“Key Man” Insurance
Losing an important employee who plays a large role in the company is a very tough ordeal for the whole organization. There is a large risk that the whole operation may be affected or hindered. For these situations there is the “Key Man” Insurance. It is intended to protect the company from a loss of the “key employee”. Unlike the traditional disability insurance wherein the employee is the recipient of the benefits, here in “Key Man” Insurance the company is the one who would reap the benefits. The insurance vehicles for key man insurance can take two forms: Disability insurance or life insurance. Even if you are your company’s only “key man”, you should consider taking out key man insurance on yourself. If there is anyone in your organization that you could not operate without or who's skills and experience drive your profitability then you might want to consider purchasing this type of insurance.
Tuesday, December 14, 2010
Thursday, December 2, 2010
A Nice Note From A Client Today
I really appreciate the occasional notes of acknowledgement I get from my insured's. I really need to do a better job of sending the same kind of notes to those who work hard for me.
"Thank you for following up on this. I appreciate the professional manner Blake and yourself handled this with our insurance company. You fought for our little business. In addition, Blake went a long way in educating me (your client) about our coverage, gave me (your client) options on how to go forward, shift coverage and still get the protection we need. In short, I am a grateful customer."
"Thank you for following up on this. I appreciate the professional manner Blake and yourself handled this with our insurance company. You fought for our little business. In addition, Blake went a long way in educating me (your client) about our coverage, gave me (your client) options on how to go forward, shift coverage and still get the protection we need. In short, I am a grateful customer."
GENERAL LIABILITY TO THE "T"
Most business owners and professional service providers purchase General Liability insurance because it is a very common requirement that they have it by the people they do business with. How many people actually understand General Liability insurance and what it is for?? I want to take a minute to walk through an example which will hopefully help us all understand it a little better. I think if we understand it a little better then we might have a greater appreciation for it, which will also help us to know why it can be so dang expensive!
For my made up example, I am going to use John's Manufacturing Co. John manufactures children's toys and ships them to various distribution outlets. EVERYBODY John wants to do business with is requiring him to provide them a certificate of insurance for General Liability which includes Products and Completed Operations. The retail outlets that sell his goods want to be Additional Insureds on John's policy. John has never had any problems with any of his toys and has never had a single complaint. So, let's address some of the questions as to why John needs to have this policy in place.
What does the General Liability policy cover?
This policy protects John's Manufacturing Company againt Bodily Injury or Property Damage arising out of his operations. Generally, defense costs are outside the limits of insurance so any claim or lawsuit that is brought against John's Manufacturing Co. for Bodily Injury or Property Damage will be defended by his insurance company until settled. Any idea how much those defense costs alone can add up to?? Then, any settlements will reduce his limits for the policy year accordingly.
Nothing has ever happened before. What could possibly go wrong? Here are a few scenarios:
A school class visits John's Manufacturing facility on a field trip. While touring the buildings, one of the students is badly burned by a piece of equipment. The students family brings a lawsuit against John's Manufacturing. This type of injury could happen at any business to any visitor. A slip and fall, a negligent employee, failure to block access to a dangerous area, etc. Your premises can be a huge liability exposure for your company.
A child is poisened by a chemical used in the paint on the toys and the family brings a lawsuit against John's Manufacturing because of the unsafe product. Does your business have any products/completed operations that could potentially harm somebody?
John hires an electrician to update some wiring in his building. During the process, the electrician starts a fire which burns a large portion of the neighboring building which belongs to another business. The other business sues the electrician AND John's Manufacturing for their damages. John's insurance company will defend him in this circumstance until a settlement is made. Is what might happen is that the business sues the electrician but finds out that they dont have proper insurance or their insurance is insufficient, then they drag John's Manufacturing into the lawsuit. This is where the importance of hiring quality subcontractors comes into play and getting insurance certificates from them naming you as an Additional Insured if they are going to perform some work or provide some product on your behalf. This is why we are all required by the people we do business with to carry our own insurance!
I hope this helps clarify the General Liability policy a little bit. I am happy to answer any questions or discuss certain circumstances with you individually anytime. Truth is, there is a wide range of exposures for any business or individual that provides a product or service. The examples are endless and some of the lawsuits/settlements that go through an insurance carrier would amaze you. Remember, your business and all of it's assets are at stake and in some instances you can personally be liable in these situations. As a side note, an Umbrella policy provides excess limits to your insurance policy in the event that you have a huge claim or your base limits are exhausted. It is not uncommon for us to insure our business clients with a $5,000,000 Umbrella Policy on top of their $1m/$2m General Liability limits but these Umbrella's can go up to whatever limits make you feel comfortable.
For my made up example, I am going to use John's Manufacturing Co. John manufactures children's toys and ships them to various distribution outlets. EVERYBODY John wants to do business with is requiring him to provide them a certificate of insurance for General Liability which includes Products and Completed Operations. The retail outlets that sell his goods want to be Additional Insureds on John's policy. John has never had any problems with any of his toys and has never had a single complaint. So, let's address some of the questions as to why John needs to have this policy in place.
What does the General Liability policy cover?
This policy protects John's Manufacturing Company againt Bodily Injury or Property Damage arising out of his operations. Generally, defense costs are outside the limits of insurance so any claim or lawsuit that is brought against John's Manufacturing Co. for Bodily Injury or Property Damage will be defended by his insurance company until settled. Any idea how much those defense costs alone can add up to?? Then, any settlements will reduce his limits for the policy year accordingly.
Nothing has ever happened before. What could possibly go wrong? Here are a few scenarios:
A school class visits John's Manufacturing facility on a field trip. While touring the buildings, one of the students is badly burned by a piece of equipment. The students family brings a lawsuit against John's Manufacturing. This type of injury could happen at any business to any visitor. A slip and fall, a negligent employee, failure to block access to a dangerous area, etc. Your premises can be a huge liability exposure for your company.
A child is poisened by a chemical used in the paint on the toys and the family brings a lawsuit against John's Manufacturing because of the unsafe product. Does your business have any products/completed operations that could potentially harm somebody?
John hires an electrician to update some wiring in his building. During the process, the electrician starts a fire which burns a large portion of the neighboring building which belongs to another business. The other business sues the electrician AND John's Manufacturing for their damages. John's insurance company will defend him in this circumstance until a settlement is made. Is what might happen is that the business sues the electrician but finds out that they dont have proper insurance or their insurance is insufficient, then they drag John's Manufacturing into the lawsuit. This is where the importance of hiring quality subcontractors comes into play and getting insurance certificates from them naming you as an Additional Insured if they are going to perform some work or provide some product on your behalf. This is why we are all required by the people we do business with to carry our own insurance!
I hope this helps clarify the General Liability policy a little bit. I am happy to answer any questions or discuss certain circumstances with you individually anytime. Truth is, there is a wide range of exposures for any business or individual that provides a product or service. The examples are endless and some of the lawsuits/settlements that go through an insurance carrier would amaze you. Remember, your business and all of it's assets are at stake and in some instances you can personally be liable in these situations. As a side note, an Umbrella policy provides excess limits to your insurance policy in the event that you have a huge claim or your base limits are exhausted. It is not uncommon for us to insure our business clients with a $5,000,000 Umbrella Policy on top of their $1m/$2m General Liability limits but these Umbrella's can go up to whatever limits make you feel comfortable.
Tuesday, November 30, 2010
Getting To Know Me...
I have read a lot of biographies, self-development and business books over the years and just wanted to put down a few things I have learned and share a little bit about myself. It may not be worth much to you but it is a good way of reminding me of the things I should be doing to build a profitable book of business and create valuable relationships along the way. Also, hopefully by getting to know me a little bit we can find more common ground and it will give me an opportunity to know you better as well. I dont want to be seen as some insurance freak that reads policies all day :) Please feel free to comment and add your business insights and philosophies and share your interests also!
