Hello! We hope that you will find this blog helpful when navigating the complicated world of insurance. Even though we work in the industry, we understand how overwhelming the never-ending coverage options can be. This blog is our opportunity to connect with you, our customer and become the place where you can get all your insurance questions answered.

Insurance is not a one-size-fits-all
type of product…

Because insurance is not a one-size-fits-all type of product, getting the right coverage for your specific needs, whether as an individual or a family, is our top priority. We believe this value system, along with our ability to shop for the most valuable coverage option, is what sets us apart from your typical insurance company.

Now that the formalities are out of the way, we welcome you to read on and become better equipped to tackle the insurance monster. We have your back.

– Your Hertvik Team

How Special Occasions Can Affect Your Insurance

Many people like to “pop the question” on a holiday, so we have naturally come to expect an influx of calls around Valentine’s Day as clients let us know they have gotten engaged. While we don’t expect to be the first call after you say ‘yes!’, we should be towards the top of your list. Along with other jewelry and valuables, engagement rings are one of the most important things to have “scheduled” on your homeowner policy.

Engagement

Homeowners rely on their insurance to protect not only the value of their home but also the things inside it, including jewelry, silverware, firearms, collectibles or uniquely valued/sentimental possessions. Why is scheduling your jewelry so important? While a standard homeowner’s policy provides coverage for jewelry, it does have limitations. Standard homeowners insurance policies cap the amount of coverage available for jewelry and other valuables and that amount is often insufficient. Additionally, contents coverage under your homeowners insurance applies to items located at home. Scheduling these items ensures they are covered if lost or damaged outside the home.

 

Here are a few things you might need when you call us to schedule jewelry (like your new engagement ring!):

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A business that deals with over-the-road transportation is highly concerned with substantially minimizing accidents and avoiding cellular distractions. Vehicle accidents, besides interrupting work and creating a loss of business property, have much wider consequences. Accidents also cause severe damage to public and private property and, more significantly, also create injuries and even fatalities. Therefore, persons who drive business vehicles must do so safely.

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Motor Truck Cargo Coverage

A major activity of commercial trucking is transporting cargo. There are two parties with a huge interest in the cargo: the property’s owner and the trucking company or independent trucker transporting that property. Usually, it is the trucker’s responsibility to arrange for insurance. Insurance protection becomes the trucker’s burden since that is the party having custody and control of both the vehicle and the goods being shipped. Motor Truck Cargo coverage responds to a substantial, combined exposure. Specifically, it protects against a liability similar to taking a house full of expensive contents on the road for a long trip.

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Certificate of Insurance

Business transactions frequently require the valuable protection provided by insurance. A Certificate of Insurance is a document that is often requested as proof that adequate insurance exists. A certificate is not the same as a policy and certificates do not affect the coverage provided by a particular insurance policy. Therefore, requests to “endorse the certificate of insurance” are inappropriate and misleading. A certificate is a separate document that is used to comply with a common contract requirement to verify certain types and amounts of insurance.

Certificate holders, the entity or party requiring the certificate, often demand that they appear as “additional insureds.” This requires an endorsement (change) to the policy and it gives them coverage for injury or damage resulting from the contract.

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Pollution

Why Do All Types of Contractors Need Contractor Pollution Liability?

Environmental claims can happen to any contractor.

Contractors often assume that claims arising from operations are covered by their general liability policy. Most commercial general liability policies have total pollution exclusions which means contractors are bare in the event of an alleged environmental claim.  The Contractor Pollution Liability Policy (CPL) provides third-party coverage for bodily injury, property damage, cleanup, and related defense costs for pollution events.

The following examples are a sampling of the types of claims that could happen to a non-environmental contractor and have a devastating effect on their businesses.

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Jewelry - Personal Property

For many of us, our home is the most significant asset we’ll acquire in our lifetime, and we rely on our homeowners insurance to protect its value.  A homeowners policy also provides coverage for your personal property including jewelry, silverware, firearms, and other collectibles or uniquely valuable possessions. These policies usually include a dollar limitation on the amount the policy will pay for specific categories of valuables like jewelry. Coverage for these types of property is severely restricted because they are valuable, easily damaged, and prone to be stolen.

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Independent Vs. Captive Agents

The Benefits of an Independent Insurance Agency: Independent vs. Captive Agents

Our roots as an independent insurance agency go back almost 75 years.  We’re proud to carry the independent insurance agency label because of what it means to our clients.  As an independent agency we work with multiple insurance carriers instead of being limited to just one.  At Hertvik Insurance we work with more than 20 insurance carriers.  We can explore the market on your behalf to find the best price and coverage for your unique situation.

