Insurance Requirements For Contractors Under the NJ Home Elevation Law

After Super Storm Sandy many homeowners were required to raise their houses to be in compliance with new regulations for flood insurance.  Many of our customers were in a bind to find contractors who did such work.  Once an experience contractor was found, the next hurdle was that he has to have the right kind of insurance to perform this kind of work.

In August 2014 Governor Christie signed into law the requirement that contractors doing home elevation work have to carry a certain kind of insurance and have a certain level of experience.

Under the new law a contractor will have to carry a minimum of $1,000,000 of Commercial General Liability coverage.  This provides coverage for bodily injury or property damage to others that occur during the raising of a house.  An exclusion found in a general liability policy is there is no coverage for damage to the house that is being raised.

With that in mind the new law also requires that the contractor carry another insurance policy that covers the actual house being raised.  The law refers to this policy as “Cargo or other insurance that specifically covers home elevation activities.”  In the Insurance Industry we call it a Riggers Liability policy.  The limit of this policy is $1,000,000.

There is mention, too, that the contractor shall also provide $500,000 of coverage for the contents of the residential premises that are damaged during the home raising but not covered by the homeowners own insurance policy.  So if you have a house being raised and resulting damage comes from this work, your insurance carrier will have to be notified because they may pay for at least the personal contents in your home.

When it comes to experience the law now requires that the contractor has 5 years in performing this kind of work.  If the contractor does not have the required experience then the employee of the contractor doing the work must have the required 5 years of experience.

The NJ Department of Community Affairs will be the government agency that is responsible to figure out the additional rules and regulations which have yet to be revealed as of the writing of this article.

If a contractor says to you that they carry insurance, ask them for a “Certificate of Insurance.”  Their insurance company or insurance agent can provide them one.

The insurance certificate will have two different areas to show Commercial General Liability and the Riggers Liability coverage mentioned above.

The Myth of Cybercrime and Small Businesses

Cybercrime Graphic“Cybercrime” – It happens to giant retailers like Target, where the personal information of 70 million customers was compromised from a point-of-sale system breach in late December last year.

It happens to e-commerce behemoths like Ebay, where the personal information of 233 million users fell victim to 2014’s biggest hack thus far.

The truth? No business is too small.

Smaller businesses are often attractive targets for cybercrime due to their weak—or often nonexistent—security measures.  Here are the main reasons why:

  • “We’re too small.” Hackers can target thousands of small businesses in a single batch. Techniques originally created for larger, sophisticated targets are trickling down to virtually anyone.
  • “We don’t have anything a hacker wants.” Whether it’s credit card information, simple customer details, or various bits of intellectual property, all unsecured data could be seconds away from the black market.
  • “We’re safe.” Simple ignorance may be the biggest issue, and the statistics don’t lie. Around 85% of small business owners feel they are safe, yet a staggering 40% don’t even have data backed up in a second location.

Within six months of a cyber attack, roughly 60% of small business will be forced to close. Don’t join that statistic. Follow these steps:

  • Make sure antivirus software is up to date.
  • Secure Wi-Fi networks.
  • Train employees in cyber security principles.
  • Use a firewall for your Internet connection.
  • Backup all important data in a local drive.
  • Control physical access to your computers and network components.
  • Require individual user accounts for each employee.
  • Change passwords regularly.

In addition to the listed tips, the Federal Communications Commission (FCC) provides a tool for small businesses that can create and save a custom cyber security plan for your company that will address your specific business needs and concerns.  It can be found at www.fcc.gov/cyberplanner.

The bottom line: Take the time to assure you’re being proactive—not reactive—in dealing with cybercrime.

College Students and Insurance Coverage

The days are getting shorter; the nights are getting cooler. The telltale signs of the approaching school year are ever-present. Now is the time to review your insurance policies to assure your new college students have the proper insurance coverage.

Personal Property Insurance College Student Insurance Coverage

For college students living in on-campus dormitories, there’s a good chance your homeowners insurance policy will cover their belongings. Check to make sure more expensive equipment like electronics and furniture are included.

The story changes for students living in off-campus housing. Most insurance companies consider off-campus apartments and houses a separate permanent residence, and it’s likely additional renter’s insurance will be needed to adequately cover your student’s personal property.

Car Insurance 

If your college student will not have a car during the school year, don’t assume it’s a good idea to drop them from your insurance plan. Most insurance companies have a discount for students going to school 100+ miles from home. Keeping students covered also allows them to drive when they’re home on breaks.

If your student takes a car to school, be sure to inquire about good grade discounts. Even if it’s just one semester of a shining GPA, many insurance companies just need a single piece of proof to apply the discount.