1) "Never Eat Alone" This is a book I read by Keith Ferazzi about building your network. This has been a hard thing for me to do but one way I have been able to use it is by trying to attend a lunch group at least once a week. For me, these groups include Exchange Club, WSU roundball, Rotary, local business presentations, etc. I find that I am able to spend about an hour of quality time with people who have some of my same interests and who are generally eager to stay in contact and help each other in our business endeavors.
2) Never burn bridges. This can be difficult when you get to the end of a conversation with a long-term client who is ending the relationship because they found a better price or some other reason. My theory has been and always will be that I should respect my clients decisions and try my best to continue our relationship whether I get their business or not. For me, it isnt about business so much as it is about people. Nevertheless, I know that a clients business has to be earned each and every year and am committed to doing everything in my power to keep my clients and provide the best price and service possible. Sometimes when you lose a client it is only a matter of time before they come back seeking your help. If you act bitter and upset about their decision then chances are they won't ever be coming back.
3) Apply your knowledge. Many of us spend countless hours studying our trade and trying to become experts in our industry but when it comes down to finding new business we end up doing as little as possible to close the deal. What happens when we apply our knowledge and spend adequate time analyzing and making recommendations for our prospects? We win. The amount of effort you put into a proposal will clearly show during the presentation. Rather than getting the specs and quoting, we need to spend more time analyzing, making recommendations, asking questions, negotiating, and understanding the agreements if we are to truly bring value to our clientele.
4) "The Golden Rule". We all know what it is, but do we apply it in our business transactions? Do we value relationships, service, expertise, and credibility instead of focusing only on the price? I find it difficult when I am buying a new car or a house or negotiating my cable bill to try to suck every dollar I possibly can out of my provider. I understand that they need to make a profit also and I seek a fair price based on the options available to me. I hope that my clients accept this principle as well because I cant always guarantee that there isnt some unknown or overlooked insurance company that will pop up out of nowhere and beat my price. I normally make suggestions to my clients after reviewing a number of viable and competitive options and it may not always be the one with the lowest price.
5) Hard Work. There really is no substitute for putting in the hours, making the phone calls, meticulously reviewing proposals and quotes, responding to emails, making yourself available, seeking others opinions, understanding the marketplace, providing excellent service, going the extra mile, and giving your all. Day in and day out there are no excuses. This is what it takes to be successful in any economy. I am a firm believer that the harder I work the luckier I get. It always takes a little luck but that luck is usually a direct product of doing everything in my power to make it happen.
6) Have Fun. For me, work is fun for the most part but it cannot fill this need. I have decided that I need to take a break every once in a while to go on vacation, spend time with my family, or take an occasional day off so I can be my best self when I am in the office. I like to know what my clients do for fun so we have things to talk about besides insurance when we get together. I find that it is generally pretty easy to find common interests with people and it makes working with them much more enjoyable knowing that they are real people and not 100% business all the time.
Here are a few of my interests you may not be aware of. If you have some of these same interests, let's talk about it the next time we get together!
I am an avid exerciser, I played golf in high school, I served a church mission for 2 years in El Salvador, I lived in Puerto Rico for 5 months selling home security, I like to play/watch any sport, I am a snowboarder and a skiier, I love to boat in the summertime, I love to travel and have been fortunate to visit many states and other countries including: Mexico, Canada, Peru, UAE, and India. I like to hunt and fish. I like to read business books, american history, and biographies. I enjoy Utah and BYU athletics but at heart I am a Weber State Wildcat! Most of all I like spending time with my wife and my 10 nieces and nephews.
I am generally an open book. I like to be completely honest with my clients about who I am and what I can do for them. I do not use shady sales tactics and I would never hesitate to answer a client's phone call. I don't always have every answer immediately but I can always find the answer. I dont overpromise or always say what you want to hear but I can back up my words every time.
1) "Never Eat Alone" This is a book I read by Keith Ferazzi about building your network. This has been a hard thing for me to do but one way I have been able to use it is by trying to attend a lunch group at least once a week. For me, these groups include Exchange Club, WSU roundball, Rotary, local business presentations, etc. I find that I am able to spend about an hour of quality time with people who have some of my same interests and who are generally eager to stay in contact and help each other in our business endeavors.
2) Never burn bridges. This can be difficult when you get to the end of a conversation with a long-term client who is ending the relationship because they found a better price or some other reason. My theory has been and always will be that I should respect my clients decisions and try my best to continue our relationship whether I get their business or not. For me, it isnt about business so much as it is about people. Nevertheless, I know that a clients business has to be earned each and every year and am committed to doing everything in my power to keep my clients and provide the best price and service possible. Sometimes when you lose a client it is only a matter of time before they come back seeking your help. If you act bitter and upset about their decision then chances are they won't ever be coming back.
3) Apply your knowledge. Many of us spend countless hours studying our trade and trying to become experts in our industry but when it comes down to finding new business we end up doing as little as possible to close the deal. What happens when we apply our knowledge and spend adequate time analyzing and making recommendations for our prospects? We win. The amount of effort you put into a proposal will clearly show during the presentation. Rather than getting the specs and quoting, we need to spend more time analyzing, making recommendations, asking questions, negotiating, and understanding the agreements if we are to truly bring value to our clientele.
4) "The Golden Rule". We all know what it is, but do we apply it in our business transactions? Do we value relationships, service, expertise, and credibility instead of focusing only on the price? I find it difficult when I am buying a new car or a house or negotiating my cable bill to try to suck every dollar I possibly can out of my provider. I understand that they need to make a profit also and I seek a fair price based on the options available to me. I hope that my clients accept this principle as well because I cant always guarantee that there isnt some unknown or overlooked insurance company that will pop up out of nowhere and beat my price. I normally make suggestions to my clients after reviewing a number of viable and competitive options and it may not always be the one with the lowest price.
5) Hard Work. There really is no substitute for putting in the hours, making the phone calls, meticulously reviewing proposals and quotes, responding to emails, making yourself available, seeking others opinions, understanding the marketplace, providing excellent service, going the extra mile, and giving your all. Day in and day out there are no excuses. This is what it takes to be successful in any economy. I am a firm believer that the harder I work the luckier I get. It always takes a little luck but that luck is usually a direct product of doing everything in my power to make it happen.
6) Have Fun. For me, work is fun for the most part but it cannot fill this need. I have decided that I need to take a break every once in a while to go on vacation, spend time with my family, or take an occasional day off so I can be my best self when I am in the office. I like to know what my clients do for fun so we have things to talk about besides insurance when we get together. I find that it is generally pretty easy to find common interests with people and it makes working with them much more enjoyable knowing that they are real people and not 100% business all the time.
Here are a few of my interests you may not be aware of. If you have some of these same interests, let's talk about it the next time we get together!
I am an avid exerciser, I played golf in high school, I served a church mission for 2 years in El Salvador, I lived in Puerto Rico for 5 months selling home security, I like to play/watch any sport, I am a snowboarder and a skiier, I love to boat in the summertime, I love to travel and have been fortunate to visit many states and other countries including: Mexico, Canada, Peru, UAE, and India. I like to hunt and fish. I like to read business books, american history, and biographies. I enjoy Utah and BYU athletics but at heart I am a Weber State Wildcat! Most of all I like spending time with my wife and my 10 nieces and nephews.
I am generally an open book. I like to be completely honest with my clients about who I am and what I can do for them. I do not use shady sales tactics and I would never hesitate to answer a client's phone call. I don't always have every answer immediately but I can always find the answer. I dont overpromise or always say what you want to hear but I can back up my words every time.
Friday, November 19, 2010
IMPROVE YOUR INSURABILITY!
One of the things I try to do for each of my clients is to build a positive insurance profile and summary before submitting the account to an Underwriter. Underwriters LOVE information. They like to see details, descriptions, brochures, contracts, updates, etc. Most importantly, they like to see an ongoing Risk Management program. This shows the insurance company that the owner is doing everything in their power to prevent claims. These are the companies that get the credits and have access to more insurance carriers.
