where you were and how long you stayed there. This is rich data for marketing purposes. I turned on Google location services as a test and was routinely solicited for reviews and information about places my phone visited. Telematic systems gather the same data and much more. A review of one terms and conditions agreement for a driver monitoring program indicates that the insurer can monitor and collect data on time of day, driving location, distractions (cell phone use), speed, acceleration, braking and the use of other applications (music or video streaming) while the vehicle is in motion. The data collected is owned by the insurer and can be used as the insurer sees fit. It can be shared in accordance with the insurer’s privacy notice, another document that governs your relationship with the insurer that you probably have not read. One of the early adopters of this technology has since split off the technology company into a separate firm to make use of this the data. Your Choice You need to make the value judgment of privacy versus discounts. How much information you want to share with the insurer and their third-party partners is a consideration. The inherent return on investment for telematics is a solid number. It can be a powerful safety and risk management tool that can benefit you and have a positive return on investment without sharing your data with anyone else. The Driehaus Difference Driehaus Insurance Group can help you with identifying telematics programs for commercial and personal insurance programs. Reach out to us at 513-977-6860 or on the internet at www.driehausins.com .

It has been said that unless you understand history, you will repeat it. That proves true with loss experience. Lack of understanding and addressing trends mean they continue. Good risk management can stop this cycle and reduce your losses. Loss Ratio The most basic analysis is the loss ratio. This is the ratio between the incurred losses by the insurance carrier and the premium you pay for that coverage. Incurred losses include paid dollars, expenses and any reserves that are assigned to that claim. If your incurred losses are $50,000 and the premium for that line of business is $75,000, you would have a 66% loss ratio. As a rule of thumb, for standard market business, loss ratios over 55% are borderline unprofitable for the insurance company. Frequency / Severity The second level of loss analysis assigns a loss cause or loss type to each claim. By sorting on this factor you can calculate the frequency of losses. How many of each loss type as a percentage of the total losses You can also calculate severity,  the percentage of loss dollars associated with each loss type or cause. This will identify the loss types that occur most often and the most expensive loss types. The most frequent event is not always the severity driver. One truism in the insurance world is that frequency leads to severity. My analogy is playing the slots. You keep pulling then handle for small returns or losses hoping to hit it big. Numerous small losses may lead up to a very expensive event. Secondary Factors Once you have this first layer of data in hand you can enhance your efforts by using secondary factors that would allow greater drilling down. Some good secondary analysis points may include: Location if you have multiple locations Time of day Day of the week Department if applicable Body part, arm, leg, wrist, back, etc. Accident site – limited access highway, major street, residential area, parking lot   Other useful calculations can be ratios based on the following data points: Hours worked / number of employees Revenue or sales Miles driven Units sold for product liability Benchmarking Another level of loss analysis can be benchmarking your results against known standards. One common loss benchmarking is using your OSHA 300 data to calculate an accident incident rate for total cases and lost time cases. There is an online tool, https://data.bls.gov/iirc/ , to compare your data to national averages.   Other sources of benchmarking data can be National Safety Council Accident Facts, DOT crash data, Consumer Product Safety investigations and industry group publications. We used Consumer Product Safety playground accident frequency data to compare playground injuries at a client’s facilities to the national average. We had recommended playground safety surface improvements, and the current accident frequency was similar to the incident rate that prompted the CPSC playground guidelines. Loss analysis supported the recommendation to improve the safety surfaces. Data outside insurance loss runs Understanding the structure of the insurance program can influence the source of your loss data. If there is a large deductible or Self-Insured Retention for a given line of business, you need to find the data for events that are not included in insurance company loss runs.   Look for accounting ledgers for uninsured losses, warranty payments, courtesy payments. For non-monetary events look for incident reports, customer complaints or exception reports from processes. These “near miss” events can be trended to identify potential loss causes that have not appeared on the insurance records. Available tools All of this can be accomplished within Excel. Using the graphing functions will allow display of the data for visual management systems. Follow up You can examine controls that would affect the frequency or severity drivers.  Knowing the current frequency and severity data will allow you to repeat the loss analysis at a later date to assess if the implementation of the controls is effective. The Driehaus Difference We recognize the impact of effective loss analysis on improving your business results. We use this data to highlight your initiative-taking efforts to potential insurance carriers to help secure the best possible terms for your insurance program. We help you get started on this process and help you with managing the information to leverage control improvements. Realizing the goal of accident reduction will often translate into premium savings or program enhancement. We want to be your insurance provider and risk management consultant. Call us at 513-977-6860 or contact us on the internet at www.driehausins.com

