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Subrogation is the process where an insurance carrier stands in the place of the insured and pursues a claim against a third party to recover claim payments that the carrier made to the insured. The underlying theory is that if the damages were caused by that third party, the insurer is entitled to recover those damages. Insurance companies have dedicated units to pursue subrogation and the recoveries are an important part of the finances of the carrier. Recoveries can benefit the insured by reducing their loss dollars related to a claim. There are times when the insured and a third party agree to not subrogate claims. This is often seen in real estate transactions and in some service agreements and contracts. This is often presented as a routine item and one that requires no action on behalf of the party signing this agreement. There are some items to consider when this is presented to you. Bilateral Agreement? Does the waiver of subrogation apply equally to each party? Do you both have the same amount of risk assumed in this agreement? If the waiver is unilateral in favor of the third party, what benefit are you receiving for assuming the additional risk? Without subrogation the cost of damages that are the fault of the other party will not be recovered. Carefully read the terms of the contract to determine if the waiver is bilateral or unilateral. Insurance Company Agreement Generally, insurance companies do not bar coverage when an insured waives it own right to recover against a third party. The insurance company may not agree to waive their rights to subrogate as it would violate the principle of indemnity. You do not want to find out that the carrier has language in their policy that restricts coverage in the event of a waiver of subrogation. To clarify this question, you can ask that the policy be endorsed with a waiver of subrogation endorsement that details the parties that the insured has agreed to waive their right to subrogate claims against. As this closes a potential recovery avenue for the insurance carrier, there may be a charge for this endorsement. The Driehaus Difference We have the knowledge of carrier coverage forms to know when a waiver of subrogation becomes an issue for a given insurance company. We can also help you review contracts, leases, and agreements to see that the proper insurance coverage is in place to satisfy those contractual agreements. This is not a topic that is easily covered in an online form. If you are not aware of the issues around waiver of subrogation, you will not know you need to confirm policy coverage. This is where a professional insurance advisor is your best protection. Call us at 513-977-6860 or contact us vis our website www.dreihausins.com to get professional assistance.

Fire extinguishers are present in all commercial occupancies and in most homes. Commercial vehicles are also equipped with portable fire extinguishers. Despite their widespread presence, most people have very little understanding about these first aid firefighting tools. If you need a fire extinguisher, you need the fire department! If a fire alarm system is present, activate the alarm and summon assistance. Evacuate the premises and conduct a head count to account for all occupants. If no alarm system is present dial 911, evacuate the premises and conduct a head count. All fire trucks have reverse, they do not have warp speed to move back in time to when you should have called. Classes of Fire Not all fires are created equally, so the extinguisher must be matched to the type of fire that is burning. The chart below shows fire classes, typical fuels and the pictograms used on fire extinguishers to identify their appropriate use. You should be familiar with the types of fuel present in your workplace and home. Compare the fuels present to the fire extinguishers present to be sure you have the correct extinguishers. The most common fire extinguishers are multipurpose dry chemical fire extinguishers. These are compatible with Class A, Class B and Class C fuels. There are special extinguishers for combustible metal (Class D) and for commercial cooking exposures (Class K). These extinguishers are for these fuels only. Class K extinguishers are used when a wet chemical fire suppression system is present in a kitchen. This agent is compatible with the wet chemical agent in the kitchen fire suppression system. Other types of extinguishers may degrade the effectiveness of the wet chemical system. Using a Fire Extinguisher Safely We will repeat the first rule of fire extinguisher use – Call the fire Department! The second rule is to be sure you have a clear escape route! If you have any doubts, evacuate! Inspection and Maintenance Fire extinguishers should be visually inspected monthly to confirm the pressure is adequate. An annual inspection by a professional service is needed to evaluate the shell and to check for any needed shell testing. Extinguishers are a pressure vessel and require periodic shell tests for integrity. Number and Spacing of Extinguishers The National Fire Protection Association publishes NFPA 10 the Standard for Portable Fire Extinguishers. This standard defines each location by hazard type and defines the proper size and distance between extinguishers. You can access this standard for free at www.NFPA.org The Driehaus Difference Fire extinguishers remain a top risk control recommendation from insurance carriers. Contact us to help you understand the details behind this often-overlooked tool. We suggest you ask your local fire department if they can help you with hands on extinguisher training. Your fire extinguisher service firm is another source of training. Contact us at 513-977-6860 or via our website www.driehausins.com for any assistance you may require.