Often times, insurance carriers will offer quotes in certain industries based on their definition of “Best in Class.” For example, they may not typically write a Waste Hauler but if they receive a detailed submission showing the things they want to see, then they will likely consider offering a very competitive quote. Why? Because the truth is that most businesses purchase insurance in lieu of implementing proper risk management. The ones that do implement a quality risk management program will reap insurance rewards. Many insurance companies will request an inspection by an outside agency or send their own before deciding whether to provide a quote on something. So, what are they looking for?
Things to make a building look better to an insurance company include:
• Hard-wired smoke detectors
• Proper handrails and fire escapes
• Child-safe window hardware
• Sidewalks free of major cracks
• Closed fire doors with proper panic hardware
• Well-lit hallways and walkways
• Following regulations for elevators and laundry rooms
• Control of all maintenance issues: Practice good maintenance–no wet floors
• Do routine repairs
• Mold eradication
Make sure your risk profile includes all safety-related improvements in the property such as any alarm systems, security cameras, addition of a doorman, improved lighting, and anything else that makes your building more appealing to an insurance underwriter who can then apply credits for the safety measures taken.
Advise your insurance broker of upgrades and repairs to your building. Upgrades to major systems such as heating, electric, and plumbing greatly improve your risk profile and can present your property better to the insurance company. This may lead to better pricing and broader terms when the insurance companies offer you quotes. Insurance companies show their appreciation to those risks that have improved profiles and ongoing risk management by offering them lower rates and policies with broader terms.
Similar risk management principles apply to Auto Insurance, Workers Compensation, and General Liability. Continued maintenance, proper safety restraints and trainings, quality PR and documentation, etc. will greatly improve your insurability.
Wednesday, November 17, 2010
WHY DO I NEED EMPLOYEE DISHONESTY COVERAGE??
WHAT IS IT?
This insurance protects the employer from financial loss due to the fraudulent activities of an employee or group of employees. The loss can be the result of the employee’s theft of money, securities or other property of the employer.
WHY DO I NEED IT?
Fraud and embezzlement in the workplace is on the rise. The Association of Certified Fraud Examiners (ACFE) estimates business losses $400 billion per year or about 6% of total annual revenue. Small companies can be especially effected by theft and embezzlement because they can’t afford extensive safeguards and aren’t large enough to absorb losses. Workplace crime is carried out by employees 80% of the time. One in four employees who has committed fraud against their employer had been with the company more than ten years.
WHAT DOES IT COVER?
This insurance protects the employer from financial loss due to the fraudulent activities of an employee or group of employees. The loss can be the result of the employee’s theft of money, securities or other property of the employer.
WHY DO I NEED IT?
Fraud and embezzlement in the workplace is on the rise. The Association of Certified Fraud Examiners (ACFE) estimates business losses $400 billion per year or about 6% of total annual revenue. Small companies can be especially effected by theft and embezzlement because they can’t afford extensive safeguards and aren’t large enough to absorb losses. Workplace crime is carried out by employees 80% of the time. One in four employees who has committed fraud against their employer had been with the company more than ten years.
WHAT DOES IT COVER?
Stand alone policies are designed to cover employee thefts, robbery and safe burglaries. Coverage can also include:
1. Forgery or alteration
2. Funds transfer fraud
3. Computer fraud
4. Credit card fraud
5. Money order and counterfeit fraud
On a personal note, My brother in law owns a small business which in many instances requires that you hire one person who you trust to undertake a broad range of responsibilities. In his case, he hired someone who was in charge of paying bills, balancing books, depositing checks, etc. After being employed for several years with his company, they found out that this employee had been stealing money and making unauthorized charges on company credit cards then covering them up with other expenses. This can be a huge devastation for a small business that lives by cash-flow.
In another example, a local trucking company recently found out that their controller has been embezzling money from them for a number of years to the sum of about $1.3 million.
Many times the people who are found stealing money from their employer are people who feel they are very trusted and might feel entitled to more money or benefits. The worst thing an employer could do is assume that they have great employees who would never do anything to harm the company. Employee Dishonesty insurance can help protect you against these financial losses. If you questions about this or would like to discuss ways to ensure proper limits and coverage please contact me!
Thursday, November 11, 2010
Insurance Market
Here is a good short article about insurance pricing from the Council of Insurance Agents and Brokers. It is definitely a buyers market right now with pricing being driven down by fierce competition in the industry. We are seeing unprecedented drops in premiums tied to increased coverage. Because of this, I am careful to select 5-7 insurance markets for each of my accounts so I can find the best combination of coverage and pricing for my customers. I can't guarantee that there isnt a lower price out there somewhere, because it would be impossible to cover every market. However, I feel that I am doing my job by approaching a good number of companies for each account so we know that our pricing is competitive among the top insurers for each industry. In this type of market, buyers have to be aware that there are insurance companies out there that are trying to buy business by offering extremely low rates. Some of these companies are dangerous to do business with because they have likely cut out portions of coverage or they might be financially unstable and trying to collect whatever premium they can because they know there are people out there who will choose them solely based on price. Sooner or later the market will turn and pricing will start to tighten up and maybe increase. When that happens, you will find much more value in having a relationship with an insurance broker who understands the coverage forms and rates and can negotiate a good product.
COUNCIL SURVEY SHOWS COMMERCIAL PROPERTY/CASUALTY RATES
MELTING IN SUMMER HEAT WASHINGTON, D.C., July 19, 2010
"It’s the same old story," said Council President Ken A. Crerar. "Carriers continue to fight aggressively for new business as capacity flows into the market. It’s like someone forgot to turn off the spigot. No one seems to know when the reservoir will dry up, but in the meantime, it’s definitely a buyers’ market."
Commercial renewal pricing for small, medium and large business accounts continued to decline in the second quarter, compared with the first quarter of the year. Large account rate declines were again slightly more than the other accounts, but pricing for all account sizes was soft, according to The Council’s survey data. All individual commercial lines included in the survey experienced rate decreases, compared with the previous quarter. – Excess capacity chasing market share in the commercial property/casualty marketplace has resulted in another quarter of declining renewal pricing, according to The Council of Insurance Agents & Brokers’ second quarter Commercial P/C Market Index Survey. On average, renewal rates dropped by about 6 percent in the second quarter, compared with a 5 percent decrease in the first quarter of 2010. Brokers across the country reported that capacity was plentiful for all lines:
"New carriers continue to enter the marketplace, further driving rates down. The capacity seems endless at this point."
"Carriers have lots of capacity for new business, but also don’t want to lose renewals. If there’s competition they will lower price."
"Appetite for premium is at a desperate level. New capacity continues to come into the market (inexplicably) and there is not enough premium to feed all the mouths."
"There is an abundance of capacity for D&O and other management liability coverage. Carriers are seeking to maintain market share by cutting premium and expanding coverage."
Buyers found good deals not only on pricing last quarter, but on terms and conditions as well, according to survey comments. "Carriers are open to improving deductibles, terms and conditions in hopes of being able to keep premium flat," said one respondent. Another broker saw "lower deductibles, broader coverage terms, more liberal terms." Still another remarked that there are "generally broader terms, no additional restrictions in coverage."
There was no notable change in customer demand for insurance in the second quarter, the brokers said. Only 26 percent of those surveyed said demand was up – about the same response as in the first quarter.
The economy and credit crisis remain the top concern of brokers across the country.
COUNCIL SURVEY SHOWS COMMERCIAL PROPERTY/CASUALTY RATES
MELTING IN SUMMER HEAT WASHINGTON, D.C., July 19, 2010
"It’s the same old story," said Council President Ken A. Crerar. "Carriers continue to fight aggressively for new business as capacity flows into the market. It’s like someone forgot to turn off the spigot. No one seems to know when the reservoir will dry up, but in the meantime, it’s definitely a buyers’ market."
