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Equipment breakdown is the new name for boiler and machinery insurance. Many people inside and outside of the insurance industry do not understand this insurance coverage and why not carrying it can create a significant coverage gap. Born of Exclusions that Lead to Business Income Losses Boiler and machinery insurance is necessary as standard property insurance policies have specific exclusions for losses caused by electrical arcing or electrical currents other than lightning. A failure of a circuit breaker in a panel that causes damage to the breaker and panel but does not create a fire outside that enclosure may be denied under your property policy. Since the underlying event is not covered, there is no coverage for the resulting production interruption while the electrical panel is repaired or replaced. Boiler, steam pipe, steam turbine or steam engine explosion are also excluded under most property policies. While these explosions are rare, the most significant result of a steam power related loss is business interruption. If the initial failure is not covered, no business income is available. Mechanical failure related to centrifugal force is a standard exclusion. This applies to rotating equipment and can include any motor driven process or piece of machinery. A rotating part failure on a production line that causes the line to stop but does not cause any other damage may be excluded under a standard property form. Again, the business income exposure is a magnitude more significant than the initial part failure. Born of Technology Changes Modern buildings have a significant technology backbone. Many of these systems are computer driven but are not considered as traditional business computer equipment. Building management systems that control HVAC, lighting and other comfort systems are not included on most EDP (electronic data processing) policies. Telephone systems and their associated controls and wiring are not considered by most EDP policies. The wiring network that connects your computers, printers and controls access to the internet can cause significant damage if a non-lightning electrical current is induced onto the system. The hardware may be covered but is the infrastructure that supports the system? Modern equipment breakdown policies address these exposures. Losses to the HVAC system may impact more than your comfort. In many buildings, the HVAC system is dual purpose, comfort cooling and maintaining Electronic Data Processing equipment at proper temperature. Failure of pressure vessels and rotating equipment associated with modern HVAC systems need to have the proper coverage. The equipment breakdown policy provides this. Renewable and alternative energy systems bring with them a more complex electrical system. Loss to a component of this system can trigger lost income from the systems. Production equipment complexity The exclusions in a property policy can leave a manufacturer a significant coverage gap if these events affect their production machinery. As computer-controlled equipment is the norm, the sensitivity to electrical disturbance losses increases. The concern is that traditional EDP policies are not intended for production equipment. A different type of insurance program was needed. Equipment that relies on process heating or cooling is vulnerable to loss from ancillary system failures. The modern equipment breakdown policy can include production equipment and the associated business income exposures. Jurisdictional Inspections One of the most common benefits of an equipment breakdown policy is the carrier provides the jurisdictional inspections required by your state for pressure vessels and boilers. The regulations vary by state, so this is not a simple undertaking. The equipment breakdown carrier has the staff to schedule and conduct these required inspections. Facilities that are subject to MSHA regulations may need equipment breakdown coverage to provide inspections of air compressor tanks. MSHA has requirements for these tanks to be regularly inspected. In addition to the insurance protection, the provision of the jurisdictional inspections is a benefit. The Driehaus Difference We want our customers to carry the right coverage. Therefore, we evaluate your operations, equipment and business income exposures to identify the right coverages. Equipment breakdown is part of this evaluation. We can help you place this coverage, so you have the right protection. Reach out to us on the internet at www.driehausins.com or call us at 513-977-6860

The Condo Association The condo association policy will generally cover the shell of the building including roofs, balconies, decks, and patios. The common areas are covered under the association policy. The level of interior finish covered by the association is based on the bylaws or deeds. You need to know what these terms are when you set your dwelling limit of insurance. The limit of insurance that is needed by the association can vary widely based on the coverage for interior finishes. Is this limit carried by the association adequate? Does the association policy have a coinsurance clause that could apply if they are not insured to value? The deductible carried by the association may be an assessment item back to unit owners. A large deductible on the part of the association may create a liability for unit owners. You should be aware of how the association selected their limits of insurance and how they chose the deductibles. The association insurance policy has impacts on the limits of insurance needed by the unit owner. The risk management practices of the association will ultimately impact the unit owners. This goes beyond insurance programs to facility maintenance, insurance program management, and control over operations and activities in common areas. Poor risk management techniques will