The recent announcements by State Farm and Allstate that they have temporarily suspended writing new property insurance risks in California was made quietly. Jake from State Farm was not featured in this message nor was Allstate’s “Mayhem” character. The shift to pause writing property insurance did not affect the appetite of the carriers for the more profitable personal auto insurance policies. To be fair State Farm and Allstate are not alone in having second thoughts about California property, other carriers have opted for price increases versus suspending new business acquisition. The factors cited by the carriers in making this decision include climate change challenges, higher reinsurance costs affecting the entire insurance industry, and global inflation. These factors are not unique to California. Wildfire Frequency A report from the National Fire Protection Association in 2018, Brush, Grass, and Forest Fires, indicated that there was an average of 840 brush grass and forest fires reported every day. This accounts for 23% of the responses for local fire departments. This type of fire is generally small in size but 6% of all fires consume more than 10 acres of land. 12% of forest fires spread over 10 acres. This is based on data from 2011- 2015 The Southeast region that includes Kentucky accounts for 53% of all wildfire incidents. The West accounts for 20% of wildfires. The Northeast accounts for 27% of the incidents. Recent incidents around Natural Bridge State Park in Kentucky are a local example of the hazards. On June 9, 2023, there were wildfires burning in Arizona, Florida, Idaho, New Mexico, Pennsylvania and Washington. Canadian wildfires have contributed to air quality emergencies and flight delays across the Northeast. This data is for the period of January to June 9 in each year. Wildfire Data and Insurance Underwriting The level of data available about the wildfire problem has grown immensely. Models about fire growth and hazards were once limited to the west Coast and used by regional agencies to plan responses and mitigation efforts. As fire problem grew, the need for data also grew and the United States Government stepped up their efforts to provide data. www.wildfire.gov is a key site for data on the wildfire exposures. Companies leverage this data to create “Wildfire Scores” that can be used by insurance companies to estimate their exposure. As the use of these scores has spread across the country, the knowledge about how they are developed and what they mean has become more opaque. The use of “scores” is of particular value to insurance carriers. They can use the scores in their pricing and risk selection models that have replaced many traditional underwriting decisions. Reinsurance costs Our report on 2023 Property Insurance Trends discussed the trends in catastrophes that affect property insurance. Catastrophes no longer are geographically centered on hurricanes and earthquakes. Floods, wildfire, hail, drought, and flood all impact this part of the insurance market. As the wildfire exposure is more frequently recognized and documented, the reinsurers will also use those data elements in forecasting their expected loss number and related premiums. Inflation The cost to rebuild has been a significant factor in insurance company pricing decisions. Double digit construction inflation has been the norm since the pandemic. This additional pressure means that wildfire losses are also impacted by the construction inflation. The Driehaus Difference We have observed underwriting decisions based on wildfire exposure creeping into the local market. We monitor these underwriting trends and use that knowledge to help our clients find the right markets for their property insurance. Call us at 513-977-6860 or contact us via our website at www.driehausins.com

As summer rolls on the heat index numbers will creep into the danger zone for heat stress emergencies. Heat stress is an equal opportunity hazard that affects anyone who is exposed to excess heat and is being physically active in that environment. Heat stress is an occupational hazard, but the exposure extends to any group exposed to high heat conditions. This includes family picnics, youth events and outdoor festivals and celebrations. Some groups are more susceptible to experiencing heat stress. These groups include underlying medical conditions, lack of physical fitness, previous episodes of heat related illness, alcohol consumption and certain medication. People who are new to being in warm environments are at increased risk of heat-related illness. Recognizing Heat Related Illness In most cases heat related emergencies are a progressive set of symptoms. The table below shows the type of heat related illness and the corresponding symptoms starting with the first stages of the exposure. First Aid for Heat Related Illness First aid for heat-related illness involves the following principles: Take the affected person to a cooler area (e.g., shade or air conditioning). Cool the person immediately. Use active cooling techniques such as: Immerse the worker in cold water or an ice bath. Create the ice bath by placing all of the available ice into a large container with water, standard practice in sports. This is the best method to cool people rapidly in an emergency. Remove outer layers of clothing, especially heavy protective clothing. Place ice or cold wet towels on the head, neck, trunk, armpits, and groin. Use fans to circulate air around the worker. Never leave a person with heat-related illness alone. The illness can rapidly become worse. Stay with the person When in doubt, call 911! Confusion, slurred speech, or unconsciousness are signs of heat stroke. When these types of symptoms are present, call 911 immediately and cool the person with ice or cold water until help arrives. Prevention of Heat Related Illness – Rest water and shade Water Be sure to provide cool water drink. Proper hydration is essential to prevent heat-related illness. For those working two hours or more, also provide access to additional fluids that contain electrolytes. For short jobs, cool potable water is sufficient. Encourage your group to drink at least one cup (8 ounces) of water every 20 minutes while working in the heat, not just if they are thirsty. For events or activities that last more than two hours, you should provide electrolyte-containing beverages such as sports drinks. People lose salt and other electrolytes when they sweat. Substantial loss of electrolytes can cause muscle cramps and other dangerous health problems. Water cannot replace electrolytes; other types of beverages are needed. Water or other fluids provided should not only be cool, but should also be provided in a location that is familiar, easy to access, and in sufficient quantity for the duration of the event. Do not rely on feeling thirsty to prompt them to drink. Remind people to drink on a regular basis to maintain hydration throughout the activity. Rest Breaks should last long enough for people to recover from the heat. How long is long enough? That depends on several factors including environmental heat (WBGT) and the physical activity level, as well as the individual personal risk factors. The location of the breaks also matters. If people rest in a cooler location, they will be ready to resume activity more quickly. Breaks should last longer if there is no cool location for people to rest. Shade Workers should be given a cool location where they can take their breaks and recover from the heat. Outdoors, this might mean a shady area, an air-conditioned vehicle, a nearby building or tent, or an area with fans and misting devices. Indoors, workers should be allowed to rest in a cool or air-conditioned area away from heat sources such as ovens and furnaces. The Driehaus Difference We recommend that you visit the OSHA website for more information about heat related illness. You can reach us at 513-977-6860 for more insurance and risk management information. Visit our website at www.driehausins.com for additional information and contact points.