Commercial renewal pricing for small, medium and large business accounts continued to decline in the second quarter, compared with the first quarter of the year. Large account rate declines were again slightly more than the other accounts, but pricing for all account sizes was soft, according to The Council’s survey data. All individual commercial lines included in the survey experienced rate decreases, compared with the previous quarter. – Excess capacity chasing market share in the commercial property/casualty marketplace has resulted in another quarter of declining renewal pricing, according to The Council of Insurance Agents & Brokers’ second quarter Commercial P/C Market Index Survey. On average, renewal rates dropped by about 6 percent in the second quarter, compared with a 5 percent decrease in the first quarter of 2010. Brokers across the country reported that capacity was plentiful for all lines:
"New carriers continue to enter the marketplace, further driving rates down. The capacity seems endless at this point."
"Carriers have lots of capacity for new business, but also don’t want to lose renewals. If there’s competition they will lower price."
"Appetite for premium is at a desperate level. New capacity continues to come into the market (inexplicably) and there is not enough premium to feed all the mouths."
"There is an abundance of capacity for D&O and other management liability coverage. Carriers are seeking to maintain market share by cutting premium and expanding coverage."
Buyers found good deals not only on pricing last quarter, but on terms and conditions as well, according to survey comments. "Carriers are open to improving deductibles, terms and conditions in hopes of being able to keep premium flat," said one respondent. Another broker saw "lower deductibles, broader coverage terms, more liberal terms." Still another remarked that there are "generally broader terms, no additional restrictions in coverage."
There was no notable change in customer demand for insurance in the second quarter, the brokers said. Only 26 percent of those surveyed said demand was up – about the same response as in the first quarter.
The economy and credit crisis remain the top concern of brokers across the country.
Sunday, November 7, 2010
phil heath Kai Greene Branch Warren after the 2009 Mr Olympia video phil heath met rx
phil heath
video of phil heath Kai Greene and Branch Warren after the 2009 Mr Olympia, phil heath was unlucky at the 2009 mr olympia due to some illness going into the mr olympia bodybuilding contest.
but aspect to see phil heath pushing for the 2010 mr olympia title and in much better condition then the 2009 mr olympia contest.
phil heath is wearing a met rx t-shirt in the video not sure if phil heath is still sponsored by met rx or not now.
Saturated Fat and Insulin Sensitivity
Insulin sensitivity is a measure of the tissue response to insulin. Typically, it refers to insulin's ability to cause tissues to absorb glucose from the blood. A loss of insulin sensitivity, also called insulin resistance, is a core part of the metabolic disorder that affects many people in industrial nations.
I don't know how many times I've seen the claim in journal articles and on the internet that saturated fat reduces insulin sensitivity. The idea is that saturated fat reduces the body's ability to handle glucose effectively, placing people on the road to diabetes, obesity and heart disease. Given the "selective citation disorder" that plagues the diet-health literature, perhaps this particular claim deserves a closer look.
The Evidence
I found a review article from 2008 that addressed this question (1). I like this review because it only includes high-quality trials that used reliable methods of determining insulin sensitivity*.
On to the meat of it. There were 5 studies in which non-diabetic people were fed diets rich in saturated fat, and compared with a group eating a diet rich in monounsaturated (like olive oil) or polyunsaturated (like corn oil) fat. They ranged in duration from one week to 3 months. Four of the five studies found that fat quality did not affect insulin sensitivity, including one of the 3-month studies.
The fifth study, which is the one that's nearly always cited in the diet-health literature, requires some discussion. This was the KANWU study (2). Over the course of three months, investigators fed 163 volunteers a diet rich in either saturated fat or monounsaturated fat.
What the authors decided to focus on instead is the fact that insulin sensitivity declined slightly but significantly on the saturated fat diet compared with the pre-diet baseline. That's why this study is cited as evidence that saturated fat impairs insulin sensitivity. But anyone who has a basic science background will see where this reasoning is flawed (warning: nerd attack. skip the rest of the paragraph if you're not interested). You need a control group for comparison, to take into account normal fluctuations caused by such things as the season, eating mostly cafeteria food, and having a doctor hooking you up to machines. That control group was the group eating monounsaturated fat. The comparison between diet groups was the 'primary outcome', in statistics lingo. That's the comparison that matters, and it wasn't significant. To interpret the study otherwise is to ignore the basic conventions of statistics, which the authors were happy to do. There's a name for it: 'moving the goalpost'. The reviewers shouldn't have let this kind of shenanigans slide.
So we have five studies through 2008, none of which support the idea that saturated fat reduces insulin sensitivity in non-diabetics. Since the review paper was published, I know of one subsequent study that asked the same question (3). Susan J. van Dijk and colleagues fed volunteers with abdominal overweight (beer gut) a diet rich in either saturated fat or monounsaturated fat. I e-mailed the senior author and she said the saturated fat diet was "mostly butter". The specific fats used in the diets weren't mentioned anywhere in the paper, which is a major omission**. In any case, after 8 weeks, insulin sensitivity was virtually identical between the two groups. This study appeared well controlled and used the gold standard method for assessing insulin sensitivity, called the euglycemic-hyperinsulinemic clamp technique***.
The evidence from controlled trials is rather consistent that saturated fat has no appreciable effect on insulin sensitivity.
Why Are We so Focused on Saturated Fat?
Answer: because it's the nutrient everyone loves to hate. As an exercise in completeness, I'm going to mention three dietary factors that actually reduce insulin sensitivity, and get a lot less air time than saturated fat.
#1: Caffeine. That's right, controlled trials show that your favorite murky beverage reduces insulin sensitivity (4, 5). Is it actually relevant to real life? I doubt it. The doses used were large and the studies short-term.
#2: Magnesium deficiency. A low-magnesium diet reduced insulin sensitivity by 25% over the course of three weeks (6). I think this is probably relevant to long-term insulin sensitivity and overall health, although it would be good to have longer-term data. Magnesium deficiency is widespread in industrial nations, due to our over-reliance on refined foods such as sugar, white flour and oils.
#3: Sugar. Fructose reduces insulin sensitivity in humans, along with many other harmful effects (7).
As long as we continue to focus our energy on indicting saturated fat, it will continue distracting us from the real causes of disease.
* For the nerds: euglycemic-hyperinsulinemic clamp (the gold standard), insulin suppression test, or intravenous glucose tolerance test with Minimal Model. They didn't include studies that reported HOMA as their only measure, because it's not very accurate.
** There's this idea that pervades the diet-health literature that all saturated fats are roughly equivalent, all monounsaturated fats are equivalent, etc., therefore it doesn't matter what the source was. This is beyond absurd and reflects our cultural obsession with saturated fat. It really irks me that the reviewers didn't demand this information.
*** They did find that markers of inflammation in fat tissue were higher after the saturated fat diet.
I don't know how many times I've seen the claim in journal articles and on the internet that saturated fat reduces insulin sensitivity. The idea is that saturated fat reduces the body's ability to handle glucose effectively, placing people on the road to diabetes, obesity and heart disease. Given the "selective citation disorder" that plagues the diet-health literature, perhaps this particular claim deserves a closer look.
The Evidence
I found a review article from 2008 that addressed this question (1). I like this review because it only includes high-quality trials that used reliable methods of determining insulin sensitivity*.
On to the meat of it. There were 5 studies in which non-diabetic people were fed diets rich in saturated fat, and compared with a group eating a diet rich in monounsaturated (like olive oil) or polyunsaturated (like corn oil) fat. They ranged in duration from one week to 3 months. Four of the five studies found that fat quality did not affect insulin sensitivity, including one of the 3-month studies.
The fifth study, which is the one that's nearly always cited in the diet-health literature, requires some discussion. This was the KANWU study (2). Over the course of three months, investigators fed 163 volunteers a diet rich in either saturated fat or monounsaturated fat.