cause premiums to rise, coverages to be restricted and deductible to increase. This causes increased association fees and potential higher loss assessments. Unit owners must remember that decisions at the association level have immediate implications for their insurance program. Your Neighbor The activities of your neighbor can create loss exposures in your units. Overflowing plumbing fixtures, fire exposures, improper maintenance of equipment in the other unit can cause an event that impacts your unit. The lack of maintenance on another unit owners’ part can cause a significant loss to all occupants within that building shell. Does the other party have insurance in place? Many associations bylaws and deeds require owners to carry insurance. How is this enforced and monitored? Many association bylaws have subrogation waivers to prevent owners and the association insurers from trading claims back and forth. Does this also apply to your neighbor’s policy? In a shared environment such as a condominium building the actions and inactions of your neighbor can be impactful. What you need to know... Condominium insurance is not a stand-alone environment. There are interactions between your program, the association and even your neighbors’ program. You need to be aware of not only how you manage your program but what changes in the association program and actions can have on you. We recommend that you place your personal program with the same agency as the association and if possible, with the same carrier. This means any behind the scenes claims issues are handled at the insurance company level, not with you caught in the middle. Having an agent who knows the association risk can mean you get feedback on changes and coverage needs for your policy. The Driehaus Difference A condominium owner insurance program is not a set it and forget it process. You need to understand the unique coverages, unique exposures, and the impact that different company forms will have on your program. The insurance experts at Driehaus Insurance can guide you through the process to make the best choices for the protection you need. Call us at 513-977-6860 or contact us on the internet at www.driehausins.com

A leading cause of injury and insurance claims are slips trips and falls. Almost everyone has experienced a fall and most of the time the outcome is embarrassment, not injury. However, there are the events that can cause significant injury that give rise to insurance claims for the injuries. Many slip and fall events can be covered using the Medical Payments coverage in your general liability insurance coverage. Med Pay is a coverage that allows payment to someone who has suffered an injury on your property without regard to liability. It is a “good neighbor” coverage that is intended to reduce litigation and related expenses. Your individual policy will have a specific limit of insurance for this coverage. The health insurance world often makes use of med pay when there is a slip and fall related injury claim. The health insurer will inquire if the location of the fall was not owned by the claimant and if so, who was the property owner. A subrogation claim is then presented to the property owner to recover the medical expenses. If a claim is presented that exceeds the medical payments limit, a liability claim must be pursued. This means the claimant must show that your property was somehow responsible for their slip and fall and that the conditions were negligent. Slip and fall claims can generate litigation that requires defense and investigation. Slip and Fall Exposure Management You cannot prevent every slip and fall event. You can manage the environment in which they may occur to limit your liability. This starts with understanding the basis of the exposure and what controls should be present. Changes in elevations What may seem to be a minor change in elevation along an otherwise level surface can cause a slip and fall. How significant of a change in elevation is an issue? Within the building codes, Life Safety Code, ADA accessibility standards the ½” change in elevation is determined to be the action point when the change in elevation should be addressed. Most property owners do not consider this small dimension when evaluating their walking surfaces. Changes in flooring materials can create this change if proper transitions are not used. Stairs Stairs are a common location for falls. A well-designed stair should have the following: Handrails on both sides of the steps – 30-34 inches above the stairs. The handrails begin before the first descent step and extend to the landing Handrails have an approximate round cross sections and are 1 ½” to 2” in diameter and are securely attached to the wall. Stairs treads should be 10 to 11 inches deep with a distinctive front edge Stair risers should be 7” to 7 ¼” maximum – no variation in riser height greater than 3/8th of an inch Adequate illumination – not less than 1 foot-candle – with 9 foot-candles being preferred. Sidewalks Sidewalks are generally the responsibility of the property owner to maintain. This question of requirements to shovel snow should be referred to your local attorney as each jurisdiction can have different requirements. The same rule on changes in elevation should be applied to sidewalks. Any change in elevation greater than ½” should be repaired. Parking Areas Parking areas have their own set of slip and fall hazards. Oil and other fluid spills that are in the pedestrian walkways should be cleaned. Wheel stops should be a contrasting color to make them stand out from the pavement. White is not a good color as it can be confused with lines marking spaces or lanes. Speed bumps should be a contrasting color to highlight their presence. Parking areas may have distracted pedestrians who are looking for their vehicle, the exit or watching traffic versus where they walk. Internal parking