Most homeowners’ insurance policies focus on the replacement value of the home itself. There are numerous tools used by insurance companies to estimate the replacement cost of a home. Many of these tools are now being enhanced with artificial intelligence to allow satellite images and orthogonal images to determine the number of stories, square footage, and complexity of the foundation shape as key elements for estimating values. With the recent high inflation trends for construction costs, these efforts are a primary focus of the insurance companies. Our article on Insurance to Value details this process. Contents values are a second thought in many cases. The insurance company assigns as percentage of your building value as contents values. There is no data gathering effort to validate these numbers. To shield themselves against litigation around inadequate values, many insurers now banket the building and contents into a single limit. Since the vast majority of claims are partial losses, this means that any value issues are minimized. This process is considered user friendly, and most people don’t give it a second thought. You see a large number and assume that all is covered. Special Limits of Liability Within your homeowner insurance policy there are a number of items in your contents that have a sublimit. These are limits of coverage that limit the dollar amount of coverage for specific types of property. The table below shows limits of coverage for a typical homeowner policy. You should carefully evaluate your personal property to see if the above sub-limits are adequate for your personal belongings. If you have more values exposed to loss than the policy provides, you need to ask for additional coverage. Form Differences Also look carefully at which form is used for your homeowner’s policy. The coverage offered vary depending on the perils covered for any of these items. We have written articles on the differing policy forms and the terms that affect contents coverage in our Homeowner forms article and our article on Jewelry Floaters. The difference is often between coverage for loss and mysterious disappearance or coverage for only theft for jewelry, firearms and other property with special limits of liability. Value Creep There is a tendency in the insurance business to treat the floater policy limits as a “set it and forget it” type of number. The flaw in this approach is that people tend to accumulate more stuff as times go past. It is not uncommon for a single jet-ski to have a second join the family. New pieces of jewelry are acquired, and any number of other collectibles are added. The insurance companies do not help with this process as they do not attach the actual list of items to the policy or renewal documents. You must remember additions and deletions and communicate that to your agent. Inflation also affects these items. A recent interaction with a customer revealed that over the past five years the value of the firearms in his collection has increased by 30%. Additional jewelry acquired added 20% to the limit. Accurate values for these items are critical as many forms have a specific limit per item, the value you specify. If the value of the item has appreciated, you need to raise your item limit of coverage to match that higher value. Inventory One of the most valuable processes you can do to protect yourself against loss is to have an accurate inventory of your personal belongings. Cell phone cameras and video have simplified this process. You can go through your home and record the overall contents of the room, and then record the contents of each drawer, shelf, or closet in that room. Save this to your cloud account so you can easily retrieve it when needed. By making this record, at time of loss you have a tool that can help you recreate the contents and have a record of what was present. If you want to go into greater detail, there are Excel templates that can be used for building a home inventory. The Driehaus Difference We understand that every home is different. The replacement costs can vary and the need for content coverage is no different. If you are not aware of the limits specified for certain property, you would not know you need to schedule this coverage. We know these limitations and will ask the second level questions that will tailor the coverage to your needs. We take the time to get to know you and to understand how insurance fits in with your life. Call us at 513-977-6860 or contact via our website, www.driehausins.com. We look forward to help you with your insurance needs.