Medical Coverage  

In most scenarios, college students will remain covered on their parent’s health plan while away at school as long as they are younger than 26 years of age. Consider any potential geographical repercussions, especially if your student is attending school out-of-state. Many health plans have geographical network limitations; however, some offer special programs for college students.

The benefit of working with a full service agency is that your advisor has the ability to coordinate all of these policies and confirm that proper coverage is in place.  Give one of our advisors a call before your student leaves home to make sure the potential gaps are properly covered.

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Who Pays for Fallen Tree Damage?

It’s the morning after a storm.  A long branch from your neighbor’s majestic oak tree is now sitting in your backyard; chunks of your roof and gutter are resting next to it along with a crushed fence.  Your neighbor is on the hook for the damages, right?

Fallen Treet

Wrong!

In most cases, once any tree or portion of tree crosses property lines after a natural event like a storm, it becomes that property owner’s responsibility.

It’s the same story with any resulting clean-up duties. Your neighbor bears no legal responsibility to pick up any branches and debris that come to a final resting place on your property as a result of Mother Nature.

While it obviously would be a kind gesture for neighbors to assist with such clean-up and damage reimbursement, they are not legally required to do so.  If we’re talking about a few sticks and leaves, no big deal.  But what if remnants of that majestic oak require the hiring of professional tree removal service, a roofer, and fence company?  Not as painless.

Are there exceptions? Always.  Insurance companies will examine each case individually.

For example, if that majestic oak was more of an unwieldy dead and dying oak, your neighbor may be found guilty of negligence and in turn bear the responsibility.

With hurricane season upon us, familiarize yourself with your homeowner’s policy.  Take the necessary steps to assure you won’t be repairing your wallet along with your roof after the wind settles.

Car-Sharing Services – Are You Covered by Insurance?

Car ShareA press release was recently issued by the New Jersey Department of Banking and Insurance Commissioner Ken Kobylowski alerting consumers to the potential loss of insurance coverage in connection with popular business activities known as car-sharing or Transportation Network Companies (TNC) provided by online firms such as Lyft, SideCar and UberX. TNCs offer transportation services for a fee using smart phone applications to connect potential passengers with drivers offering their personal vehicles. When individuals use their own private passenger automobiles to transport individuals for a fee, they risk driving without proper insurance and/or having inadequate coverage for themselves, their vehicle, their passengers, and third parties who may sustain personal injury and/or property damage.

“Car-sharing is growing in popularity with New Jersey consumers who are obtaining and providing transportation through Internet purveyors,” said Commissioner Kobylowski. “In many cases, there may not be auto insurance coverage for these activities. There may also be legitimate coverage denials under personal automobile policies in the unfortunate event of an accident. Consumers need to use caution when weighing whether to pay for transportation or to make their personal vehicles available to others for a fee through these companies.”

Typically, personal auto insurance policies exclude coverage for drivers using their personal vehicles as “public or livery conveyances,” that is providing rides to members of the public for a fee. In addition, the failure to disclose this use of the vehicle to the insurer may result in the insurer seeking to void the policy for misrepresentation. The TNC may have an insurance policy that purports to cover the driver and passengers while the vehicle is transporting a paying passenger. However, New Jersey consumers should be aware that these policies are not reviewed by the Department. Further, being covered by different policies for different uses of the vehicle is a new concept that has not been tested under our state’s laws and in our courts.

Traditional share-the-expense carpooling or ride-sharing arrangements in which friends, neighbors, or co-workers share driving duties and the cost of gasoline are not considered commercial-type activities and are typically covered by individual insurance policies.

“Garden State consumers should not find out after the fact that they do not have sufficient insurance coverage to engage in TNC activities,” said Commissioner Kobylowski. “Taking steps now, before entering into TNC agreements, can prevent serious financial losses.”

Commissioner Kobylowski offered the following tips for consumers considering TNC transactions: 

  • Carefully review any written agreements offered by a TNC:
  • Before relying on any TNC provided insurance coverage, ask for a copy of the firm’s insurance policy;
  • Consumers should review their own personal auto policies for possible exclusions of coverage for using their vehicle to carry passengers for a fee (also known as “livery”);
  • Consumers should also consult with their carrier or agent to identify the correct type of policy and coverage if they intend to engage in TNC activities including considering purchase of a commercial policy for TNC activities.

For information about auto insurance coverage for this type of vehicle usage call 800-272-4RUE, click www.rueinsurance.com, or email info@rueinsurance.com.