The SAFA diet included butter and a table margarine containing a relatively high proportion of SAFAs. The MUFA diet included a spread and a margarine containing high proportions of oleic acid derived from high-oleic sunflower oil and negligible amounts of trans fatty acids and n-3 fatty acids and olive oil.Yummy. After three months of these diets, there was no significant difference in insulin sensitivity between the saturated fat group and the monounsaturated fat group. Yes, you read that right. Even the study that's selectively cited as evidence that saturated fat causes insulin resistance found no significant difference between the diets. You might not get this by reading the misleading abstract. I'll be generous and acknowledge that the (small) difference was almost statistically significant (p = 0.053).
What the authors decided to focus on instead is the fact that insulin sensitivity declined slightly but significantly on the saturated fat diet compared with the pre-diet baseline. That's why this study is cited as evidence that saturated fat impairs insulin sensitivity. But anyone who has a basic science background will see where this reasoning is flawed (warning: nerd attack. skip the rest of the paragraph if you're not interested). You need a control group for comparison, to take into account normal fluctuations caused by such things as the season, eating mostly cafeteria food, and having a doctor hooking you up to machines. That control group was the group eating monounsaturated fat. The comparison between diet groups was the 'primary outcome', in statistics lingo. That's the comparison that matters, and it wasn't significant. To interpret the study otherwise is to ignore the basic conventions of statistics, which the authors were happy to do. There's a name for it: 'moving the goalpost'. The reviewers shouldn't have let this kind of shenanigans slide.
So we have five studies through 2008, none of which support the idea that saturated fat reduces insulin sensitivity in non-diabetics. Since the review paper was published, I know of one subsequent study that asked the same question (3). Susan J. van Dijk and colleagues fed volunteers with abdominal overweight (beer gut) a diet rich in either saturated fat or monounsaturated fat. I e-mailed the senior author and she said the saturated fat diet was "mostly butter". The specific fats used in the diets weren't mentioned anywhere in the paper, which is a major omission**. In any case, after 8 weeks, insulin sensitivity was virtually identical between the two groups. This study appeared well controlled and used the gold standard method for assessing insulin sensitivity, called the euglycemic-hyperinsulinemic clamp technique***.
The evidence from controlled trials is rather consistent that saturated fat has no appreciable effect on insulin sensitivity.
Why Are We so Focused on Saturated Fat?
Answer: because it's the nutrient everyone loves to hate. As an exercise in completeness, I'm going to mention three dietary factors that actually reduce insulin sensitivity, and get a lot less air time than saturated fat.
#1: Caffeine. That's right, controlled trials show that your favorite murky beverage reduces insulin sensitivity (4, 5). Is it actually relevant to real life? I doubt it. The doses used were large and the studies short-term.
#2: Magnesium deficiency. A low-magnesium diet reduced insulin sensitivity by 25% over the course of three weeks (6). I think this is probably relevant to long-term insulin sensitivity and overall health, although it would be good to have longer-term data. Magnesium deficiency is widespread in industrial nations, due to our over-reliance on refined foods such as sugar, white flour and oils.
#3: Sugar. Fructose reduces insulin sensitivity in humans, along with many other harmful effects (7).
As long as we continue to focus our energy on indicting saturated fat, it will continue distracting us from the real causes of disease.
* For the nerds: euglycemic-hyperinsulinemic clamp (the gold standard), insulin suppression test, or intravenous glucose tolerance test with Minimal Model. They didn't include studies that reported HOMA as their only measure, because it's not very accurate.
** There's this idea that pervades the diet-health literature that all saturated fats are roughly equivalent, all monounsaturated fats are equivalent, etc., therefore it doesn't matter what the source was. This is beyond absurd and reflects our cultural obsession with saturated fat. It really irks me that the reviewers didn't demand this information.
*** They did find that markers of inflammation in fat tissue were higher after the saturated fat diet.
Malocclusion: Disease of Civilization, Part IX
A Summary
For those who didn't want to wade through the entire nerd safari, I offer a simple summary.
Our ancestors had straight teeth, and their wisdom teeth came in without any problem. The same continues to be true of a few non-industrial cultures today, but it's becoming rare. Wild animals also rarely suffer from orthodontic problems.
Today, the majority of people in the US and other affluent nations have some type of malocclusion, whether it's crooked teeth, overbite, open bite or a number of other possibilities.
There are three main factors that I believe contribute to malocclusion in modern societies:
In one, he made more space in her jaws by extracting teeth. In the other, he put in an apparatus that broadened her dental arch, which roughly mimics the natural process of arch growth during childhood and adolescence. This had profound effects on the girls' subsequent occlusion and facial structure:
The girl on the left had teeth extracted, while the girl on the right had her arch broadened. Under ideal circumstances, this is what should happen naturally during development. Notice any differences?
Thanks to the Weston A Price foundation's recent newsletter for the study reference.
For those who didn't want to wade through the entire nerd safari, I offer a simple summary.
Our ancestors had straight teeth, and their wisdom teeth came in without any problem. The same continues to be true of a few non-industrial cultures today, but it's becoming rare. Wild animals also rarely suffer from orthodontic problems.
Today, the majority of people in the US and other affluent nations have some type of malocclusion, whether it's crooked teeth, overbite, open bite or a number of other possibilities.
There are three main factors that I believe contribute to malocclusion in modern societies:
- Maternal nutrition during the first trimester of pregnancy. Vitamin K2, found in organs, pastured dairy and eggs, is particularly important. We may also make small amounts from the K1 found in green vegetables.
- Sucking habits from birth to age four. Breast feeding protects against malocclusion. Bottle feeding, pacifiers and finger sucking probably increase the risk of malocclusion. Cup feeding and orthodontic pacifiers are probably acceptable alternatives.
- Food toughness. The jaws probably require stress from tough food to develop correctly. This can contribute to the widening of the dental arch until roughly age 17. Beef jerky, raw vegetables, raw fruit, tough cuts of meat and nuts are all good ways to exercise the jaws.
In one, he made more space in her jaws by extracting teeth. In the other, he put in an apparatus that broadened her dental arch, which roughly mimics the natural process of arch growth during childhood and adolescence. This had profound effects on the girls' subsequent occlusion and facial structure:
The girl on the left had teeth extracted, while the girl on the right had her arch broadened. Under ideal circumstances, this is what should happen naturally during development. Notice any differences?Thanks to the Weston A Price foundation's recent newsletter for the study reference.
Magnesium and Insulin Sensitivity
From a paper based on US NHANES nutrition and health survey data (1):
Magnesium status is associated with insulin sensitivity (2, 3), and a low magnesium intake predicts the development of type II diabetes in most studies (4, 5) but not all (6). Magnesium supplements largely prevent diabetes in a rat model* (7). Interestingly, excess blood glucose and insulin themselves seem to reduce magnesium status, possibly creating a vicious cycle.
In a 1993 trial, a low-magnesium diet reduced insulin sensitivity in healthy volunteers by 25% in just four weeks (8). It also increased urinary thromboxane concentration, a potential concern for cardiovascular health**.
At least three trials have shown that magnesium supplementation increases insulin sensitivity in insulin-resistant diabetics and non-diabetics (9, 10, 11). In some cases, the results were remarkable. In type II diabetics, 16 weeks of magnesium supplementation improved fasting glucose, calculated insulin sensitivity and HbA1c*** (12). HbA1c dropped by 22 percent.
In insulin resistant volunteers with low blood magnesium, magnesium supplementation for four months reduced estimated insulin resistance by 43 percent and decreased fasting insulin by 32 percent (13). This suggests to me that magnesium deficiency was probably one of the main reasons they were insulin resistant in the first place. But the study had another very interesting finding: magnesium improved the subjects' blood lipid profile remarkably. Total cholesterol decreased, LDL decreased, HDL increased and triglycerides decreased by a whopping 39 percent. The same thing had been reported in the medical literature decades earlier when doctors used magnesium injections to treat heart disease, and also in animals treated with magnesium. Magnesium supplementation also suppresses atherosclerosis (thickening and hardening of the arteries) in animal models, a fact that I may discuss in more detail at some point (14, 15).
