Commercial insurance pitfalls


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Debra Verstegen, Dickenshied Cravillion Insurance Services, presentation to De Pere Area Chamber of Commerce February 13th, 2013 De Pere at Dawn. "Financial Fitness" panel

Commercial insurance pitfalls

  1. 1. Presented by Dickenshied Cravillion Insurance Services
  2. 2. Debra Verstegen, Agent Over 15 years of experience in commercial property & casualty, commercial health insurance, life & disability insurance, business continuation planning, and estate planning.Dickenshied Cravillion Insurance Services is a full service independent agency located inEast De Pere, serving Northeast Wisconsin since 1872.
  3. 3. Recent Example: Total blanket Replacement Cost for 3 buildings and Business Personal Property was listed on a business policy for $789,000.Realistic Replacement Cost is really $1,850,000.The business had been with the same agent for years. The agent had supposedly been doing annual reviews.
  4. 4. If my building was destroyed, I would…. Build the same building …same floorplan, square footage, materials, etc. Build a completely different building Take the money and move to a warmer climate
  5. 5.  REPLACEMENT COST : Build the same building …same floorplan, square footage, materials, etc. FUNCTIONAL REPLACEMENT COST or AGREED VALUE: Build a completely different building. ACTUAL CASH VALUE: Take the money and move to a warmer climate. Depreciated value.
  6. 6. The property owner is responsible for primary coverage of his building, unless you have a triple net lease that requires you to cover the building.What if you, the tenant, are responsible for the damage? SUBROGATION
  7. 7. Incorrect information in insurance contracts may be the fault of the insured client…..or the agent.It’s YOUR legal contract. Make certain it is right.
  8. 8. One area in which the insurance industry falls short is…. DISCLOSURE.Take the time to read the exclusions in each policy part. Especially watch out for PUNITIVE DAMAGES EXCLUSIONS(Insurance companies must pay punitive damages in Wisconsin, unless the carrier specifically excludes them.)
  9. 9. C corp: Owners are included unless they exclude themselves.S corp: Owners are included unless they exclude themselves.LLC: Owners are excluded unless they include themselves.Sole proprietorship: Owners are excluded unless they include themselves
  10. 10. If you are excluded from Work Comp, you need to be certain that your health insurance coverage has 24 hour coverage (would cover work-related injury).If you are covered under a spouse’s plan, you definitely do NOT have 24 hour coverage.If you are on a group or individual plan, your carrier likely needs to be notified that you need 24 hour coverage, and there may or may not be a charge for it.Strongly recommended: Long-term disability coverage to protect your income in the event you are unable to work.
  11. 11.  S or C Corp: Minimum payroll $13,312 Maximum payroll $66,612 LLC, Sole Proprietorship, Partnerships $44,408 flat payroll
  12. 12. If you have employees, you need this. General Liability coverage does NOT cover employment related liability claims: harassment, discrimination, and wrongful termination
  13. 13.  Race Color National Origin Religion Sex Age Disability
  14. 14.  Risk management help. Have best practices in place. Document, document, document. Your insurance carrier will defend you. Defense costs. Insurance limit available to pay judgments.