This question has been the root of more discussions in the property insurance industry than you can imagine. Property insurers are focused on making sure that building valuations are current and meet their requirements. There are a number of tools available for use by insurers. Our article on Insurance to Value discuss the process and the data used. We identified in our article on that values were going to be a key evaluation point for carriers. The second part to your property insurance program is the value established for Business Personal Property which includes all the contents of your building. There are no recognized tools for setting these values which often leads to insurance limits that do not reflect the true value of your business contents. Here are some thoughts to consider when evaluating the limit you choose for contents coverage. Asset Log Data Many firms have an asset log used to calculate depreciation on equipment, tools, and fixtures. This is an excellent starting point for identifying the items that need insurance. The question is are the values you report to the insurance company the actual replacement costs or the depreciated costs? If the terms of your policy are replacement cost coverage, the value should be replacement cost. If you have a policy with actual cash value terms, then the depreciated values are probably accurate. Recognize the limitations of your asset tracking system. Some firms establish a minimum value to report on the asset log. Items below this value are not in the system. This may leave a large number of items that are not on your asset log. Contractual Obligations If you take on the care custody and control of customer goods, fixtures, tooling, or raw materials, you may have a contractual obligation to provide property insurance for these items. This value should be shown as “Property of Others” on your insurance policy. Read your contracts carefully to see if there are specific deductible or coverage form requirements. In some cases, it is easier to have these values on a separate property floater so you can easily track the costs and manage any schedule of values related to these contractual requirements. A second source of insurance obligations can be your leasing or renting equipment from others. These contracts typically require insurance protection for the leasing or rental agent. Replacement time frame The time it takes to replace items should be considered during the review of your contents. This can be a factor in determining your exposure to business interruption if key equipment has a long replacement time. Would you replace existing equipment with the same type, or would you change to an alternate technology? Some firms believe that the replacement equipment will be less expensive, so they can carry a lower value. This may work for a total loss, but most losses are partial losses so the equipment would be repaired versus replaced. If you choose not to repair the damaged equipment, you’d only receive an actual cash value settlement from the insurer. This depreciated amount should be compared to the cost of the new technology. Contents Creep Most firms acquire their business personal property over time. While large purchases make the asset log and depreciation schedule, many items are added, and no formal reconciliation is done to catch those values. Doing an inventory of your contents is a significant investment of time and effort. We suggest that you do this process on a scheduled basis at least every five years. This allows a reasonable time frame for additions and deletions to be in the memory banks. If you are new in business this is more important as your business personal property may grow every year. Also consider equipment and tools that are off premises at job sites or on or in vehicles. Equipment that is assigned to remote workers should also be considered. You may need a floater policy to cover values that are away from your premises. The Driehaus Difference We want to be sure you have the right coverage, the right values, and the right forms for your insurance program. If you are not knowledgeable in the difference in valuation clauses, location versus floater policies and loss settlement clauses you need an experienced insurance expert to guide you. Our staff has decades of experience, and we want to share our knowledge and expertise to make your insurance program the best fit for your business. Contact us by calling our office at 513-977-6860 or use any of the contact tools at www.driehausins.com

Recent flood events in Eastern Kentucky and the West Coast have returned flood headlines to the front pages of every media outlet. These events prompt many insurance buyers to evaluate their policy coverages and ask if they need flood insurance. Flood is not a covered peril in property policies. The typical homeowner’s policy or commercial property policy excludes coverage for flood. Unless you as the policyholder request coverage, it will not be included. Your lender may require you to purchase flood insurance if your property is in a Special Flood Hazard Area. These areas are defined by Federal Emergency Management Agency (FEMA) maps that support the National Flood Insurance Program (NFIP). Compulsory flood coverage is placed to protect the interest of the lender. Flood Maps can be misleading and outdated. It is comforting to look at a flood map and see that your property is above the Base Flood Elevation (BFE) as defined by the flood model. Newer flood maps have elevations with decimals, so the impression is that the data is precise. You can request a Letter of Map Amendment (LOMA) to remove your property from the flood zone by showing that it is above the BFE. Elevation above the BFE exempts you from compulsory flood insurance. This precise measurement process would suggest that the flood hazard is clearly defined. That is simply not the case. Over 30% of flood claims come from areas outside the mapped flood hazard zones. There are several reasons for this variance. 1 — The flood data depends on accurate elevation data. According to FEMA the best-case elevation data has a 9 to 13 inch accuracy range and the worst case has a 3 foot 2 inch to 4 foot 9 inch accuracy range. This level of elevation uncertainty means that the elevation numbers used have a significant range of variability. Being a small distance above the BFE may not eliminate the risk of flooding. 