areas should have adequate illumination. Risk Control Defending a slip and fall claim means that the owner of the property should be able to demonstrate that they have routinely inspected the property for hazards, corrected any hazards identified and have done so in a timely fashion. The best defense is documented inspections and repair logs. The frequency of the inspections should in in relation to the number of users of the property. For a private business a semi-annual survey may be acceptable. For a venue with public use, the frequency should be increased. The type of surfaces, construction and materials will also influence your inspection needs. Spill Response Spill control and clean up in public spaces is another control element. For public environments, a “sweep log” is a great risk management tool. This documents how often you “sweep” the public areas for hazards. The second part of this process is having a good spill response plan. Having the clean up tools, equipment, and warning signs immediately available will allow you to manage the inevitable spill event. The Driehaus Difference We can help you develop the inspection programs and help you get started in managing this loss exposure. We can consult with you on policy terms and conditions that affect this issue. Having a properly fitted insurance program will protect your interests. Call us at 513-977-6860 or reach out to us on the internet at www.driehausins.com

Roofs do a lot for your building. Beyond keeping you dry they also are an important structural element. Damage or deterioration of the building roof can lead to significant interior damage, structural damage from rot and decay and loss of ability to carry loads such as snow or equipment. Routine roof inspections are a key element to preventing loss. You can engage a roofing contractor for this purpose, or you can do the inspection yourself and call for assistance if issues are identified. Shingle Roof Inspection Blistered, curled, or split shingles Loose or missing shingles Loose or exposed nails, improperly seated nails that “popped” Broken or loose shingles at the ridge and hip lines Signs of missing caulk to seal flashing Rusty or corroded metal flashing, damaged or missing flashing Sagging on the ridges or between trusses Broken seals on shingles Excessive granule loss on shingles Examine chimney for cracks Rubber boots at top of pipes for dry rot – these have an expected life that is shorter than the roof itself Review gutters and downspouts – are they properly attached, sloped and clear Examine fascia board for any damage or rot Survey the condition of siding above the roof – also check flashing at this joint Gutters and eaves for proper shingle overhangs to direct water to the gutter Commercial Roof Inspections A commercial roof has different inspection and evaluation points to consider. A good roof inspection will inspect the following: Evaluate decking for rot or surface staining Check roof vents for proper flashing and seals Inspect flashing at any intersection with another surface Look for tears or damage to the roofing field Check equipment curbs and any utility penetrations for leaks Inspect for ponding Water – this may indicate drainage or roof slope issues Look at the Flashing – cracks and crevices that may be open to water infiltration. Look for debris that could damage the roof including accumulated material in corners Inspect terminations in parapet walls and roof edges – check the bottom of the wall for any cracks or opening and the top of the wall that the roofing is securely attached Check the drains, gutters and downspouts to see that they are clean, open, and properly attached Interior Roof Inspection It does not require equipment more complicated than a flashlight to inspect the roof from inside your building. Obvious signs such as stained ceilings and stained walls indicate a leaking roof. Discoloration on the underside of the roof deck can be observed from inside the building. Wet insulation in the attic is also a clear sign of a roof leak. If you can see the interior signs of a roof problem, so it is obvious to anyone who is inspecting your property Remote Roof Inspection Roof losses are a driver for property insurers loss reports. Many insurance companies are now using overhead imagery to inspect roof and determine your insurability. You should look at Google Earth images and other internet sites that have an overhead image of your property. If you can see discoloration, overhanging trees, and evidence of ponding from these images, it is possible that your insurer is seeing the same pictures. New software applies an evaluation algorithm to “score” roof conditions. This can impact rates and renewal terms. The Driehaus Difference We understand the tools used by insurers to remotely evaluate roof conditions. This allows us to help our clients use these reports to improve their property insurance program. Helping our clients understand the importance of roof inspection and maintenance positions our clients for success in the property insurance marketplace. Call us at 513-977-6860 or contact us on the internet at www.driehausins.com

