Drones and Aerial Photographs

Drones are helping the insurance industry process claims much quicker in disaster ridden areas.

In the wake of three devastating hurricanes this fall, many insurance carriers have begun to use drones and and other aerial vehicles to aide in the claims process.  The use of drones have sped up the turn around time for claims processing dramatically.

Drones and Aerial Photographs

Unfortunately, this fall far too many small businesses are beginning to understand the need for protecting their small business with adequate insurance. These same business owners are also getting more familiar with the claims process between the business, the insurance agency and the insurance carrier.  If they did not know before, they are becoming familiar with at this time, the fact of how crucial it is for a claim to be processed quickly.  Getting victims back to everyday life can have an enormous impact on the communities impacted by natural disasters. This is what the insurance industry is striving to help the communities hurt by the hurricanes over the past few months.

Technology is helping in many ways. First, drones are helping carriers take both still photos and video to observe properties they are not physically able to visit. The carriers can use the information they get from drones, both in the form of aerial photographs and video, to create 3D images of the impacted area. Technology is now allowing them to do this at scale and determine what percentage of a property is destroyed without ever setting foot on the property. Now, this is not possible in all circumstances, but it is possible in many. Every case that is sped up, frees the adjusters to move on to other victims who desperately need help.

According to an article with the Insurance Journal, a recent KPMG (Klynveld Peat Marwick Goerdeler) Survey found, “the two biggest challenges facing insurers are the difficulties in assessing property damage and managing customer expectations”. As a result of the same survey insurance executives overwhelmingly said, ‘To improve claims efficiency and communication with customers, insurance executives cited the use of drones as one of the technologies they will utilize to help quickly settle claims’. Drones are helping with these exact problems facing the insurance industry, by allowing those within the industry to show the victims, with pictures and video, what they are doing and how they are going about doing it.

Through the use of drones many companies within the industry are able to drastically speed up the processing time for claims by allowing the insurance claims processor to get a majority of the claims process done without the ability to physically visit the property. Once they are able to get out to the property, insurance professionals can use the drone to examine several properties in a particular area in a short amount of time. This allows the claims adjuster to spend a short amount determining what properties are most devastated and will need the most of his time. It can also allow the adjuster to determine if another property does not need any further observations on his part and free up time for him to observe other areas that are severely devastated.

This is just the tip of the iceberg for how this and other technologies will help the insurance industry, better serve their clients in the future.

 

Claims Made Vs Occurrence

Have you ever wondered what the differences are between a Claims Made Vs Occurrence Based Liability Insurance Policy?  

The choice to choose a Claims Made Vs Occurrence Based Liability Policy can have an enormous impact on your business.  Making certain your business has the proper coverage can make an enormous impact to your bottom line, when a claim occurs.  Claims Made Vs Occurrence Policies are typically in relation to a general liability, professional liability, and employment practices liability insurance.  The types of businesses who are more likely to need this type of coverage include contractors, architects, engineers, attorneys and medical professionals.

Claims Made Vs Occurrence Based Insurance Policies

Claims Made

A Claims Made Insurance Policy covers claims filed during a given period of time. In most cases, a claim must be filed during the term of the claims-made policy in order for it to be covered by the insurance carrier. If the claim is filed two months after the policy has ended, the claim will not be covered.  The positive to this type of policy is price. Claims Made Policies are generally less expensive compared to Occurrence Based Policies.

Occurrence

An Occurrence Based Insurance Policy covers claims that arise from damage or injury that takes place during the policy period.  This is regardless of whether the claim was filed during the term or after.  A claim can be filed many years later and still be covered, as long as coverage was in place during the time of the occurrence.  This is important for professionals like architects who give professional advice and services to physical structures that may have a problem years down the road. If it is found the problem with the structure was the result of the engineers faulty work, the engineer can be liable for damages.  With an occurrence based policy in place this would be covered under most circumstances.

For most business owners, an occurrence policy is more appropriate and is commonly purchased.  Only using a claims based policy can be a bit of a gamble.  In most instances, the additional cost of an occurrence policy form is minimal compared to purchasing a claims made policy.

Why are both Claims Made Vs Occurrence Based Insurance Policies Offered.

Why are both Claims Made Vs Occurrence Based Insurance Policies offered?

The primary reason claims made coverage is still around is because there is a demand and because insurance companies may only be willing to write certain types of risk on a claims made basis.  This is because it is much easier for an insurance company to estimate price for insurance premium and measure their profitability with a claims made policy compared to an occurrence policy.  This is because there is a clear start and stop date to coverage. With occurrence coverage, it can take years or even decades for insurance companies to measure their profit and loss.  In the most simple terms, a business owner who purchases an occurrence policy for one year will always be insured for future claims while a claims made policy only covers the insured for that time period unless they purchase additional tail coverage.  If the business owner is willing to take the risk in exchange for a lower premium, claims made policies are still offered.