2 — The flood model is a point in time model. Changes in the topography, level of development and growth of impermeable surfaces on the flood panel will affect the accuracy of the model. In many cases upstream development with increased paved surfaces & additional roofs will have a negative impact on the flood model. The age of the flood panel is a key part of your evaluation. 3 — The flood model was based on a point in time estimate of precipitation. Recent temperature trends suggest that the atmosphere can hold more water vapor as the temperature has risen. This can cause heavier rainfalls in shorter periods of time. This can create a water input into the system that was greater than the design flow. Additional flooding is the result. 4 — There are different flood models that are acceptable to FEMA. Competing flood models can have dramatically different results. Flood maps are part of a political process. Depending on your specific jurisdiction, the flood model can vary from worst case to a best-case predictions. Unless you participate in the adoption of the flood panels, you will not know this answer. To address some of these variables the State of New jersey has proposed adding two feet to the flood elevation data in their state. This amount would help address the inherent accuracy issues as well as increased storm inputs and development changes. This proposal is being met with opposition from many sources. Data Sources If the FEMA flood maps are not the best evidence of hazard, what are the choices available to the insurance buyer? A hazard tool is available that offers some guidance. Visit RiskFactor.com to get a location specific hazard analyses for flood, wildfire, and extreme heat. You can create an account to access a single location report for free. Unfortunately, the best data sources are behind paywalls and the costs to get location specific data is $100 per report. This places the data outside the reach of most policyholders and insurance companies. The best source of information may be the local emergency management agency, fire department, public works, or stormwater management agency. They may have historic records regarding flood events that have occurred at your location. Many flood events are not insured events, so insurance data may be incomplete. Google Earth has add ins that import FEMA data. You can use these as well as elevation tools within Google Earth to assess flood hazards. The Driehaus Difference We know that flood events occur outside of the flood hazard zones mapped by FEMA. We evaluate the flood elevations, the range of accuracy for mapping and the age of the flood maps to make our estimate of the hazard and our recommendation for coverage. We suggest you order a RiskFactor.com report for your location and we can work with you to evaluate that data. The flood damage models may help you determine your risk tolerance for a flood event. Floods happen and the ensuing damage is generally worse than expected. Let us help you evaluate the risk and help you build the right insurance program for this hazard. Call us at 513-977-6860 or contact us via the internet at www.driehausins.com.

Despite the widespread use of hoods over commercial cooking systems, the cleaning or lack thereof continues to be the subject of risk control recommendations to owners of this equipment. Given the inherent fire hazard of having grease laden ducts inside the building, many owners neglect this risk management process. The neglect creates a severe fire hazard and often results in catastrophic damage to the building. Who needs to do this If you have a commercial kitchen and generate “grease laden vapors”, you are required to have an NFPA 96 compliant exhaust system with grease extractors over the cooking equipment. This requirement does not vary by fuel type. Gas, L.P., electric and solid fuels cooking all must be covered by a hood and have a fire suppression system. Our article on UL 300 systems offers more detail on the suppression systems. What needs to be cleaned? All kitchen hoods that convey grease laden vapors must be professionally cleaned. This includes the entire duct system as well as the hood and grease removal devices. These systems draw in the grease laden vapors and the grease extractors separate the grease from the air stream. These hoods and the associated ductwork require professional cleaning to prevent a hazardous accumulation of grease. How often should the system be cleaned? The code specifies that when the grease accumulates to a depth of 0.078 inches, 1/32”, or 2 millimeters will trigger a cleaning. This is the thickness of a U.S. Quarter coin. The frequency of grease level measurement is based on the type of cooking operations performed. Documentation of cleaning When the cleaning is completed, the servicing company should post a certificate showing the name of the servicing company, the date of cleaning and identifying the person who performed the service. This is customarily a tag affixed to the hood. A written report is supplied to the owner that identifies any areas that were not cleaned or were inaccessible. If areas are inaccessible, the owner should make improvements to allow complete cleaning. Insurance impacts The lack of regular cleaning of a commercial hood that conveys grease laden vapors will prompt a recommendation from the insurance company. Restaurants and food service areas are high priority inspections for many insurance companies. The lack of required cleaning may trigger a rate increase for the property coverage or carriers declining to offer coverage or a renewal. Fires in dirty hoods are a known special hazard for the insurance industry and one that has driven adverse loss experience. The Driehaus Difference We know the requirements that protect your cooking operations and can help you implement proper inspections and cleaning programs. Having the right documentation is imperative to show the insurance company that proper controls are in place. We want to help you avoid getting recommendations from the insurance company. We understand the unique coverage and exposures related to restaurants and commercial cooking operations. Give us a call at 513-977-6860 or contact us using our website, www.driehausins.com. We look forward to helping you with your risk management and insurance needs.