Condominiums are a unique environment for insurance purposes. While you may own your unit and have your own insurance policy, you are going to interact with the insurance program carried by the association, and you may interact with your neighbor’s insurance program. This means that keeping the gears meshed together is important to all parties. Condo Owner As the owner of a condominium unit, you should carry your own insurance program for property and liability insurance. There is a specific insurance product for this need, The HO-6 Unit Owners Form. This is an industry standard product, but each insurance carrier will make their own edits to the form. The insurance carriers will often offer a broadening endorsement to add coverages or remove exclusions. These changes are critical to your getting the coverage you need. This article will focus on the base form and its provisions. Where does coverage apply? – The policy provides coverage at the “residence premises”. This is the unit you reside in an that is shown on the policy declarations page. Make sure the description, address, unit number and details are correct. Property Coverages Dwelling Coverage is the alteration, appliances, fixtures, and improvements that are part of the building within your unit. It can also be called Unit Owners coverage. The first intersection with another party is the coverage provided by the condo association. The bylaws or deed for your unit will define the level of property insurance carried by the association. “Studs out” coverage that requires the unit owner to insure all of the finishes and appliances. “All in” coverage means the association covers the finishes and appliances that are “association standard” grade and quality. This is when your knowledge of upgrades and values related are important. If you have made upgrades to standard finishes such as upgraded cabinets, countertops, floor coverings or window treatments, you need to capture these values as part of the dwelling coverage or unit owners coverage for your unit. Personal Property – This coverage is for the contents of your unit, furniture, decorations, entertainment systems, clothing and all things in cabinets, drawers, and closets that are not permanently attached to the unit. The value here is extremely variable and should be based on a home inventory for most accurate results. Coverage can be extended to guests and residence employees. Personal property coverage is an area where sub limits are common. The insurance form may have lowered limits from $200 to $10,000 for a number of items such as jewelry, firearms, and collectibles. A careful review of the items that are subject to lower limits is a worthwhile undertaking. A significant coverage gap can be present if this is not considered. Loss of use – Coverage is provided for temporary living expenses and any loss of rental income for the duration of repair or replacement of the premises. If civil authorities require you to vacate the premises due to a covered loss, you can have additional living expenses and fair rental value coverage for two weeks. Additional coverages may be included in a broadening endorsement. Additional Coverages – The HO-6 form offers a number of additional coverages. Some are included in the limit of insurance and others are additional coverage. These coverages are often the subject of the broadening endorsements offered by the carriers. Within this long list of additional coverages there are two that should be carefully reviewed. The loss assessment value should be compared to the deductible on the condo association policy to assess your potential liability. The ordinance and law exposure for older buildings is also a potential coverage gap. Exclusions that Limit Coverage Ordinance or law beyond the sublimit already reviewed Earth movement or earthquake Flood, back up of sewers and drains, Water infiltration through the building floors, foundations, or walls Power failure Neglect War Nuclear hazard Intentional loss Governmental action The water damage exclusions can be problematic for many unit owners with lower-level exposures. Flood and quake are location specific hazards that need to be addressed. Ordinance and law can be a concern if you are in an older building. New code upgrades to access, egress and structural issues could be significant. Different companies have broadening endorsements that change their list of exclusions. The Driehaus Difference A condominium owner insurance program is not a set it and forget it process. You need to understand the unique coverages, unique exposures, and the impact that different company forms will have on your program. One of the most important factors in determining the level of coverage required, is to provide a copy of the bylaws to your agent. The insurance experts at Driehaus Insurance can guide you through the process to make the best choices for the protection you need. Call us at 513-977-6860 or contact us on the internet at www.driehausins.com

Jewelry is more than a value on an insurance policy. Jewelry commemorates significant life events and are an enduring reminder of those events. It most likely has a higher sentimental value than an economic value. Jewelry is both a high value item that drives claim severity, but its presence in and out of the home makes it a high frequency claim item. Jewelry is small in size and high in value. It can be easily converted to cash. Theft and loss are the most frequent claims seen with jewelry. What is Covered? Insurance is not a commodity product, a survey of homeowners and condominium unit owners’ forms from a single carrier had the following coverages and limits built into the base coverage forms. If you are not aware of the specific policy form in force, you can have insurance from a major company but different levels of coverage. Pair and Set Coverage Jewelry is often sold in sets and pairs. The value of the pair or set is based on all pieces being present. The loss of one part can diminish the values significantly. A review of the same insurance forms have different coverage for pairs and sets. Only one form offers a replacement cost option for loss to a portion of a pair or set. Personal Articles Endorsement If you have values greater than the limits within the standard policy form, you can add a personal articles endorsement to your policy. The personal articles endorsement covers the property against “physical loss” This means accidental physical loss or accidental physical damage. With this form in place, you have coverage for theft and misplacing or losing the jewelry. The Personal Articles endorsement requires that you specifically list