The recent increase in home values on the market has many homeowners looking at the value of their homes. One of the most important decisions to be made concerning your property insurance is the values that you set for the insurance policy. This is a topic that is challenging because some of the parties requiring insurance only require limits to protect their interests, not your interests. The question you need to ask yourself is straightforward. What amount of money do I expect to recover in event of a loss? The best place to begin is to define the most common valuations. Replacement Cost - RC This is the cost to replace the property with like kind and quality, with no regard to depreciation. What would it cost to rebuild the building from scratch with new materials? This seems like an easy question to answer until you factor in issues such as historic trim, any restrictions on the building by local zoning or historic commissions or your desire to replicate certain architectural features that are hard to replace or replicate. If your property has unique features, materials or intricate workmanship, you need to consider these in setting its value. For contents be sure to consider fine arts and collectibles separately. A standard property policy would replace the frame and a blank canvas, not the artwork. You need a fine arts floater for this exposure. Replacement cost coverage is required for Fannie Mae and Freddie Mac mortgages. Lack of replacement cost coverage can be an impediment to securing or refinancing a mortgage. Functional Replacement Cost Some carriers will offer functional replacement cost for a building they deem to be obsolete. If you have an older home or property, you may find this being offered. It essentially means that the insurer will replace damaged property with materials that are similar in function, but not like kind and quality of the original materials. With a partial loss this can mean loss of matching materials and a repair that is obvious. For a total loss your building would be replaced with the same area, but the construction materials may be very different. Selling Price This is easy – what did you pay for the property? If the property is used to secure a loan, the lender may require insurance at a limit that equals their interest in the property. If you are getting a good deal on the property, the selling price may be less than the replacement cost. The lender’s interest is protected, but you may have a gap. Most mortgages have provisions for the owner to carry replacement cost coverage, but the primary interest of the lender is that the value is high enough to protect their interests. Market Price Price of similar properties that are being sold to a willing buyer. Market price can be influenced by economic times, location, style of the property and other features that make the property easier or more difficult to sell. During an upswing in property prices, the market prices can be inflated by demand. Conversely in a period of lower demand, you may be able to buy a property for less than expected. Market price is more volatile than other valuations. The recent hot real estate market has inflated purchase prices. Actual Cash Value - ACV This is the value of your property adjusted for depreciation. Age, condition and upkeep all factor into this value. There are two variables, the starting point of the valuation, and the amount of depreciation applied. To understand this process, you must know both variables. The degree of maintenance and upkeep of the property can influence the depreciation. Some insurers apply a straight line depreciation that leaves older properties with limits that could be lower than expected. this valuation can also be applied to parts of your building such as the roof. For property with insurability concerns, ACV may be the only terms offered. ACV is also being used by some insurers for roof coverage when they feel the roof is old or not in good condition. ACV can be an issue if you are using Fannie or Freddie as your mortgage source. You may find that the mortgage holder will not accept any ACV coverage on the property they have a loan against. Reconstruction Cost This is a favorite of insurance companies. Since most property losses are partial losses, the cost to repair is matching new to old. If you have ever remodeled a room, you know that getting new cabinets to match up to existing walls and ceilings can be a time-consuming process. Many property insurers use this value as the default on the value estimators provided to their agents. This often becomes the replacement cost figure on your policy. It can be up to 30% higher than new construction costs. What is the right number? What do you need to recover? Lower valuations may save money on premiums, but if the amount you recover at time of loss is lessened by the valuation, it was probably not the best decision. The Driehaus Difference You are our customer. We want to understand your needs. If we and you both have a clear understanding of expectations, we can help you select the right values for your policy. This is not a process that can be done with an online chatbot or a scripted phone call. Reach out to us at 513-977-6860 or via www.driehausins.com to get a professional insurance consultation.