The insurance industry is obsessed with roof evaluations and using these evaluations to control their exposure to loss. A previous post [ Click Here ] discussed the importance of roof inspections and the insurance carriers use of remote inspection tools. This trend has accelerated with increased use of artificial intelligence to review the images and render opinions. An insured may find that their renewal includes new terms regarding changing the valuation of their roof coverage to Actual Cash Value versus Replacement Cost. If you are not familiar with these terms, please review [ Click Here ] and this article will define the terms for you. The insurer is limiting their exposure to a roof they judge to be showing its age. Roof Warranties Many roof owners assume their roof is warranted by the manufacturer and installer for the “life”. As with any warranty you need to carefully read the terms and conditions to understand the coverage provided. A client recently had a roof issue and a review of their roof warranty terms and conditions was educational. Length of warranty The roof was warranted for a period of fifty years. This applied only to owned dwellings. The same shingles on a condominium or apartment building only had a warranty of forty years. The same material, the same installer but a different customer and a significant reduction in coverage term. The full warranty period is limited to ten years. After ten years a prorated warranty is provided. This level of protection is 80% reduced by 2% for every year after until year 40. After 40 years the warranty is 20% of the value. This is straight line depreciation. Wind Damage The fifty-year warranty only extends wind damage coverage to fifteen years. The warranty also excludes wind damage above the 110 MPH limit defined in the warranty. Hail Damage Hail damage is considered an “Act of God” and is not covered by the warranty. Property Insurance Property insurance provides coverage for losses that have an identifiable date of occurrence. An event must be identified that caused the damage. The peril that caused the damage must be identified and your policy must be structured to respond to this peril. Our article on different homeowners’ forms with some forms having a named peril versus an open peril coverage highlights these differences. [ Click Here ] Roof Claim Adjustment Damage claims to the roof will be adjusted based on the extent of damage. If the damage is limited to a portion of the roof, the insurance claim will address the value of that portion of the roof. The insurance policy also has an exclusion for loss related to normal wear and tear. If your roof is reaching the end of it’s life, the wear and tear exclusion becomes an important consideration. Valuation If you have replacement cost, new for old coverage, you have the best potential for recovery. If you have Actual Cash Value coverage your loss will be adjusted for the depreciated value of the roof. This is similar to the pro-rated warranty provisions noted earlier in this article. Matching Rules Some states including Ohio and Kentucky have rules regarding “Matching” materials used in repairs. These laws require the insurance carrier to replace as much of the surface as needed to match the color, size, and texture of the surface. This provision is the lever used to request an entire roof replacement for a small area of damage. Some regulations limit to scope of matching to a “line of sight” area. This can lead to disputes as to the extent of the matching area. Deductibles One way insurance companies protect their interest is in applying a specific deductible for wind and hail damage to a policy. This can be a specific dollar amount or a percentage of the building value as the deductible. If these terms are present, be sure you understand the impact of this number. It can be a significant expense at time of loss. What can I do? The most important thing an insured can do is to inspect and maintain their roof. Knowing the condition, life expectancy and materials used will help you make the best decisions on roof repairs and replacement. Your insurance policy is intended for sudden and accidental events, it is not a maintenance or warranty program. The Driehaus Difference We understand policy structure, valuation clauses and deductibles. All of these variables factor into the design of your property insurance program. Knowing your roof age and condition is a key part of getting you the best possible insurance coverage. Knowing the appetites and underwriting processes of different insurance markets can help identify the best insurer for your situation. Insurance is not an easy product to understand. Trying to condense the purchasing process into a short call or online form is not the best way to get protection. You need the experience and knowledge of the Driehaus Insurance Team. Call us at 513-977-6860 or contact us via the internet at www.driehausins.com. Register on our web site to download this article and the other articles mentioned. We want you to be an informed insurance buyer.