and identify the items to be insured. The schedule of values must be complete, and coverage is not provided for items not listed. Newly acquired items must be reported within 90 days of acquisition. Within this 90-day period the maximum coverage is 25% of the limit for that type of item, not to exceed $50,000. Settlement terms are actual cash value only. The endorsement may have an inflation guard provision to add to the values annually based on an inflation factor. The personal articles endorsement provides the broad pairs and sets language that offers a replacement cost option. Appraisals Many insureds ask if they need to have their jewelry appraised to have coverage. The more important question is how did you arrive at the values you assigned to the items on your schedule? The policy does not specifically require that appraisals be provided, but the loss adjustment terms indicate that the values are the market value at time of loss. Since jewelry can be passed from generation to generation, the purchase price may not be the best valuation for your property. Styles change and market value can change with these trends. Most jewelers will offer a written appraisal on items they sell you for no fee. Many jewelers offer appraisal services for other pieces at a fee. Having these documents will assist you in setting accurate values and also providing a clear identification description for the piece. If you have appraisals, please provide these with your list of items for the schedule. Maintain a copy of these documents in a safe place, separate from the jewelry, so they are available if needed at time of loss. Scanning the documents and storing them in the cloud is an excellent way to safeguard them and make them immediately available if needed. The Driehaus Difference We know that terms and conditions vary within every company’s coverage forms. We discuss your needs and can identify the coverage that fits you. We can help you with assembling the descriptions and information needed for a personal articles endorsement and collect the supporting information and make sure the insurer has the documentation they need. Fitting coverage to you is what we do best. Reach out to us at 513-977-6860 or on the internet at www.driehausins.com.

Valuation is obviously a key part to property insurance. The insurance company will routinely do an “Insurance to Value” calculation and see if your building limit is sufficient. The calculation is often done when you file a claim to confirm that any coinsurance requirements are satisfied. You may be requested to raise or lower your building limit to satisfy this insurance company requirement. The insurance industry uses online valuation tools that use a variety of data sources to estimate values. While the data used by each provider may be different, the underlying variables that are used are consistent across the platforms. You should always ask to see the report that is being used to establish the value in question. Big Data – Many insurers use third party data providers to provide the building data for this process. This data can be from prior insurance inspections and tax assessor data. There is no consistent quality control on this data, so ask where the insurance company got the data they are using. It could be outdated or simply wrong. Address – This data places your building is a specific climate zone and also identifies local cost factors that are applied to the base estimate. Verify that the address on the report is accurate, including zip code. Occupancy – Each valuation tool has its own selection of occupancy types and associated definitions. Check the occupancy type and ask to see the definition to confirm that is reflects your building. Construction types – Most ITV tools use the ISO construction types – if you have mixed construction types in your building the most accurate valuation will use the percentage mix of construction types. The insurance rating process distills mixed construction to a single class for rating purposes. This distilled construction type may not accurately reflect your building. Area of the building – This factor is the most critical of all. The estimation software generally work on a value per square foot basis, so area differences are critical. Review the report and confirm that the area used is accurate. Number of stories – This and area determine the estimated outline of the building. This affects the costs for many elements. Building age – This is used if the insurer is calculating a depreciated value. It can be used in replacement costs to estimate what systems or elements may need to be replaced due to code updates. Construction Quality – Every system has levels of construction quality and associated definitions. This single variable can affect the values by over 50%. What level of quality was used and how is it defined? Replacement versus Reconstruction Costs – The insurance industry generally uses reconstruction costs to estimate value. Most property losses are not total losses, so the cost to match new to old is used to estimate costs. As anyone who has done remodeling knows, there is a higher cost to match existing finishes. Ask what value the insurer is using in their estimate. What is the valuation required by the policy language? The Driehaus Difference - Having adequate values is important to protect your interests. If the insurer asks for values to change, be sure you understand how they derived their numbers. We routinely use these valuation tools and can help you interpret the data. We understand the process and can help you navigate the choices to be sure your insurance program protects what is important to you. The descriptions of insurance coverage are general in nature and are not a replacement for actual policy language. Call us at 513-977-6860 or visit our website at www.driehausins.com to learn more about us and to get in touch with us.