In the previous study, participants were given 2.5 g magnesium chloride (MgCl2) per day. That's a bit more than the USDA recommended daily allowance (MgCl2 is mostly chloride by weight), in addition to what they were already getting from their diet. Most of a person's magnesium is in their bones, so correcting a deficiency by eating a nutritious diet may take a while.
Speaking of nutritious diets, how does one get magnesium? Good sources include halibut, leafy greens, chocolate and nuts. Bone broths are also an excellent source of highly absorbable magnesium. Whole grains and beans are also fairly good sources, while refined grains lack most of the magnesium in the whole grain. Organic foods, particularly artisanally produced foods from a farmer's market, are richer in magnesium because they grow on better soil and often use older varieties that are more nutritious.
The problem with seeds such as grains, beans and nuts is that they also contain phytic acid which prevents the absorption of magnesium and other minerals (16). Healthy non-industrial societies that relied on grains took great care in their preparation: they soaked them, often fermented them, and also frequently removed a portion of the bran before cooking (17). These steps all served to reduce the level of phytic acid and other anti-nutrients. I've posted a method for effectively reducing the amount of phytic acid in brown rice (18). Beans should ideally be soaked for 24 hours before cooking, preferably in warm water.
Industrial agriculture has systematically depleted our soil of many minerals, due to high-yield crop varieties and the fact that synthetic fertilizers only replace a few minerals. The mineral content of foods in the US, including magnesium, has dropped sharply in the last 50 years. The reason we need to use fertilizers in the first place is that we've broken the natural nutrient cycle in which minerals always return to the soil in the same place they were removed. In 21st century America, minerals are removed from the soil, pass through our toilets, and end up in the landfill or in waste water. This will continue until we find an acceptable way to return human feces and urine to agricultural soil, as many cultures do to this day****.
I believe that an adequate magnesium intake is critical for proper insulin sensitivity and overall health.
* Zucker rats that lack leptin signaling
** Thromboxane A2 is an omega-6 derived eicosanoid that potently constricts blood vessels and promotes blood clotting. It's interesting that magnesium has such a strong effect on it. It indicates that fatty acid balance is not the only major influence on eicosanoid production.
*** Glycated hemoglobin. A measure of the average blood glucose level over the past few weeks.
**** Anyone interested in further reading on this should look up The Humanure Handbook
During 1999–2000, the diet of a large proportion of the U.S. population did not contain adequate magnesium... Furthermore, racial or ethnic differences in magnesium persist and may contribute to some health disparities.... Because magnesium intake is low among many people in the United States and inadequate magnesium status is associated with increased risk of acute and chronic conditions, an urgent need exists to perform a current survey to assess the physiologic status of magnesium in the U.S. population.Magnesium is an essential mineral that's slowly disappearing from the modern diet, as industrial agriculture and industrial food processing increasingly dominate our food choices. One of the many things it's necessary for in mammals is proper insulin sensitivity and glucose control. A loss of glucose control due to insulin resistance can eventually lead to diabetes and all its complications.
Magnesium status is associated with insulin sensitivity (2, 3), and a low magnesium intake predicts the development of type II diabetes in most studies (4, 5) but not all (6). Magnesium supplements largely prevent diabetes in a rat model* (7). Interestingly, excess blood glucose and insulin themselves seem to reduce magnesium status, possibly creating a vicious cycle.
In a 1993 trial, a low-magnesium diet reduced insulin sensitivity in healthy volunteers by 25% in just four weeks (8). It also increased urinary thromboxane concentration, a potential concern for cardiovascular health**.
At least three trials have shown that magnesium supplementation increases insulin sensitivity in insulin-resistant diabetics and non-diabetics (9, 10, 11). In some cases, the results were remarkable. In type II diabetics, 16 weeks of magnesium supplementation improved fasting glucose, calculated insulin sensitivity and HbA1c*** (12). HbA1c dropped by 22 percent.
In insulin resistant volunteers with low blood magnesium, magnesium supplementation for four months reduced estimated insulin resistance by 43 percent and decreased fasting insulin by 32 percent (13). This suggests to me that magnesium deficiency was probably one of the main reasons they were insulin resistant in the first place. But the study had another very interesting finding: magnesium improved the subjects' blood lipid profile remarkably. Total cholesterol decreased, LDL decreased, HDL increased and triglycerides decreased by a whopping 39 percent. The same thing had been reported in the medical literature decades earlier when doctors used magnesium injections to treat heart disease, and also in animals treated with magnesium. Magnesium supplementation also suppresses atherosclerosis (thickening and hardening of the arteries) in animal models, a fact that I may discuss in more detail at some point (14, 15).
In the previous study, participants were given 2.5 g magnesium chloride (MgCl2) per day. That's a bit more than the USDA recommended daily allowance (MgCl2 is mostly chloride by weight), in addition to what they were already getting from their diet. Most of a person's magnesium is in their bones, so correcting a deficiency by eating a nutritious diet may take a while.
Speaking of nutritious diets, how does one get magnesium? Good sources include halibut, leafy greens, chocolate and nuts. Bone broths are also an excellent source of highly absorbable magnesium. Whole grains and beans are also fairly good sources, while refined grains lack most of the magnesium in the whole grain. Organic foods, particularly artisanally produced foods from a farmer's market, are richer in magnesium because they grow on better soil and often use older varieties that are more nutritious.
The problem with seeds such as grains, beans and nuts is that they also contain phytic acid which prevents the absorption of magnesium and other minerals (16). Healthy non-industrial societies that relied on grains took great care in their preparation: they soaked them, often fermented them, and also frequently removed a portion of the bran before cooking (17). These steps all served to reduce the level of phytic acid and other anti-nutrients. I've posted a method for effectively reducing the amount of phytic acid in brown rice (18). Beans should ideally be soaked for 24 hours before cooking, preferably in warm water.
Industrial agriculture has systematically depleted our soil of many minerals, due to high-yield crop varieties and the fact that synthetic fertilizers only replace a few minerals. The mineral content of foods in the US, including magnesium, has dropped sharply in the last 50 years. The reason we need to use fertilizers in the first place is that we've broken the natural nutrient cycle in which minerals always return to the soil in the same place they were removed. In 21st century America, minerals are removed from the soil, pass through our toilets, and end up in the landfill or in waste water. This will continue until we find an acceptable way to return human feces and urine to agricultural soil, as many cultures do to this day****.
I believe that an adequate magnesium intake is critical for proper insulin sensitivity and overall health.
* Zucker rats that lack leptin signaling
** Thromboxane A2 is an omega-6 derived eicosanoid that potently constricts blood vessels and promotes blood clotting. It's interesting that magnesium has such a strong effect on it. It indicates that fatty acid balance is not the only major influence on eicosanoid production.
*** Glycated hemoglobin. A measure of the average blood glucose level over the past few weeks.
**** Anyone interested in further reading on this should look up The Humanure Handbook
Thursday, November 4, 2010
Liability Issues For Builders
In an effort to reduce costs, add value, and become more efficient, the building industry is constantly looking for new products and ways to be innovative which may or may not stand the test of time. Some prime examples of this are synthetic stucco (EIFS), masonite siding, polybutylene plumbing, and Chinese drywall.
About 10 years ago the insurance industry was hit hard with a construction defect crisis due to the use of some of these products. At the time, most of the costs of covering these defects were covered by the General Liability policies of the builders, manufacturers, and distributors. This led to two major insurance changes for these industries: First, most insurers left the market deciding that they could not be profitable at any premium with these classes of business. Second, the remaining insurers decided that they did not want to fund the next wave of construction defect claims. This resulted in adopting exclusion endorsements that could be added to their policies that are designed to limit their risk.
The following are some common exclusions which can severely limit coverage for builders:
1) EIFS Exclusion: If you install or repair Synthetic Stucco, you very likely will need to purchase a special General Liability policy from the high-risk insurance markets.