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Understanding Joint Ventures

A joint venture is an entity formed by two or more businesses in order to pursue a specific purpose for a specified period of time. While some states require joint ventures to be legally filed, other states recognize any entity that meets the definition. A partnership differs from a joint venture as the former lasts indefinitely and its purpose may change.

A joint venture (or JV) can consist of sole proprietors, corporations, partnerships or, any combination of these entities. Such ventures often bring together two areas of expertise to be applied to a single objective. Therefore, JVs allow the participating entities to capitalize on that combined expertise for a specified time period. JVs may also consist of entities that are, typically, rivals in the same market that may join forces for a commercial activity that they are unable to pursue alone (typically due to size, resources or expertise).

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What to Consider When Preparing for Disaster

No business wants to face an event that could seriously curtail or even shut down operations. Unfortunately, few businesses have plans to deal with such a disaster. It is not unusual for a business to overlook creating disaster plans. Further, companies that do have disaster or continuity plans in place often fail to update their plans on a regular basis. Besides having an updated plan, it is also important to test their plans.

Business decision makers must spend time preparing for the possibility of catastrophe. It could be a natural event, or it could have a human origin. Regardless, an owner, manager or executive must think about the many events that could either temporarily or permanently interrupt their business. In other words, a business must consider what threats exists to their normal, profitable operations. The task may initially appear overwhelming. However, it is just a matter of considering what the business does; where it does it; how it does it; and why it does it; then, examine what could happen to stop any of these things.

Natural interruptions could be caused by wind and rainstorms, flood, snow/ice storms, earthquakes, extended or extreme temperatures, etc. Human events may include fires, break-ins, mobs, sabotage, etc. Typically, a thorough consideration of problems involves identifying the worst possible things that could occur…even when their chance of happening is remote. Remember that a single, unanticipated event could cripple or even terminate a business, so you need to have a plan that contemplates a wide variety of harmful situations.

Consideration must be given to a business’ physical structures and property, machinery/equipment, management, finances, employees, products, stock, finished goods and goods in process, services, communications, transportation, contractual obligations, competition, suppliers, distribution, and so on.

Recovering from disaster depends upon many factors. Regardless the reason for a business suffering a serious interruption, the goal must focus on resuming normal operations as quickly as possible. Getting back into business often depends upon insurance, but other arrangements may be necessary and even be more important. Consider plans that include the following:

  • Arranging use of another location to run the business
  • Having duplicates of key business records (kept at another location)
  • Arranging other sources of product supplies if a key supplier’s business is interrupted
  • Having access to substitute production machinery
  • Buying and maintaining generators/alternate sources of light and power

When considering how to deal with events that could threaten your business, the biggest disaster could be the failure to create a viable disaster recovery plan. Contact us if you have any questions, or if you would like to consider disaster recovery coverage for your business.

Commercial Lines

Mike McAvinue – Vice President of Commercial Lines

The insurance industry is constantly undergoing changes that are likely to impact business owners.  At Hertvik Insurance, we monitor these changes so we can help our clients navigate them with confidence.  The most significant changes we see today revolve around pricing, new technology, and some emerging lines of business.

Property-Casualty pricing remains favorable overall with modest increases averaging 3.5% in Q1 2019, according to The Council of Insurance Agents & Brokers. Commercial Property, General Liability, Inland Marine, and Umbrella lines should remain competitive through 2020.

While overall pricing is favorable, profitability in Commercial Auto remains a significant challenge for many insurers. Distracted driving and the increased cost of vehicle repairs are making this line of business increasingly unprofitable.  A minor fender-bender ten years ago resulted in a repair bill of $600 for a new bumper; today that same fender-bender can easily cost $4,000 because of the electronics and sensors now found in many bumper systems.  As a result, we expect commercial auto rate increases to continue while some carriers also pullback in terms of their appetite or demand higher deductibles. Businesses with a history of auto-related losses will bear the brunt of these actions.

Technology heavily influences the insurance industry, and continually developing technological advancements will ultimately benefit insureds by improving carrier efficiency and rate accuracy. Developments including predictive analytics, artificial intelligence, the Internet of Things (IoT), and telematics are just a few heavy influencers.  We’ll dive deeper into these areas in an upcoming issue.   

Beyond rate and tech trends, we see a significant uptick in demand for some specific areas of coverage. Cyber Liability, Employment Practices, and Directors and Officers coverage have dominated many of our conversations in 2019. As the demand for these coverage options increases, more carriers have begun offering them, resulting in better pricing and more choices.

Overall, industry pundits foresee continued pricing stability in commercial lines.  AM Best, a credit rating agency tasked with predicting the future health of the insurance market, has a stable market outlook for commercial lines in 2019. 

For more information, please reach out to your Hertvik Insurance Group representative.    

Hertvik Insurance
800.467.3254 – www.hertvik.com