Our previous posts, What is my Property Worth and How Much Will They Pay?, brought focus to the values and valuation terms on your insurance program. The insurer has a vested interest that the property limit used, reflects the correct reconstruction valuation. The limit is what your premium is based on and is the maximum amount the insurer is obligated to pay in the event of a claim. Underinsured property leaves premium dollars on the table and exposes the insurer to a higher than anticipated loss at time of loss adjustment. Insurers often use coinsurance clauses to reinforce the need for proper limits of insurance. A coinsurance clause requires that you carry a limit of insurance that equals or exceeds the co-insurance percentage, typically 100%, 90% or 80%. You should set your values using the following formula if a coinsurance clause is present. The values used should be consistent with the valuation clauses in the policy. An insurance policy is concerned with reconstruction valuation (the cost to rebuild or repair with new material). The market value or the purchase price of a building is not typically relevant when determining a reconstruction value. Often the market and reconstruction value are close, but the location of a building can drastically affect the market value and not influence the cost of rebuilding. Reconstruction Value of Property x Coinsurance Percentage= Limits of Insurance Required At the time of loss, the insurer calculates the value of your property and calculates a ratio by dividing your limit by the value you should have carried. This ratio is then applied to the loss dollars to be paid. Here are two examples to show how this process works. The solution for co-insurance is proper valuation of your property. Insurance carriers use a number of tools to evaluate property values. You should be confident that the values you use as limits of insurance are adequate and meet the coinsurance provisions of your policy. The next installment of this series will discuss the ITV (Insure to Value) process. Agreed Amount — This is a valuation that waives coinsurance, and the insurer agrees in advance that your values are acceptable. This is a desirable provision in your insurance policy and one that must be requested and justified before the underwriter will enter into this agreement. The team at Driehaus Insurance regularly assist our insureds in demonstrating that the values on your policy are adequate making the policy eligible for this important endorsement. Agreed Amount / Blanket Coverage — Some insurers will offer both agreed amount and blanket coverage if they can justify the extension of these terms. This is the best insurance solution for you as you waive coinsurance and have the total blanket limit available at the time of loss. The Driehaus Difference Getting your values right, securing the best terms and conditions for your insurance program are what we do for our clients. We understand the process and can help you navigate the choices to be sure your insurance program protects what is important to you. The descriptions of insurance coverage are general in nature and are not a replacement for actual policy language. We understand the process and can help you navigate the choices to be sure your insurance program protects what is important to you. Call us at 513-977-6860 or visit our website at www.driehausins.com to learn more about us and to get in touch with us.

Our prior review of the Life Safety Code and Emergency Lighting highlighted the structure of the code and the provisions in place to assure that you have adequate lighting to exit the building. Effective evacuation depends on the means of egress being professionally designed and maintained. Some of the basic principles are: Two separate ways out – This is a basic principle for the Life Safety Code. Having two ways to exit the space and those exits must be remote from each other to prevent a single event from compromising both exits. Exits in commercial spaces are designed for the purpose and are suitable width, equipped with handrails and doors that swing in the direction of egress. Enough ways out – As the number of people in the space increases, the number of exits also increases. This is intended to reduce the possibility of a bottleneck at any given exit and delaying the movement of the crowd. The right number of exits properly distributed is a key consideration for life safety design. Exits are close – Travel distance to an exit is a consideration in locating exits and can mean additional exits to allow immediate access. Travel distances vary with the occupancy and can be increased for buildings with sprinkler systems. Getting the people into a protected environment such as a protected stairwell keeps the occupants safe. Travel distance is important to control to make sure the protection is readily accessible and evacuation times are short. Doors swing in the direction of egress – This is a fundamental way to keep the flow moving. Doors that swing against the egress flow tend to create delays . The best practice is having doors in the path of the designated exit paths swing in the direction of egress. There are provisions to allow small areas or areas with limited occupancy to have in-swinging doors. These limits are set to address the inherent impediment and delay potential for an in-swinging door. Exit availability is more important than security – There is a balance between physical security and egress availability. The scales are weighted that egress availability is the higher consideration. There