Boo – Halloween is coming!!!

What kinds of risk does the Halloween Season cause your small business to face?

My Insurance Question - Happy Halloween

For some people, Halloween Season is their favorite time of the year and their favorite holiday. For some businesses it offers an opportunity for them to get a larger than normal amount of business. With these opportunities for additional business come additional risks to your business.  Here are three tips for how to protect your business during the Halloween Season.

Halloween

Seasonal Halloween Businesses

There are many businesses that pop up for a short amount of time to help people celebrate the Halloween Season. Corn Mazes, Pumpkin Patches and Haunted Houses are all businesses that pop up, but may be a part of another business like a farm. If you decide one year to host a corn maze and you do not inform your insurance agent, you may be opening up yourself or your farm business to an enormous amount of risk. Speaking long and honestly with your insurance agent can help limit these risks.

Speak long and honestly with your Independent Insurance Agent

It is always a good idea to speak long and honestly with your insurance agent when you are purchasing commercial insurance.  If you do not take the proper time to tell them about all of the tasks your employees do and do not partake in, your agent is left to guess how risky your business is. The insurance agent is in the business of analyzing risk, so it is in their best interest to always assume more risk. This can cost you considerably in additional premium if you are not classified properly. It can also cause a claim to not be covered if you are partaking in an activity that is not covered by your general liability policy or any other policy you may or may not have.

Special Events Coverage

If your business is hosting an event related to the Halloween Season, you can buy special event insurance just for that event. This can go for any event you have with your employees. If you are having third aprties who are not employees at the event, you can be opened up to third party liability. This can be the case even if you are only going to have employees and their families attending the event. You need to protect your business from any injuries that may occur at the event. You should consider whether or not to offer alcohol based upon the risks you are comfortable with.

Happy Halloween from the friendly ghosts.

The Halloween Season can bring about additional opportunities for your business to generate revenue. Depending upon how you plan to target this market may or may not cause additional risk for your customer. In many cases it is a good idea to run the ideas by your insurance agent to make sure you are covered by your insurance policies. If you are not covered they should be able to help you determine how much risk you are comfortable taking on. These conversations should be able to help you determine what risks you face and if the additional revenue you gain is worth that risk.

Help is on the way in Florida

Not much good news has come out of the state of Florida for the past month. If there ever was a state that needed some good news it is the state of Florida. Well yesterday the business community got some much needed relief in the form of an announcement by the National Council on Compensation Insurance (NCCI). The announcement recommends the Florida Office of Insurance Regulation (FLOIR) to decrease Florida Workers Compensation Insurance Premiums by 9.6%.

Florida Workers Compensation Insurance

A 9.6 % rate decrease has been proposed by NCCI for Florida Workers Compensation Insurance Premiums.

The rate decreases on Florida Workers Compensation Insurance will not be across the board. Some industries will see larger increase than others. According to FLOIR and first reported by the Insurance Journal rate level changes by industry group are as follows:

  • Manufacturing: -10.3 percent
  • Contracting: -6.9 percent
  • Office and Clerical: -11.3 percent
  • Goods and Services:-10.4 percent
  • Miscellaneous: -8.1 percent

This is good news for business owners in Florida because, the workers compensation system in Florida has been in flux for more than a year.  About a year ago NCCI recommended a 17.1 % increase on workers comp rates last August.  The amount of increase that eventually went through was 14.5 %. This increase was in response to three main issues.  Those issues were 2 court cases and a state senate bill (Castellanos vs. Next Door Company, Westphal v. City of St. Petersburg and Senate Bill 1402).  

Castellanos vs. Next Door Company was a court case that involved Marvin Castellanos who was an injured employee who sued Next Door Company. This court decision ruled invalid a previous court ruling from 2009 which put in place a mandatory attorney fee schedule.  The overturn of this ruling meant judges no longer have to stick to the mandatory fee schedule and now can award additional compensation for attorney’s fees.   Insurance carriers anticipated this to cause them to pay out more in the future and resulted in additional premiums.

Westphal v. City of St. Petersburg was a case that found  the 104-week statutory limitation on temporary total disability benefits to be unconstitutional.  The Florida Supreme Court reinstated a 260-week limitation.  This Increased the amount of time an injured employees will get partial salary benefits by an additional 156 weeks.  This additional 156 weeks of coverage caused the OIR to approve an average increase of 2.2 percent statewide.

Senate Bill 1402 caused the additional 1.8 percent increase on premium for workers’ compensation was related to updates within the Florida Workers’ Compensation HCPR Manual. This increase was approved as part of Senate Bill 1402.

The decrease proposed this week reflects frequency and experience data that pre-dates the Castellanos and Westphal decisions. Data regarding the impact of Castellanos and Westphal will continue to mature and will more than likely be reflected in future rate filings. For now Florida will experience a much needed decrease in workers compensation insurance premium.