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The recent high profile ransomware attacks have brought this issue to the front page. Cyber security breaches are growing at an alarming pace and the damages done can be substantial. The exposure is real for anyone with an internet connection. If you have business or personal data on machines that are internet connected, you are at risk. The risks go beyond a systems outage. You can have loss of market, reputation damage, and lost income from the period of impairment. If your systems adversely affect others, you may have a liability exposure. Cyber exposures are getting more significant every day. Cyber Security Basics Most cyber attacks are not highly sophisticated endeavors. They are successful because many systems are simply easy to compromise. Systems that lack effective security software for antivirus and malware detection are easy targets. The lowest level of security is a password an many users use predictable passwords and never change them. This creates an easily compromised system. Rank your System Security Effort on this Scale: No controls that I know Minimal level of control – whatever was provided with the computer- no password standards Purchased security suite with automatic updates – no password management Security suite and regular password changes with strong password standards Multi factor authentication required for access A rating less than 4 makes you an attractive target. 4 is the absolute minimum you should provide, and this is a level that leaves you vulnerable to a focused attack. If your response is that IT handles this, you are vulnerable. Cyber security involves every user and is an enterprise-wide undertaking. If you do not have effective security controls, you could have a liability exposure as well as potential system breach potential. Phishing Many compromises are the result of “phishing” attempts. Phishing is when an attacker gains access to your systems via a message. That can be an email, a text message, or a web site that you are asked to visit. The pretext is created to ask for personal or business information; ask you to click on an attachment or getting you to connect to a website that installs malware to infect your system. Once you grant the information or click on the attachment you have opened the door. In some cases when you fall victim to phishing, you may lose insurance coverage. Since you provided the access or gave the information away, you authorized the transaction. Rate your Resistance to Phishing You spelled fishing incorrectly Have heard about it Have attended some training, read something Have done training and hands on exercises Have ongoing audits with simulated attacks and training If you score less than 4 you have a significant exposure. You need to know how to check out links and email addresses. This means hands on experience. Phishing is highly effective at compromising your systems. You invite or allow the intrusion add once inside your system the hackers can take control, steal information or shut down your network. Software Updates Many of the attacks are based on vulnerabilities in operating systems and common applications. Most of these providers have regular updates to their products to address security and normal bug fixes. If you fail to routinely apply software updates you leave the door open to attack. Rate your use of Update Services No automatic updates enabled Windows updates are enabled Service to scan applications and detect and alert you to updates, but not scheduled to run periodically Software to detect and install updates – alerts you to updates that require your intervention. Scans are scheduled routinely. A score of less than 4 on this leaves the door open to system compromise. Software must be regularly updated to be effective at resisting the attack. You should also consider applications that do not have an update service. If these products are connecting to the internet or you network, old or outdated security protocols are a hazard. Security and system updates take time and resources to properly administer. Password management requires ongoing effort. Software updates require installation time and often restarting your system to fully install. A best practice is to test updates on a dedicated system to make sure there are no adverse results from an update. The discipline around these issues will pay dividends in system protection. Know Your Exposure The quantity and type of data on your system can help you understand your exposure to loss. If you store Personal Identifiable Information (PII) about your employees, customers, prospects, or others you have data that is attractive to bad actors. This data is the first step to identity theft and your management of the data places a liability on you to secure it properly. Collection and storage of payment information is another consideration. Having bank account data, credit card data or other payment related information on your system makes your data a high-profile target. Using a third party for this lowers your exposure as long as the third party provides proper data protection. Transferring risk to a poorly managed provider does not serve your interests. The intellectual property unique to your business can also be a target for cybercrime. From customer data to proprietary designs and products, a breach of your intellectual property can have devastating implications. Reputational damage from a data breach can be a costly outcome from a security lapse. Data related to process control may lead to business interruption and damage to process equipment. Data and code that is unique to you does not make it off limits to a bad actor. These systems can be ransomware targets. Resources The National Institute of Standards and Technology (NIST) has developed a cyber security framework as a guide for national assessment and implementation of cyber security. For small and medium businesses there are specific NIST tools and resources to help you assess and implement your cyber security controls. Visit NIST Small and Medium Business Resources to see what the security framework entails and to get practical assistance in implementing this process. See a short video to get an introduction to this framework https://youtu.be/J9ToNuwmyF0 The Driehaus Difference We recognize this is an extraordinarily complex issue and one that requires expertise to implement controls. We have access to carriers with cyber expertise and we can refer clients with cyber security concerns to an expert. Call us 513-977-6860 or reach out to us via our web site www.driehausins.com. Watch for our next installment on the insurance coverages that are available for cyber exposures.