are code provisions for automatically unlocking doors. There can be a slight delay in releasing doors from secured areas and having an audible alarm sound to alter staff of egress attempts. These provisions must be carefully designed, installed, and maintained. Exits must be obvious – The use of lighted exit signs and directional exit signs to move you towards the exit are a primary tool for your safety. Exist signs must be placed properly and be easily seen with contrasting colors to stand out. Exit signs must be maintained and should not be covered or obscured. Exits must be available – Exit paths are not “free” space that can be used for storage of other purposes. Using stairwells for storage or using the exit path as additional space for workstations or equipment defeats the purpose of having a designed means of egress. Adding security dividers within a space may require additional exit points if the egress path is interrupted. Egress assistance in assembly venues is required – In assembly occupancies the code requires that you have crowd managers to assist in egress. If the occupancy load is greater than 250, there must be at least 1 crowd manager for every 250 occupants. Research and experience have shown that audiences and attendees may not respond to the evacuation cues and may not be familiar with the closest means of egress. Trained crowd managers are needed to direct the egress smoothly and efficiently. Existing venue staff can be trained for this purpose. Getting out of a building quickly and safely is not a random event. It occurs when the building has been designed, maintained and proper training and supervision is present to keep the systems in balance. Many egress issues become evident when an event identifies the failure. This can create a liability exposure for the owner and operators of the space. Driehaus Insurance Group has the necessary technical expertise to assist our clients in understanding these requirements and recognizing when improvements may be needed. Reach out to contact us at 513-977-6860 or on the web at www.driehausins.com

Certificates of Insurance – a Quick Review The most common request we get for policyholder service is providing a certificate of insurance for a client. As either the certificate issuer or holder, here a few things to know about this important document. A certificate is a point in time document. The insurance shown on the certificate is in force as of the date of the certificate. While it shows an expiration date for the policies, there is no guarantee that the coverage is in place after the date of the certificate. If you are asking for a certificate, check the date on the document. If it is not a current date, ask for a new certificate to be sure coverage has not lapsed or changed. Check the limits of insurance shown on the certificate. The limits carried by the other party in a transaction should meet the requirements in the written agreement. Do not assume they will match. If you do not have a written agreement, you may not be able to transfer risk to the insurer. If you are providing the certificate, make sure your limits meet the requirements. Do not assume that your insurance policy will respond to the liabilities you are being asked to assume. Insurance policies may have exclusions or limitations that impact a given exposure. You should understand your coverage and the risk you are being asked to assume. Read before you sign! The certificate will identify the insurance carriers that are providing coverage. Some contracts will specify that the insurer must have a specific AM Best rating. There are two ratings typically specified, a Financial Strength Rating and a Financial Size Category Rating. The two links will take you to the AM Best site for details on these ratings. Do the carriers on the certificate meet these requirements? The risk transfer agreement may have additional insurance requirements beyond a certificate and additional insured status. If there are other provisions such as waiver of subrogation, primary and non-contributory, or specific policy forms and dates, be sure the certificate reflects those as well. Send us the contract language so we can be sure your policy responds. Certificates are issued to specific holders. If you are presented with a “sample” or “generic” certificate be sure to request one where you are the certificate holder. You may ask for notification from the other party’s insurer if the coverage lapses. In most cases the insurer will “endeavor” to provide that notice. If you have concerns that the other party may have an insurance lapse, you should plan on following up with the certificate issuer to get confirmation of coverage. In order for an insurer to provide notification, you must not only be a certificate holder but also be specifically added to the policy by endorsement granting additional insured status. We issue certificates every day and understand what is needed and how to structure your coverage to address these requirements. We can also help you interpret certificates you receive so you are confident of the coverage being described. Certificates of insurance play a key role in commerce and contractual risk transfer. We understand the process and can help you navigate the choices to be sure your insurance program protects what is important to you. The descriptions of insurance coverage are general in nature and are not a replacement for actual policy language. Call us at 513-977-6860 or visit our website at www.driehausins.com to learn more about us and to get in touch with us.