2) Soil Movement Exclusion: Expansive soils can lead to and have been a major source for construction defect claims. You can usually pick up coverage for this through certain home owner's warranty products.
3) Absolute Pollution Exclusion: This is a powerful exclusion that can have consequences beyond what you normally think of as pollution. This is exemplified in the recently emerging Chinese drywall crisis where its alleged that drywall from certain plants in China release noxious fumes that cause corrosion of metal in a home, a foul smelling odor, and health problems. The insurance carriers plan on denying these claims by using the Absolute Pollution Exclusion. Pollution is broadly defined under this exclusion as any solid, liquid, or gaseous contaminant or irritant. Once again, if you are concerned about this exposure, you can buy a special Pollution Liability policy through the high risk marketplace.
4) Prior Completed Operations Exclusion: The standard General Liability policy form normally picks up coverage for building operations completed prior to the start of the policy term as long as the covered “property damage” or “bodily injury” occurs during the policy term. However, with the addition of the Prior Completed Operations Exclusion, coverage for prior completed operations is eliminated. This presents a problem because the General Liability forms from the prior years don’t pick up this coverage to the extent that the “property damage” or “bodily injury” occurs after the expiration of the prior policy terms. Some versions of this endorsement limit its scope to “property damage” only. You may want to attempt to negotiate the elimination of this endorsement if it appears on your policy.
5) Products / Completed Operations Exclusion: This exclusion has perhaps the most devastating impact of any of the construction defect exclusions. Quite simply, this exclusion eliminates coverage for all “bodily injury” and “property damage” that occurs after the home has been sold. This would require you as a builder to purchase separate warranties through another company or find an insurance carrier that will remove this exclusion.
6) Exclusion: Damage To Your Work Performed By Subcontractors On Your Behalf (CG2294): Around 2004, most carriers began adding this exclusion to builder’s General Liability policies to eliminate the favorable coverage exception that was granted to builders (that were general contractors) under the Property Damage To Your Work Exclusion listed above. The presence of CG2294 eliminates coverage for construction defect claims. If CG2294 appears on your policy, there are two viable solutions. First, ask if your carrier has a “buyback” of the lost coverage for an additional premium charge. Second, search for a carrier that has a less severe version of this exclusion that only eliminates coverage for “property damage” to the faulty work itself but not to resulting “property damage” to the non-faulty work. The best thing to do is to make sure you are collecting certificates of insurance from your sub-contractors naming you as an additional insured on their policy. Also, make sure you are working with subs who are stable enough to remain in business long after the job is completed. This exclusion has been added to separate liability between subs and GC's so the GC's insurance is designed to protect them for things which they are actually liable for.
It is imperative that builders employ aggressive risk management techniques to protect themselves and limit their losses. A couple things I recommend: First, contractually transfer these risks to your subcontractors by using hold-harmless agreements and enforcing insurance requirements. Second, make sure you thouroughly document construction files and be proactive in dispute resolution. Please contact me if you have any general questions about this or specific questions about your policy.
About 10 years ago the insurance industry was hit hard with a construction defect crisis due to the use of some of these products. At the time, most of the costs of covering these defects were covered by the General Liability policies of the builders, manufacturers, and distributors. This led to two major insurance changes for these industries: First, most insurers left the market deciding that they could not be profitable at any premium with these classes of business. Second, the remaining insurers decided that they did not want to fund the next wave of construction defect claims. This resulted in adopting exclusion endorsements that could be added to their policies that are designed to limit their risk.
The following are some common exclusions which can severely limit coverage for builders:
1) EIFS Exclusion: If you install or repair Synthetic Stucco, you very likely will need to purchase a special General Liability policy from the high-risk insurance markets.
2) Soil Movement Exclusion: Expansive soils can lead to and have been a major source for construction defect claims. You can usually pick up coverage for this through certain home owner's warranty products.
3) Absolute Pollution Exclusion: This is a powerful exclusion that can have consequences beyond what you normally think of as pollution. This is exemplified in the recently emerging Chinese drywall crisis where its alleged that drywall from certain plants in China release noxious fumes that cause corrosion of metal in a home, a foul smelling odor, and health problems. The insurance carriers plan on denying these claims by using the Absolute Pollution Exclusion. Pollution is broadly defined under this exclusion as any solid, liquid, or gaseous contaminant or irritant. Once again, if you are concerned about this exposure, you can buy a special Pollution Liability policy through the high risk marketplace.
4) Prior Completed Operations Exclusion: The standard General Liability policy form normally picks up coverage for building operations completed prior to the start of the policy term as long as the covered “property damage” or “bodily injury” occurs during the policy term. However, with the addition of the Prior Completed Operations Exclusion, coverage for prior completed operations is eliminated. This presents a problem because the General Liability forms from the prior years don’t pick up this coverage to the extent that the “property damage” or “bodily injury” occurs after the expiration of the prior policy terms. Some versions of this endorsement limit its scope to “property damage” only. You may want to attempt to negotiate the elimination of this endorsement if it appears on your policy.
5) Products / Completed Operations Exclusion: This exclusion has perhaps the most devastating impact of any of the construction defect exclusions. Quite simply, this exclusion eliminates coverage for all “bodily injury” and “property damage” that occurs after the home has been sold. This would require you as a builder to purchase separate warranties through another company or find an insurance carrier that will remove this exclusion.
6) Exclusion: Damage To Your Work Performed By Subcontractors On Your Behalf (CG2294): Around 2004, most carriers began adding this exclusion to builder’s General Liability policies to eliminate the favorable coverage exception that was granted to builders (that were general contractors) under the Property Damage To Your Work Exclusion listed above. The presence of CG2294 eliminates coverage for construction defect claims. If CG2294 appears on your policy, there are two viable solutions. First, ask if your carrier has a “buyback” of the lost coverage for an additional premium charge. Second, search for a carrier that has a less severe version of this exclusion that only eliminates coverage for “property damage” to the faulty work itself but not to resulting “property damage” to the non-faulty work. The best thing to do is to make sure you are collecting certificates of insurance from your sub-contractors naming you as an additional insured on their policy. Also, make sure you are working with subs who are stable enough to remain in business long after the job is completed. This exclusion has been added to separate liability between subs and GC's so the GC's insurance is designed to protect them for things which they are actually liable for.
It is imperative that builders employ aggressive risk management techniques to protect themselves and limit their losses. A couple things I recommend: First, contractually transfer these risks to your subcontractors by using hold-harmless agreements and enforcing insurance requirements. Second, make sure you thouroughly document construction files and be proactive in dispute resolution. Please contact me if you have any general questions about this or specific questions about your policy.
Thursday, October 28, 2010
Include/Exclude Option on Work Comp
As the Owner of a business, you have the option under the Workers Compensation Laws to either include or exclude your payroll from your policy. So, the first question you would ask is “Why would I want to pay for work comp insurance on myself when I would never file a claim?” Besides, you have health insurance, right?
The Owner of a small business often finds they become the installer, delivery driver, salesperson, receptionist, etc.
Consider this:
You have a large job to finish and your best worker is out sick for the day. You decide that you will have to throw on some boots and do it yourself. You get to the job site and climb the ladder to start the job. For some reason, the ladder becomes unstable and you fall 15 feet to the cement below breaking your arm and causing a serious head injury. 3 months earlier, you decided that it would be better to exclude yourself from work comp coverage because you hate the fact that you are required to purchase this to do business and you want to pay as little as possible for it. Suddenly, we have a very serious situation to address. Will your health insurance take care of your hospital bills, medication, rehab? Maybe. But it isn’t very likely as most health insurers specifically exclude work-related injuries. NEVER ASSUME THAT YOUR HEALTH INSURANCE WILL COVER THIS!!
I highly recommend that all Owners, Officers, Partners, or Members of a company include their payroll on Workers Compensation Insurance.