Most of us have a personal auto policy. We may know the premium we pay,. But do you know what coverage is provided? In the time of “only pay for what you need “ you must know about what is provided and understand what you need. Compulsory Insurance Laws In most states there is a requirement that the driver maintain liability insurance on their automobile. You are generally buying auto insurance because the law requires it be in place. Some states tie proof of insurance into the registration process for license plates. These laws have proven to be effective at reducing the number of uninsured vehicles on the road. State Minimum Liability Limits One feature of state required insurance is that the laws dictate what are the minimum acceptable liability limits. These limits are generally low and not adequate to protect you in the event of an at fault accident. Ohio, Kentucky, and Indiana require minimum liability limits of $25,000 per person, $50,000 per accident and $25,000 property damage liability. These limits would not cover the cost of someone else’s vehicle and if serious injuries are involved the liability limit would be quickly exhausted. While these limits are legal, they are not sufficient for protecting your interests. Our agency will not quote these limits for our customers. No Fault Insurance Some states, including Kentucky have adopted “no fault” laws that are intended to reduce the number of lawsuits related to auto mobile claims. Under no fault laws your insurance responds to your losses under medical payments. No fault laws allow litigation to be pursued in the damages exceed a specific limit of level in the law. In Kentucky the tort threshold is $1,000 in medical expense, a broken bone, permanent disfigurement, permanent injury or death. The low number for medical expenses makes the no fault provisions easily bypassed. Uninsured / Underinsured Motorists Despite compulsory insurance laws, there are people who do not have insurance. You can purchase uninsured motorist (UM) coverage to protect you in the event that an uninsured driver is at fault for your accident. A more common exposure is that the other driver has low limits of insurance, and the damages exceed their limits of insurance. In this case you can purchase Underinsured Insured Motorist (UIM) insurance to protect you from this event. Be sure to include property damage with the liability coverage. UM and UIM are not legally required in Ohio, Kentucky, or Indiana. You select the limit of coverage you desire to carry for these coverages. Limits and your Umbrella Most clients need an umbrella policy to extend their liability protection. The umbrella carrier will have minimum limits for their underlying auto policy. You should make sure that your umbrella extends to the UM and UIM coverages for more comprehensive coverage. Your Covered Auto The personal auto policy can be summarized by “insurance follows the vehicle”. In this case knowing what vehicles are insured is an important consideration. The typical personal auto policy provides insurance coverage for the following vehicles: Vehicles shown on the declarations page – these are the vehicles you have reported to the insurance company. Newly Acquired Autos – This coverage applies to passenger vehicles. Coverage for trucks with a gross vehicle wight of 10,000 pounds may not be automatic. These vehicles will be a covered for liability when they are acquired. The policy requires you to notify the insurer and add the vehicle to the declarations within 14 days. Collision and comprehensive coverage will apply if you have these coverages in effect on your policy. The 14-day notice period applies to adding the vehicle to your policy. If you have no collision coverage in effect at the time of vehicle acquisition, the notification period can be reduced to 4 days. Owned Trailers – are vehicles designed to be towed by a passenger vehicle, pick up or van. You must own the trailer for coverage to apply. Who is insured? The auto policy covers the named insured and any resident family members using any auto. This means the insurance company will ask for the driver data for household members who may use a vehicle. The drivers are subject to underwriting review and age, experience and driving record are part of the underwriting and pricing process. Drivers with poor records can be excluded from coverage by the insurance carrier. Failure to report drivers to avoid the underwriting process may be considered a material misrepresentation and prompt a policy cancellation. Coverage follows the car, so someone using the vehicle with your permission is covered by the policy. Coverage extends to organizations that may be held liable for auto accidents. This may apply to an employer if using your vehicle for business or an organization for who you volunteer. The Driehaus Difference Your personal auto policy requires an understanding of you family, your risk tolerance and how to structure this policy within your total insurance package. You should not compare auto insurance solely on price. Unless you know the terms, conditions, deductibles and limits for each coverage you have only one fact in hand. We work hard to create a comprehensive insurance package that has all of the parts working together to provide you comprehensive coverage. Call us at 513-977-6860 or contact us on the internet via our website www.driehausins.com.

Commercial general liability and commercial auto policies typically have an occurrence limit of $1 million. If you find that you need additional liability protection, an umbrella policy is often the most efficient tool for providing this need. When do you need an Umbrella? Contracts and Agreements Contracts and leases may have requirements to carry a higher liability limit than $1 million per occurrence . The risk transfer and insurance provisions within business agreements often trigger the need for higher liability limits. Read before you sign the agreement to be sure you have adequate coverage for the contract. Assets Exposed The growth of your personal or business assets may trigger the need for higher liability limits to protect your interests. As your business grows, it has greater assets that are exposed to a loss. You need to match your insurance protection to this exposure. Specific Exposures You may have activities, products or services that have an inherent hazard of serious loss. The potential judgment in these cases can be extremely high. You need to adequately protect yourself from a large jury verdict. Some excess liability exposures include pools, playgrounds and other recreational exposures. High severity injury from a product liability event is also a common driver for umbrella coverage. What does the Umbrella Cover? Umbrella policies are excess liability policies. The do not offer any additional property insurance protection. They are designed to offer additional liability limits and are typically over your general liability and automobile coverages. The primary qualifier for umbrella coverage is that the underlying policies have limits that are acceptable to the umbrella carrier and the underlying insurance company is acceptable to the umbrella carrier. If you have additional liability policies such as professional coverage, or specific endorsements for exposures such as sexual molestation, you need to confirm that the umbrella will cover these additional coverages. Umbrella insurance can applied to your automobile liability policy. This is subject to the underlying limits and carrier being acceptable to the umbrella company. Consider having your umbrella cover your Uninsured and Under-insured liability exposures. This can protect you from a devastating claim when the other party has liability but limited resources. Policy Structure The commercial umbrella policy will have a list of underlying policies shown on the declarations page. Carefully review this information to be sure that the expected liability policies are present. The umbrella policy can be a “follow form” product that mirrors the coverage terms and conditions of the underlying insurance policies and adds additional dollars to the coverage. If the umbrella is from the same insurance company as the underlying policies, this is the most common arrangement. If the umbrella is not from the same insurance carrier, it may have terms and conditions within the umbrella policy that are different from the underlying policies. This is common when seeking an umbrella over professional liability policies or other specific exposure related liability coverages. This is when you need an insurance professional to analyze the coverages and make sure you have what you expect. The Driehaus Difference Protecting your business is our passion. We have the experience and product knowledge to properly analyze and place your umbrella coverages. Excess liability has twists and turns that must be carefully navigated to get you to the right place. Reach out to us by phone, 513-977-6860 or on the internet at www.driehausins.com for a professional insurance consultation.