A prior posting, What is my Property Worth? focused on the different values that can be established for a piece of property. This was the starting point for your insurance decision making. The values you place on the policy are generally the limits of insurance for that location. Property, real and personal as well as business income have limits of insurance, the maximum the carrier will pay and valuation terms, how the loss will be adjusted. Let us examine the valuation terms that are typically on a commercial insurance policy. Replacement Cost – This is new for old coverage. The insurer will replace your property with goods or materials that are similar in kind and quality. The limit of insurance on your policy should reflect the replacement cost of the property you are insuring. For buildings with historic and unique architectural features, you need to consider these in setting the values. Actual Cash Value (ACV) – The insurer will replace the goods or provide funds that reflect the age and depreciation of the damaged goods or property. You will not get sufficient funds to replace the property but will get the depreciated value. The limit of insurance should reflect the depreciated values of your property. ACV can be a significant concern for partial losses, such as roof damage. With the ACV valuation, the payout is reduced to the depreciated value of the roof. The difference between the replacement cost & depreciated cost may leave you with a significant financial gap, placing stress on your budget to fully complete the work. Functional Replacement Cost – If you do not plan to replace the existing property with like kind and quality, you may need a different valuation. If the new building would be more expensive to build than your current building, functional replacement cost allows you to replace the damaged property with another product that has similar function but a different cost. This is often used when the original property is obsolete and would not be an efficient replacement. This gives you an option to insure for a higher value. The limit of insurance should reflect the cost of the desired functional replacement item. Given the inherent complexity of this valuation, some insurers are reluctant to extend these terms. Business income has two valuation terms – a specific limit or actual loss sustained. The limit that is chosen is a function of completing a business income worksheet to determine the allowable expenses and the period of restoration required to resume operations. This is worthy of its own discussion. The actual loss sustained language avoids the completion of the worksheet and allows recovery of losses for a policy defined period of restoration. Blanket or Location Specific? – If you have multiple locations on your insurance policy, the insurer can choose to have the values at each location stand alone or they can blanket the values and have the total limit for all locations under the blanket available for any loss. Blanket coverage will offset any valuation deficiencies that may occur and is a desired valuation term. It may come at additional cost as the insurer wants to protect their interests. The insurer needs to have confidence in the accuracy of the values you have provided. The Driehaus Difference There is a lot of thought and planning needed to select the right valuation terms and to determine if location specific valuation or blanket is needed for your program. There are different levels of data required for the various valuations and to have an insurer agree to offer blanket coverage. The descriptions of insurance coverage are general in nature and are not a replacement for actual policy language. We understand the process and can help you navigate the choices to be sure your insurance program protects what is important to you. Call us at 513-977-6860 or visit our website at www.driehausins.com to learn more about us and to get in touch with us.

We previously reviewed an overview of the Life Safety Code. This continues that discussion to focus on emergency lighting. Emergency lighting provides a minimum level of illumination for occupants of the building to find their way to the exit and to get out of the building. The performance and testing requirements are found in Chapter 7, Means of Egress, of NFPA 101. The triggers for installing emergency lighting are found on the occupancy chapters, 11 through 43. Emergency Lighting Performance The Life Safety Code has specific requirements for the performance of emergency lighting systems. The first requirement is that if the system depends on switching power sources, the maximum delay is 10 seconds. Battery operated units do not have this delay, it applies to emergency power supplies. The emergency lighting must be provided for 1 ½ hours duration. The duration is to allow an orderly evacuation or relocation of building occupants. Lighting levels are measured in foot- candles, a measure of lighting intensity or brightness. Lighting levels are specified as an average of 1 ft-candle and at any point the light level cannot be less than 0.1 ft-candle. – Compare this to the building code required average of 10 ft-candles for normal conditions. At the end of 1 ½ hours the average lighting level must be at least 0.6 ft-candles and not less than 0.06 ft-candles at any point. This accounts for battery drain. The maximum to minimum illumination ratio cannot exceed 40 to 1. This eliminates blinding effects of high intensity lighting sources. Emergency Lighting Testing Emergency lighting systems must be tested to prove they are reliable and will have adequate duration. The light levels were established at time of installation. If there have been changes to the egress paths or building layout, the testing should verify that design criteria are still met. The Life Safety Code allows three different test processes to be used. A functional hands-on test of the devices – monthly – The period between testing should be a minimum of 3 weeks and a maximum of 5 weeks. Monthly testing should be 30 seconds in duration. A functional test of 1 ½ hours should be done annually Self-testing and self-diagnostic equipment can be tested using the system every 30 days for a minimum of 30 seconds. An annual duration test of 1 ½ hours is required. The self-testing and diagnostic function must remain in service for the 1 ½ hour test. Computer based testing can be done every 30 days for a minimum of 30 seconds. An annual 1 ½ hour duration test is required, and the computer monitoring must remain operational for this 1 ½ hour period. Regardless of method, documentation of the testing is required. The Driehaus Difference Our experience is that emergency lighting is often not correctly installed, tested, or maintained. This can create a liability issue for the business owner. Driehaus Insurance Group has the risk management resources available to help you understand these questions. Call us at 513-977-6860 or contact us via our website www.driehausins.com