Here is the breakdown in Utah
LLC Members, Partners, and Sole Proprietors: Are automatically excluded from the workers compensation coverage, but by written request may elect to be included. Each member, partner, and or sole proprietor that elects coverage will be rated on a stated amount of $39,000 in payroll regardless of the amount of money paid to them by the company (Utah
Officers of a Corporation: Are automatically included in the workers compensation coverage, but by written request may elect to be excluded. Each officer that does not opt out of coverage is subject to a minimum payroll of $39,000 up to a maximum payroll $159,000 per officer (Utah
Officers of a Corporation: Are automatically included in the workers compensation coverage, but by written request may elect to be excluded. Each officer that does not opt out of coverage is subject to a minimum payroll of $39,000 up to a maximum payroll $159,000 per officer (
If you decide to Exclude yourself from Work Comp coverage then there are other options to make sure you are protected in the event of an accident which MIGHT include a rider on your health insurance policy, a long-term disability policy, a life insurance policy, etc.
The safe thing to do is to add that little extra payroll into your Workers Compensation coverage as you never know from day to day which hat you will be wearing to work. Contrary to somewhat popular belief, the work comp system is a great way to protect owners and employees from accidents in the workplace that affect them and their families. If you have any questions or would like to discuss this in more detail please contact me. BE SAFE OUT THERE!
Tuesday, October 26, 2010
OSHA Crane and Derricks Rule
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| THIS NEW RULE WILL HAVE WIDESPREAD IMPLICATIONS FOR GENERAL CONTRACTORS, SUB-CONTRACTORS, PROJECT OWNERS, CRANE OPERATORS, TRUCKING COMPANIES, AND OTHERS. |
Monday, October 25, 2010
Cyber Liability
I found this article at http://www.riskandinsurancechalkboard.com/ it provides great information and advice on Cyber Liability. If you store private information on your company computers you will want to consider purchasing this type of insurance. Any storage of personal information such as credit card numbers, social security numbers, etc. can expose you to this type of loss which is not covered under your General Liability. The article follows:
I am sure in the 1960's TV show Lost in Space, Will Robinson never envisioned that the Galaxy would suffer a greater threat from cyber hackers than asteroids. Most businesses today are not insured for the criminal risk of unauthorized access to their network systems. These uninvited guests no longer just cause a minor disruption or annoyance. According to the Ponemon Institute study of 2009, the average cost of a data breach globally is over $3 million. Some of the costs incurred are system damage, recovery costs and lost business due to business disruption, as well as negative publicity that results. The focus in this article is the necessary costs associated with notification and credit monitoring for those affected. There are insurance products in the marketplace designed to address cyber liability, but until recently there has been minimal interest.
What has been learned in recent years is that theft and fraudulent use of personal information is not always the major cost of a breach in security. If a corporate database is infiltrated by an outsider, there is the potential infection of personal data that is stored, financial and credit card information of customers and social security numbers of employees. When this occurs, there is a need for individual notification to anyone who may be exposed to the breach.There are over 40 states now that have legislated notification requirements for security breaches and more stringent federal guidelines are expected in the future.
I am sure in the 1960's TV show Lost in Space, Will Robinson never envisioned that the Galaxy would suffer a greater threat from cyber hackers than asteroids. Most businesses today are not insured for the criminal risk of unauthorized access to their network systems. These uninvited guests no longer just cause a minor disruption or annoyance. According to the Ponemon Institute study of 2009, the average cost of a data breach globally is over $3 million. Some of the costs incurred are system damage, recovery costs and lost business due to business disruption, as well as negative publicity that results. The focus in this article is the necessary costs associated with notification and credit monitoring for those affected. There are insurance products in the marketplace designed to address cyber liability, but until recently there has been minimal interest.
What has been learned in recent years is that theft and fraudulent use of personal information is not always the major cost of a breach in security. If a corporate database is infiltrated by an outsider, there is the potential infection of personal data that is stored, financial and credit card information of customers and social security numbers of employees. When this occurs, there is a need for individual notification to anyone who may be exposed to the breach.There are over 40 states now that have legislated notification requirements for security breaches and more stringent federal guidelines are expected in the future.
According to the Ponemon study, the actual cost for individual notification and credit monitoring is in excess of $200. On an individual basis, this may not appear to be that catastrophic. However, consider the need to notify 10,000 customers of possible compromised access to credit/debit cards coupled with post-breach credit monitoring. We are now talking about costs in excess of $2 million. This is just the “damage control” expense side of the breach and does not begin to address any third party litigation that may follow.
These remediation costs, along with any regulatory fines or penalties, have been an area where most insurers offer minimal limits of coverage. Today, more insurers realize that these costs are the major focus and need for this insurance. Darwin Insurance and Allied World Insurance now extend this coverage up to full policy limits, which also includes regulatory fines or penalties. It is clear this coverage continues to evolve in line with legislative changes and a better understanding of the exposure to loss.
It would be wise for any business responsible for personal information -- credit information, social security numbers or medical data -- to evaluate the need for this insurance. In the words of the Robot, “Danger, danger Will Robinson!”. It is best to be aware of the dangers associated with cyber business risks even if you don’t buy the insurance.
Wednesday, October 13, 2010
Insuring Your Auto Fleet
The majority of business insurance claims come from their Auto Insurance. The more vehicles a business has on the road, the more likely they are to have claims. However, there are several things you can do as a business owner to reduce claims, get the best rates, and make sure you are properly insured.
First, what can you do to reduce claims?
- Hire quality employees and check their driving records before allowing them to drive company vehicles. A general rule in insurance is that frequency leads to severity. If a driver has a number of violations or accidents on their record, they are far more likely to be involved in a serious accident. If someone is driving a vehicle with a company name on it and they injure another person, that person will likely come after the company rather than the individual because they perceive that is where they will get the most money. So, hire people that represent your company well.
- Maintain your vehicles. Companies with large auto fleets will find that it is a pretty big expense to constantly change out tires, replace brakes, fix windshields, and service the engine of all those vehicles. Therefore, they can get lazy in doing it or will put it off because of the expense involved. This simple step can prevent major accidents from occurring.
- Implement company policy for drivers. There should be a zero-tolerance rule for driving under the influence of any drug, rules for cell phone use, speed limitations, seatbelt use, using a guide while backing, limiting distractions, and whatever else you feel is appropriate.
How do I get the best rates?
- Reduce claims by implementing the above controls and showing the insurance company that you monitor and enforce them.
- Show pictures of an organized, clean, well-maintained fleet of vehicles. This shows the insurance company that you take pride in your assets and that you take the responsibility seriously to do everything you can to reduce risks. If a loss control visit it performed and the insurance company finds a fleet of vehicles with cracked windshields, worn tires, safety violation issues, etc. they are unlikely to offer much credit on their insurance quote.
- Stay with one insurance company for several years as long as they remain competitive with other markets.
How do I know if I am properly insured?
- Place your insurance through a quality agent who knows your operations and is able to advise you on all aspects of Auto coverage.
- Use the same insurance company for your Auto and General Liability insurance. There are several gray areas as to which policy should respond in certain situations. Using the same company will eliminate any questions as to who should pay the claims.
- Make sure you are insuring your business property and property of others that you carry in your vehicles or on your trailers.
- Purchase an Umbrella policy that you feel comfortable with so you know that you will have adequate limits in the event of a large claim.
These are only a few things to think about when trying to properly insure your company vehicles. Please contact me if you have any concerns or questions about your Business Auto Policy.
Tuesday, January 5, 2010
Medical Emergency Travel Insurance
Don't play with reality visiting Canada. You have to defend your financial future in case of medical emergency. Visitors to Canada insurance can help if you buy it before arrival. You will regret
Even unexpected happiness can cause medical problems in the future. So, you should be ready for any events in your live with proper insurance plan coverage.
Even unexpected happiness can cause medical problems in the future. So, you should be ready for any events in your live with proper insurance plan coverage.
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