Have you made your New Year’s resolutions?
According to a YouGov poll, the top personal New Year’s resolutions for 2019 were to exercise more, adopt healthy eating habits, and save more money. Business leaders commonly resolve to improve efficiency, update technology or facilities and reduce their carbon footprint.
Whatever your resolutions for 2020, the odds that you will keep them improve significantly when you have the appropriate insurance policies and other safeguards in place to keep you on track when things go wrong. Reassessing your coverage needs now can support all of your goals and resolutions for the coming year and help make it safer, more secure and more successful for you, your family and your business.
1. Assess whether your Homeowners Insurance policy is appropriate for your home’s value and location
Although more than 90 percent of homeowners have insurance, many do not take the opportunity every year to review their coverage to identify coverage gaps, and approximately 60 percent of U.S. homes are undervalued by an average 17 percent for insurance purposes, leaving many homeowners considerably underinsured.
Any changes you make to your home can impact its assessed value and your Homeowners Insurance needs, especially major changes such as adding rooms or outbuildings, converting a detached garage to an attached garage, adding a skylight or installing new windows or doors.
Did you recently invest in a swimming pool, trampoline or build a tree house? If so, ask your insurance broker or agent whether you need Personal Umbrella Coverage to adequately protect yourself should accidents occur while guests are using your new recreational amenities.
Experts predict severe weather events, flooding, earthquakes and wildfires will continue to become more frequent and severe. Now is the time to check in with your insurance broker or agent to assess whether your Homeowners or High-Value Homeowners Insurance policy includes adequate coverage for property damage caused by fire, wind, hail and water, as well as coverage for back-up sewer and drain damage and mold.
If your geographical location means that your risks for such damage exceed the coverage provided by your current policies, your insurance broker or agent can recommend specialty coverages that can give you greater protection and help you mitigate associated property damage costs, such as Primary and Excess Flood, Earthquake, Wind and Excess Wind coverage. If you live in a wildfire-prone area, you can invest in Homeowners Insurance that includes expanded wildfire coverage.
2. Check your insurance coverage for high-value personal items
Many homeowners mistakenly believe that their Homeowners Insurance policy provides full coverage for all items inside their homes or on their property. The reality is that contents coverage is a percentage of a Homeowners Insurance policy and there are coverage limits for high-value personal items such as artwork, jewelry, antiques, collectibles, and musical instruments.
To safeguard these precious and often one-of-a-kind personal items, you likely need the coverage afforded by a Personal Articles Floater. This specialized coverage can help you replace your high-value items if they are lost or stolen, repair them if they are damaged by severe weather event, smoke or accident. A Personal Articles Floater may be purchased for single items of great value, or it can be tailored to provide the level of coverage needed for several items or a collection.
3. Take simple but effective steps to protect your home and family from fires
According to a National Fire Protection Association (NFPA) study, 69 percent of reported residential fires from 2013 to 2017 occurred in single- or two-family homes. During that same period there were an average 354,400 home structure fires annually, resulting 2,620 civilian deaths and $6.9 billion in direct property damage each year.
Investing in the appropriate Homeowners Insurance and specialized coverages can help you when things go wrong, making fire safety a priority can avert disaster or help keep you and your loved ones safe when it strikes. Install new batteries in your smoke detectors and test your fire extinguishers regularly, replacing them promptly when needed. Review basic safety, emergency plans and stage evacuation drills with your family to make everyone more aware and better equipped to respond in case of fires or other events.
If you are a homeowner in a wildfire-prone area, the NFPA, FEMA and other leading experts recommend these basic fire-prevention steps:
- Keep your roof clear of debris;
- use fire-resistant roofing materials;
- keep the 5-foot radius around your home free from debris and flammable materials like wood mulch; and
- trim overhanging branches from trees within a 15- to 20-foot radius of your home.
To further mitigate your risks, ask your insurance broker if your Homeowners Insurance policy includes expanded wildfire coverage. Homeowners in 10 wildfire-prone states can obtain such coverage through policies backed by Burns & Wilcox, which has partnered with Wildfire Defense Systems (WDS), a private insurance fire resource company that provides homeowners insured through its partner companies with wildfire risk management services.
4. Shore up your defenses against cybersecurity threats
According to Norton Security, 2019 was a record year for cyber security breaches. The cybersecurity company’s year-end study reported 3,800 publicly disclosed breaches in the first half of the year, which exposed 4.1 million records. This represents a 54 percent increase from 2018.
In addition to creating an incident response plan for your company, training employees in identifying and responding to threats, identifying key cybersecurity stakeholders and assessing your third party-related data risks, you can protect your company and its assets with a Cyber and Privacy Liability Insurance policy tailored to your specific needs. These policies can provide coverage for a range of exposures, including third-party claims, first-party costs, public relations efforts, credit protection, regulatory penalties and notification and forensic costs.
5. Complete a safety check and assess your risks for on-site hazards
The start of a new year is a perfect time to perform a thorough review of your company’s premises and practices and address any potential risks to your staff or clients. Find and repair damaged walkways, repair or replace inefficient or malfunctioning equipment, check safety systems such as fire alarms and sprinklers, and have all staff review emergency plans and implement safe practices.
Your risk assessment should also include consulting your insurance broker or agent to evaluate whether your Commercial Property and Commercial General Liability (CGL) Insurance policies are appropriate for your specific needs.
A CGL Insurance policy can mitigate financial exposures from bodily injury, property damage, personal injury, advertising liability and product liability, but because coverages and needs vary widely from business to business, it is in your best interests to have an expert assess your needs. You may find that to appropriately address your risks you need additional property and liability coverages, such as Excess Property or Equipment Breakdown.
6. Every business has environmental exposures—find and address yours
Most business owners underestimate their company’s environmental liability exposures. They do so at their peril, as every business faces potential liabilities and costs related to health effects and clean-up from environmental pollution, whether due to accidents, fires, extreme weather events, or natural disasters, and the costs can be catastrophic.
According to the National Association of Insurance Commissioners (NAIC) environmental claims have risen 20 percent to 30 percent annually, a rise driven primarily by natural disasters; additionally, the U.S. Environmental Protection Agency collected nearly $70 million in penalties for environmental damages in 2018 alone.
Environmental Insurance policies can include coverage for fines and penalties, where allowable by law. Such policies can be exceptionally broad, including coverage for first and third party cleanup at owned, non-owned, rented or permanently leased locations; On-site or Off-site Cleanup; Emergency Response Costs; Business Interruption and many of the other substantial costs you may incur to remediate environmental damage.
A happy new year starts with safety and security
Remember that your insurance broker or agent can provide you with expert assistance to complete all of the action steps outlined above, assess your ongoing risks and more. Clarifying what your existing insurance policies cover and bridging any gaps with additional coverage to provide you with appropriate protections for all of your personal and professional exposures will help you gain the financial security and stability you need to keep all of your New Year’s resolutions, from purchasing that gym membership to upgrading your billing system.