A Quiet Hurricane Season Is Not What You Think

sandy_hurricane_noaaAn article from National Public Radio predicts this summer’s hurricane season to be “Quiet.” That’s not a great way to summarize a hurricane season. It’s like comparing a Jay Z concert at Madison Square Garden to YoYo Ma at Carnegie Hall. Either way a concert is going to happen. It’s a matter of how loud it’s going to be…and, depending on your age, if you need to bring earplugs.

What the National Oceanic and Atmospheric Administration are saying is this year’s hurricane season is expected to be lower than normal. There is a chance that we will see approximately 13 tropical storms. Of these 13 storms, 3 to 6 of them will become hurricanes. Of the 3 to 6 hurricanes, 1 or 2 may grow to a class 3 hurricane.

The average season is: 12 tropical storms, 6 hurricanes, 3 hurricanes a class 3 grade or more.

But don’t be lulled to complacency because the season is expected to be lower than average. Hurricane Sandy went from a class 1 hurricane to a tropical storm just before the eye of the storm made landfall in New Jersey. Still the death toll was 34, total damage estimated at $36.9 billion, and two years after the storm some neighborhoods are radically reshaped.

So regardless of the “Quiet” forecast, you still should be prepared. We talked previously on our blog about what do to do before, during, and after a storm hits. You can also check out the FEMA web site that is dedicated to knowing more about hurricanes and what steps you can take to be prepared.

Remember the maxim “A weather forecaster is the only person who can be wrong and still maintain his job.” So be prepared regardless of what the forecast says.

Teens Know Drinking and Texting Risks but Don’t Always Drive Like They Do!

It is Prom and Graduation Season.  Everyone should be reviewing the risks of distracted driving.  Distracted_drivingFrom drinking or texting while driving to using a designated driver, there is a disconnect between what teenagers acknowledge as risky behavior and what they actually admit to doing behind the wheel, according to a survey from Liberty Mutual Insurance and SADD (Students Against Destructive Decisions).

While teens know certain behaviors and situations are risky, many don’t apply that knowledge when it comes to getting behind the wheel. For example, a good number say that it is acceptable for a designated driver to have alcohol or that a designated driver is simply the most sober person in a group. Also, a majority of teens admit to using a cell phone while driving despite knowing the danger.

DRINK AND DRIVE

According to the survey results, teens claim to understand the dangers surrounding drinking and driving:

  • The majority (86 percent) of teen drivers consider driving under the influence of alcohol to be extremely or very distracting.
  • Only 1 percent of teens define driving under the influence of alcohol as acceptable.
  • Only 5 percent of teens admit to at least sometimes driving under the influence of alcohol.

However, when asked about actual driving behavior involving alcohol, driving “under the influence” takes on a different definition:

  • One in 10 teens who say they never drive under the influence acknowledge that they occasionally drive after having an alcoholic beverage.
  • More than two-thirds of teens (68 percent) who admit to driving under the influence of alcohol say they have done so after having more than three alcoholic beverages.

According to the National Highway Traffic Safety Administration, a quarter of fatal crashes involving young drivers are resulting from drinking and driving.

“While many teens seem to have gotten the message about these driving dangers, the real challenge is to make sure they understand that even a sip of alcohol or a quick text at a red light can be deadly,” said David Melton, driving safety expert with Liberty Mutual Insurance and managing director of global safety. “Teens need to realize it’s not acceptable to put an allowable limit to their engagement in these behaviors – they need to be eliminated entirely when they are behind the wheel.”

DEFINING ‘DESIGNATED’

While underage drinking is never acceptable and always illegal, many teens and parents consider a designated driver to be a safe alternative to impaired driving. In fact, more than half of parents (58 percent) encourage teens to use designated drivers to avoid driving under the influence, and almost half of teens (47 percent) admit to using one.

However, teens’ definitions of “designated” are concerning:

  • Designated Means “Basically Sober”: 21 percent of teens define their designated driver as allowed to have “a little” alcohol or other drugs, as long as they aren’t too impaired to drive.
  • Designated Means “Least Impaired”: 4 percent of teens describe their designated driver as the “most” sober person in the group.

“With teens reporting these lax definitions of what it means to be ‘under the influence,’ a zero tolerance approach is the only answer to prevent potential tragedy,” said Stephen Gray Wallace, senior advisor for policy, research and education at SADD. “The parents and community have a responsibility to initiate and maintain an open dialogue with teens about exactly what driving under the influence means.”

SADD is a peer-to-peer youth education, prevention, and activism organization.

TALKING AND TEXTING

According to the U.S. Department of Transportation, more than 3,300 deaths were reported in 2012 alone as the result of distracted driving, many attributed to talking or texting on a cell phone. Teens seem to understand the dangers of these behaviors:

  • Nearly all (96 percent) teen drivers understand that using a cell phone while driving – either talking or texting – is at least slightly distracting.
  • 62 percent of teen drivers think texting and driving is extremely or very distracting.