As summer arrives the season for road trips is upon us. As you plan your trip, take a few moments, and consider whether your vehicle is ready for the trip. Tires should be inspected for proper tread depth and inflation. If you have tires with slow leaks, have them repaired before you are stranded alongside the road. Tires that have bulges in the sidewalls or cracks visible should be replaced. Check your spare tire, jack and tire iron are ready. Take a moment to review the directions for use and proper jack placement. Check all of your fluids. Have the fluids been changed recently, and would a change be required on your trip? It is easier to do the fluid maintenance before you leave instead of trying to find a vendor along the road. Check the condition of your belts and hoses. It is easier to replace them now than have a breakdown. Check your cooling system and flush the system if it is due for this service. Check your air filter and change if needed. Have you changed your cabin air filter? If you are going to be in the car for a long trip, having fresh filtered air is refreshing. Check all lights, including headlights, taillights, turn signals and emergency flashers. Refill your windshield washer reservoir. Have some window cleaner and towels in your car for bug storm removal. Check for paperwork, registration, insurance card and any roadside assistance numbers. Do you have an atlas or paper map? If GPS or cell service is not available, you need a second method of navigation. Use this as a teaching moment for those who have not used maps. Clean out your car so you can find everything quickly. Put a trash bag in the car to collect debris as you travel. Plan your routes to allow for adequate rest periods. Fatigued driving can ruin your vacation. Vacations are exciting and you should be prepared for the unexpected. Having a first aid kit, fire extinguisher and other breakdown supplies in the car can relieve the uncertainty of the trip. Other planning steps beyond the vehicle... When you leave town ask if your police department can do vacation checks on your home. Many agencies offer this service, and it can help secure your property against burglary. You can use timers to turn some lights on and off while you are away. With smart home technology, you can do this with your smartphone. Check any alarm system for proper operation and verify the contact numbers for your alarm system. Is there an alternate keyholder that can respond if needed? Consider turning off your main water valve when you leave home. This would prevent a plumbing failure from flooding your home while you are away. The Driehaus Difference You work hard and need a good vacation to relax and recharge your energy. We work to protect you from the unexpected with an expertly crafted insurance program. Reach out to us at 513-977-6860 to discuss your needs or ask us a question. You can also use our website, www.driehausins.com  to contact us at any time. We want to be your insurance provider.

Outdoor cooking safety Outdoor cooking and equipment have evolved into equipment that is more complex than the charcoal grill I grew up with. As the equipment type, fuels used and size and scope of the installation have grown, there is a need for better understanding of the risks presented and how to control the hazards. Fuel Types and related hazards are the first consideration for outdoor cooking Fuels can be broadly grouped into two classes, Gas fire equipment and solid fuel equipment. Both types generate carbon monoxide (CO) and should only be used in an outside environment or in properly ventilated areas with an appropriate chimney or vent system.   Gas fired equipment is supplied with LP (propane) or natural gas. Both are flammable gases with the major difference being that LP is heavier than air and will accumulate in low lying areas while natural gas is lighter than air and more easily dissipates. Natural gas can be trapped by structure and accumulate in this fashion.   Both types of gas are ready to ignite with a low energy spark or ignition source. This makes then easy to use and also easy to create a fire hazard.   Since LP gas is often supplied in portable containers, there are guidelines around storage and maximum quantity allowed in a building. Natural gas is piped into the building and all gas fittings and piping should be installed by a qualified gas fitter.   Solid fuels can be charcoal, wood pellets, or wood in log form.   These fuels are not inherently dangerous and require a significant energy source to ignite. The most prominent hazard is the generation of ash products that must be safely removed. Hot ashes that are improperly disposed of are the source of many structure fires.   