General liability insurance protects you from claims that result from property damage or bodily injury. If the cause of the claim is a slip and fall, the coverage is obvious. If the claim is related to a decision you made, a design you offered, a calculation you performed or an interpretation of information you provided, the liability is not as clear. In these cases, your professional opinion or skill is the focus of the claim. The traditional areas of professional insurance coverage cover engineers, architects, medical providers, attorneys, accountants, consultants, and similar professions. The professional exposure may extend to other areas such as building contractors who offer design services, manufacturers who design products, repair processes that require a redesign of re-engineering of a product. In these cases, you are exercising professional judgements and those judgements can be the basis for a claim. If you are required to have a specific license or carry a certification, those activities may be considered a professional exposure. General Liability policies do not automatically exclude coverage for professional services. When an insurance company wants to exclude professional services, they attach an endorsement to the policy to make this exclusion. Some companies may include this endorsement as a matter of course, others may apply it based on the exposures reported. When you review your insurance program, look at the list of forms attached to your policy. This is where you would find the exclusion form noted. If you have a professional exposure, you need to have a professional liability policy added to your insurance program. The policies for these exposures are designed to address the specific issues related to your profession. There is no one size fits all program for this exposure. Policy Terms and Conditions Claims made vs. Occurrence The first major difference for many professional liability insurance policies are they are “claims made” coverage forms. A typical GL policy is an “occurrence” form. An occurrence policy has lifetime coverage for the incidents that occur during a policy period, regardless of when the claim is reported. A claims-made policy only covers incidents that happen and are reported within the policy's time frame, unless a 'tail' is purchased. The “tail” coverage allows claims for incidents in the past. This is a critical difference and the costs to obtain tail coverage can be significant. Lack of a tail cover can result in no coverage for a loss. Covered Operations Professional liability policies declaration pages contain language that limits the policy to your professional practice. There are profession specific coverage forms; lawyers, architects, engineers, accountants, that reflect the norms of practice for that profession. Be sure to evaluate your work and the coverage limitations that may be present. Does the description of your operations on the declarations page cover what you do? Claims Settlement A typical General Liability policy allows the insurance carrier to settle a claim at their discretion. This allows the carrier control over the claim process. Since professional claims have a more personal impact on the insured, the insured has more control over the settlement of the claim. The carrier can exert control by including a “hammer clause.” This clause states that if the insured declines to agree to a settlement and the ultimate settlement is above what was rejected, the insured will pay a set percentage of that difference. This is a condition that you must identify and understand to properly assess coverage. Defense Costs All policies provide defense costs. The difference is that in some policies the defense costs are “within” the limit of insurance. This means that the dollars to pay the claim are eroded by the defense expenses. Since defense costs can be significant, you should know if your defense costs are considered to be inside the limits of your policy. Excess Liability Coverage / Primary Limits Your commercial umbrella may or may not extend over your professional insurance. You may need to buy higher primary insurance limits or a separate excess policy over your professional exposures. Do not assume that your umbrella policy will cover professional exposures. The Driehaus Difference The terms and conditions of professional liability insurance are not your primary concern or interest. You are interested in your customers and clients. We understand the insurance products that would protect you and we can craft that coverage to suit your situation. This is not a simple process and requires additional information, special applications and knowing how to fit this into your overall program. Call us at 513-977-6860 or contact us via the internet at www.driehausins.com to get started on your professional liability program.