Emergency action plans are required in OSHA regulations. The OSHA regulations show their age by focusing on traditional fire drills and evacuation drills. This does not mean that you are not required to address other hazards. The OSHA General Duty Clause captures your responsibilities as an employer. Each Employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious harm to his employees. To see a comprehensive list of potential hazards that may require your attention visit FEMA’s emergency planning resource at https://www.ready.gov/ Since OSHA is a commonly referenced workplace safety resource, let us take a look at OSHA. The General Industry standards call for this specifically in section 1910.38. This section also references that compliance with the Life Safety Code is considered as complying with this OSHA subpart 1910.35 OSHA has resources to assist employers with meeting these standards. The first is an OSHA Expert system to determine if you need an EAP. This questionnaire can be accessed at https://www.osha.gov/etools/evacuation-plans-procedures/expert-systems/osha-requirements If the tool indicates you need a plan, you can link to the follow-on Expert System for creating your EAP. This tool can be accessed at https://www.osha.gov/etools/evacuation-plans-procedures/expert-systems/create-eap These tools are good for small business and locations that do not have significant fire hazards or special chemical hazards. A review of the Life Safety Code indicates that Emergency Action Plans are required in Section 101-4.8. The code gets more granular in training and drill requirements in the occupancy-based chapters. The following occupancies have specific training and drill requirements in the Life Safety Code Assembly occupancies – employee drills and crowd managers Education occupancies - Fire drills required Day Care – Evacuation drills required Health Care – Evacuation and fire drills Ambulatory Health Care – staff training and drills required Detention and Correctional – Staff training including fire extinguisher use Hotels and Dormitories – Hotel emergency team and drills in dorms Apartments – occupant instructions required Residential Board and Care – staff training and drills required Mercantile – staff training and drills Business Occupancies – staff training and drills A good resource for assistance in developing these plans is the National Fire Protection Association (NFPA). The NFPA web site, www.nfpa.org , had a variety of training materials and resources to assist you. The OSHA Construction standards reference an emergency action plan at 1926.35. A fire safety plan is called out in 1926.150. Construction sites need to carefully evaluate the methods used to alert employees of an emergency and have a response plan in place. The Ready.Gov Hazard List Focusing exclusively on what is required in OSHA standards and the Life Safety Code may leave you exposed to claims of failure to plan. The hazard list here is either comprehensive or frightening depending on your outlook on life. FEMA provides a collection of Hazard Information Sheets to address many of the hazards noted. As the list of potential emergency events expands, you may need to expand your planning consultations. Having a response plan that is coordinated with the first responders will allow you and the responders to coordinate your actions. This can be as simple as what entry points should be used to detailed pre-planning on process hazards, special hazard protection systems and security issues that affect your facility. The local responders may also be able to assist with training resources that are consistent with their operational guidelines. The Driehaus Difference Your risk management program should include response plans and a review of insurance coverage to be sure you have the financial protection for an event. Some insurance programs can include assistance with incident response, post incident recovery and managing the public relations aspects of a critical event. Talk to us about your options for insurance and any assistance we may have for you. You can contact us on our web site www.driehausins.com or call us 513-977-6860

What coverage is needed? When a building suffers a significant property loss, there is the potential that the code officials will require that the building be brought up to current code standards. The exact decision-making process varies by jurisdiction, but it can hinge on what percentage of the building is affected or if the building has suffered structural damage. A detailed evaluation can trigger a score that requires a code upgrade. If the extent of the upgrade is structural in nature, it may be necessary to demolish the undamaged portion of the building to retrofit foundations and footings to meet new standards. While this is the most extreme case, building owners are routinely faced with the need to improve the means of egress, add sprinkler systems, upgrade accessibility features and a host of other code requirements. The property insurance policy has standard exclusions that will not pay for any expenses related to Ordinance and Law related costs. This leaves building owners with a significant coverage gap. Many policies will offer some supplemental coverage, but the limits are generally low and would not cover the full cost. Assessing the exposure Most property owners are content to know that their building is “grandfathered” in terms of code compliance. Changes to the building code, Life Safety Code, sprinkler standards and special hazard protection standards are generally not retroactive. What was approved at time of construction is permitted to remain. As long as the scope of any damage fits into the building official’s definition of “repair”, you are probably safe. If the scope of work exceeds repair, you may be facing a code required upgrade. What should you evaluate as a starting point? Would your occupancy/business activities be permitted a building of this size and height in the same construction class? Can the existing structure handle the structural design loads per the new code? These loads are updated periodically as the code evolves. Are fire rated separation walls required in new construction? Are there requirements in the new code for tenant or dwelling unit fire rated separation? Are there fire separation code requirements for corridors that would need to be met? Are vertical opening improvements needed for new code compliance? Does the HVAC system have proper smoke and fire dampers as needed? Does the occupancy require fire detection? Does the building have sufficient means of egress per the current code? Is elevator system control provided? Are emergency lighting systems and exit lights provided as required by current codes? Are automatic sprinklers required by the current code? Is a standpipe system required by the current code? The above list deals with some of the building code questions. A second area of concern for many building owners is meeting the requirements for American with Disabilities Act (ADA) requirements. These can include accessible entrance, accessible restrooms, elevators, ramps, and changes to elevator controls and building signage. If you feel you would need funds to address these issues in the event of a large loss at your facility, then you need ordinance and law coverage. What Values are Needed? Ordinance and law coverage generally has three distinct limits. The limit for covering the undamaged part of the building that must be removed to meet code requirements The increased costs to repair or replace parts of the building that are required to be upgraded to meet the current codes. The cost to demolish and clear the site if required by code. The limit for the first coverage is normally included in the overall building Replacement Cost (RC). It is important to use replacement costs in this instance. If you are insuring to Actual Cash Value (ACV), the values will not be adequate to include the code upgrades. If you need help with these valuation terms, see our post Valuation Clauses- What will it pay? The coverage amounts for increased cost of construction and the demolition are generally set numbers and may be built into the policy via supplement coverage or a broadening endorsement. Evaluate these limits and if you have significant exposure to upgrades, assess the value of the needed upgrades. The Driehaus Difference Our area has a rich supply of older and historic buildings. These buildings offer an architectural diversity that makes our neighborhoods special. With these buildings there is an inherent exposure to loss and the potential need to upgrade to meet current codes. The insurance professionals at Driehaus Insurance Group recognize this exposure and can help you understand the need for coverage and what limits to carry. Reach out to us on the internet at www.dreihausins.com or call us at 513-977-6860

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