A less common fuel is electric powered equipment. The hazard from the heating is the same with the other fuels, but there is an added exposure to electrocution and short circuits that must be considered. Equipment Purchasing Outdoor cooking equipment has a wide range of products and price ranges. When you are looking to buy equipment the first question should be if that equipment has a UL listing for the type of equipment being purchased.   Outdoor Cooking Gas Appliances — should have a listing that indicates compliance with ANSI Z21.58. This voluntary standard has safety provisions to address the hazards pres4ented by the use of a flammable gas as fuel. Outdoor Decorative Gas Appliances — (AKA Fire pits) have their own standard for safety, ANSO Z21.97. Equipment that complies with this standard can be identified with a UL listing for this device. Charcoal Equipment — does not have its own ANSI standard, but there are portions of the ANSI Z21.58 standard that can be applied to charcoal grills. Wood Pellet Grills — have heat and ash hazard as well as electrical hazards and mechanical hazards related to the pellet delivery auger. There is a recently issued UL standard that addresses this type of equipment. UL 2728A  These requirements apply to forced or natural draft, automatic feed, pellet fuel-burning cooking appliances rated 120 V or less for residential use and 250 V or less for commercial use. Electric Barbeques — are another popular option for outdoor chefs.  IEC 60335-2-78 Ed. 2.2 b:2019 , Household and similar electrical appliances - Safety - Part 2-78: Particular requirements for outdoor barbecues, deals with the safety of electric outdoor barbeques with a rated voltage being not more than 250V. Beyond this standard for the devices, there are National Electric Code (NEC) rules on proper power supply, ground fault protection and wiring specifications that should be followed by a qualified electrician making the installation. Installation of equipment All of the equipment has specific installation requirements that should be followed. They are found in the owner manual or installation documentation from the manufacturer. It is best practice to review this before you buy to ensure that you can accommodate the installation requirements. There may be permits required for gas piping, plumbing and electrical connections for your new kitchen. Be sure to secure these permits and the associated inspection reports.   The proper clearance of combustibles is found in the installation guidelines for every product. These distances can vary widely from manufacturer to manufacturer of the same equipment. Combustibles are exterior building surfaces, flooring under the appliance and vegetation near the equipment.   In addition to clearance to combustibles there can be clearance requirements for gas meters, electrical meters, and electrical panels.   Locations related to ventilation can be specific to distance from windows and any fresh air intake for your HVAC system to prevent carbon monoxide from entering the building. Maintenance and use All outdoor cooking and fuel burning equipment requires routine maintenance to function properly. Some equipment is not appropriate for use in rain or snow. Others have wind speed limitations to prevent the flame from being influenced by the wind.   If you are in a multifamily occupancy, verify that use of open flame cooking appliances is permitted. Many homeowners’ association restrict the use of this equipment as a fire safety measure. Most multi story, multi family structures have restrictions on use of these devices as well as limitations on LP fuel quantity permitted in the building. In areas subject to freezing temperatures, be sure to properly winterize any part of your kitchen subject to freezing damage. Be sure the water connection to the building is via a frost proof connection. Insurance considerations If you have added an outdoor kitchen to your property, have you added the values to your policy? Most valuation tools would not catch this addition and you could be faced with claim handling difficulty if a large value has not been included in your policy.   Being sure that your equipment meets the appropriate standards, the installation and maintenance and use are consistent with the manufacturer’s information will offer you protection against claims related to negligence in the event of a claim. Compliance also reduces the chance an insurer can deny coverage based on a poor installation or poor-quality equipment that presented an unknown or uncontrolled hazard. The Driehaus Difference We enjoy a good barbeque as much as anyone and some of our staff are surprisingly good pitmasters. We also consider ourselves to have advanced skills in controlling risk and helping our clients make the most of their outdoor spaces. We ask that you call us at 513-977-6860 or contact us via our website www.driehasuins.com  for any questions or assistance. We want to be your insurance provider.