However, according to the new data, teen drivers often do not grasp the dangers of what it actually means to use a phone while driving:

  • The majority of teen drivers (86 percent) still admit to using a cell phone behind the wheel.
  • Nearly half (47 percent) of the teen drivers who say they never text while driving still admit to texting at a red light or stop sign.
  • 68 percent of teen drivers admit to reading or replying to text messages while driving.

“It’s critical not only for teens, but for all drivers to understand that any time you pull out your phone when you are driving, whether you’re moving or at a stoplight, your attention is diverted and you put yourself, passengers and others on the road at risk,” said Melton. “If you need to use your phone while driving, find a safe place to pull off the road to make a call or send a text. It’s not worth the risk to respond at a stop sign or before the light turns green.”

Sources: Liberty Mutual and sadd.org

 

Even those who rent face risks. A case for renter’s insurance

You finally moved out of your house to a place you now rent. Maybe you are on your own, maybe you moved in with friends. Either way you are on your own.

Have you ever asked yourself if you had to go out today and buy all new clothes and furniture how much it would cost? Look at the clothes in your closet and ask yourself how much you would have to if this building you lived in burnt to the ground how much would you have to pay to replace all of this?

Don’t be surprised if you see numbers of $10,000 or higher.

What would you do if you had to temporarily live somewhere else while the building you live in was being rebuilt after a fire? How much would it cost you to rent another place? If you got a really good deal on rent in your apartment could you afford to live somewhere else with higher rent?

Did you know the average rent for a one bedroom apartment in New Jersey is around $1,200?

If you have a dog and he bites a guest in your apartment, can you afford to pay his medical bills?

Did you know that in 2011 the average dog bite claim was $29,396?

Do you like to use social media to talk about people, products or services? What would you do if you were sued because you said the wrong thing, at the wrong time, to the wrong person/company?

Did you know that a woman in Texas was sued by a local board of education because she posted criticism about them on her blog? The board claimed her blog posts about the board of education were considered libelous statements.

Be honest with yourself. Can you afford to pay out-of-pocket for any of the above?

What if I told you that you could buy an insurance policy that would provide financial protection for you in the cases mentioned above? Would it be worth it for you?

All of the above are real life scenarios and a well- written renter’s insurance policy can provide you with financial protection for a fraction of the cost.

Call, click, or email us for a quote for a renter’s insurance policy. We would love to talk to you about your concerns and craft an insurance policy that will meet your needs.

PEOs and Employment Practices Liability Insurance

Amazing-InsuranceProfessional Employer Organizations (PEOs) are growing, and more small to mid-size businesses are taking advantage of some of the services which help them cut costs.

One of the advantages that PEOs provide is low cost Employment Practices Liability insurance.  The main reason behind the low cost is the buying power the PEO has in the insurance marketplace.  But one has to look at the fine print to see if the coverage provided through the PEO is sufficient to protect your company’s financial statement.

Recently we worked with a company that provides EPLI coverage at an extremely low cost, $34 an employee.  Here is the protection they were giving our customer:

  • Limit of Coverage: $100,000
  • Defense coverage only
  • $2,000 per claim deductible
  • Choice of legal counsel is decided by the PEO
  • Covers current employees only
  • Claims limited to complaints given to the EEOC or the equivalent state agency.

So what are the problems we see with this low cost insurance protection?

  • No coverage for any court awarded judgments or settlements of claims outside of the courts.
  • EPLI claims are only limited to those where an employee filed a complaint through a government agency.  We see claims brought directly against our client’s through a lawyer, especially wage and hour claims.
  • No coverage for claims from former employees who were not enrolled in the PEO.
  • No coverage for claims from 3rd parties like your customers or vendor who claim to be harassed or discriminated by one of your employees.

In a previous post to our blog we talked about what the costs were for an EPLI insurance policy.  In the examples we gave the average cost per employee varied from $89 to $171 and provided the following protection:

  • Limit of coverage: $1,000,000
  • Defense and Damages coverage
  • $2,500 per claim deductible
  • Client chooses which law firm to use from the insurance carrier’s highly experienced team of lawyers
  • Covers current, past, and future employees
  • Claims are not limited to EEOC complaints but from any lawyer.

Having a separate EPLI insurance policy to cover your company, in addition to coverage from the PEO, is a smarter solution that reduces your long term cost of risk.

If you are in a PEO or are contemplating joining one we created a coverage analyzer which will help you gauge the strength and weaknesses of their EPLI insurance policy.  And we are always here to help.  Give us a call at 1-800-272-4RUE or drop us a line here.