What You Need to Know about Insuring a Classic Car What makes a car classic? Age – many vehicles over 25 years old are considered classic. Since at 25 years old a stock vehicle has been fully depreciated, you need a different insurance product to recognize the value of this older vehicle. Make / Model – If the manufacturer has significantly changed or discontinued the vehicle in question, it can be considered an instant classic. Recent examples may be Dodge Chargers and Challengers that are no longer being produced. Corvettes and other sports cars with specific models may make the car classic for a collector when the models change. These vehicles have values that defy standard depreciation schedules. Drive train – A high performance engine, transmission, and rear end set up can make a car classic by making most insurers reluctant to provide coverage. Since these modified vehicles may have potential racing use, they fall outside of the appetite for many insurance companies. Valuation on a highly modified vehicle falls outside the scope of many insurers guidelines. Customization – Hot rods, rat rods, and low riders are some of the various types of modified vehicles that defy conventional valuation tools. A vehicle with a mixture of frame and body parts from different manufacturers or years may also be difficult to pigeonhole in a specific make/model description. As a result, these vehicles may not be insurable under standard policy terms.  Why consider classic car insurance programs? Value recognition  – This is the most common reason for classic car insurance. If you enjoy watching car auctions on television, a 1970 Chevrolet Chevelle that brings $110,000 at auction would be virtually worthless with standard depreciation. Since the standard personal auto policy uses “Actual Cash Value” which is the depreciated value of the vehicle, as the basis for adjusting claims, the owner of this $110,000 vehicle could never get a settlement close to the sales price. Use of the vehicle  – A standard auto policy will assume the vehicle is used as a daily driver. Most classic and collectible cars are not daily drivers. The lower use is a significant factor in the cost of coverage. Loss adjustment  – At time of loss, a standard carrier may use a third-party inspection service to look at vehicle damage. This third-party inspector will not have the necessary experience and education to inspect, assess and adjust a claim for a classic or collectible vehicle.  Staff inspectors who look at daily drivers will also lack the experience needed for this type of vehicle inspection and damage assessment. Repair process  – The collectible or classic car will not be repaired at a body shop or repair center that is part of the national network used by insurance companies. Standard market body and paint shops are not prepared for the custom work and finishes that are on most classic and collectible vehicles. Repair parts  – Most auto insurance policies allow the use of aftermarket, remanufactured or salvaged parts if they are deemed “like kind and quality or equal fit and finish” by the insurance company.  Use of parts other than Original Equipment Manufacturer (OEM) may not be suitable for classic or collectible cars. If parts are not available, then restoration work to repair the original damaged parts or replicating those parts may be needed. Diminution of value  – The Carfax commercial hypes the diminution of value related to accident damage to a car. This is even more critical when work from a specific shop cannot not be replicated as that shop is no longer in business, or the parts for that vehicle are simply not available. Swapping out engine or drive line parts that disrupt the “numbers matching” status of a vehicle is not an issue standard insurance considers. For a classic car owner this may be a deal breaker.  Many standard insurance policies may exclude any diminution of value claims. What to look for in a classic car insurance program Valuation - The primary difference is that classic and collectible cars are written on the basis of agreed value. This value is not subject to depreciation and is agreed upon by the policyholder and the insurance company. Most classic car markets have their own in house valuation experts to review your submission and reach the agreed value with you. Having this valuation option is considered a basic requirement for these programs. Use restrictions  – Most classic car policies require that you have a daily driver.  The travel to car shows, some personal use is permitted. The basis for the requirement that you have a daily driver is the discount offered for the vehicle not being on the road routinely. Classic car insurance may have requirements that the car is in a garage and that when traveling to shows the car is protected with a car cover. Make sure you understand any use restrictions or storage requirements in the program. Enhanced roadside assistance  – The classic car insurers have their own network of roadside assistance providers that use flatbed recovery vehicles, soft straps, and tie downs. This is to protect your classic vehicles finishes and take care of its frame and suspension. Determine if this if available and how important this is for you. Claims and restoration management – Classic car insurers have dedicated staff adjusters and restoration consultants to work with you to get the proper repairs, collision, and refinishing services for you. Does the insurer offer the right services and service network for your needs? Restoration and repair are very distinct processes. Fleet coverage  – Some classic car carriers can insure your classic car and your daily driver. You would not need separate insurance policies. Some standard market companies offer classic car endorsements to their policies. Consider the standard market carriers ability to provide some of the services mentioned above if you choose to use an endorsement for your classic car. The Driehaus Difference We can help you find the right policy to protect your classic or collectible car.  This is not an “only pay for what you need” situation. If you are not comfortable with the unique insurance concerns for these vehicles, you can be in for an unpleasant claim settlement. Call us at 513-977-6860 or contact us via our website driehausins.com  to get in touch with an expert to help you. We want to be your insurance provider.