September 15, 2017

Most business owners are at least passingly familiar with the concept of an insurance audit.  Many insurance policies are priced based on some factor that cannot be determined with certainty until after the policy term has expired.  Workers compensation insurance is based on payroll, many general liability policies are based on either payroll or gross sales.  For this reason, in order to determine a price for these kinds of policies, the insurance buyer must make an estimate for that unknown amount of sales or payroll.  The rating basis, either payroll or sales, is then audited at the end of the policy term and if the estimated payroll was higher than the actual payroll, the business owner will be due a refund, if the estimated amount was too low, then the business owner will owe an additional amount to the insurance company.  This is all pretty straight forward and most experienced business people are familiar with this process.

Enter the one way audit. Depending on your perspective, this is either a way to protect the insurance companies from unpaid audits, or it is a nasty scheme to take advantage of business owners by using their familiarity with the audit process against them.  Maybe you will come down somewhere in between these extremes when you judge the one way audit technique; I for one think it is much the latter.

So what is this one way audit technique? Simply put, policies with one way audit features have special wording in them that states that if the audit results in an additional amount due to the insurance company, then the customer must pay this amount.  However, should the audit reveal that there is a refund due the business, then the estimated amount paid in advance will be deemed to be a minimum earned premium, thus no refund will be due to the insured.  What?  How is this a fair way to treat your clients?  Asking them to estimate their gross sales, then keeping the money if they over estimate and charging them for the shortage if they underestimate is one sided and disingenuous in my opinion.  But I can accept this procedure if it is spelled out in large, colorful print on the top page of the policy and perhaps attaching a brochure that explains how this is different from every other insurance audit that the client will have ever seen.

Liquor liability insurance policies are particularly vulnerable to the one way audit clause. Many of them sneak this wording into their policy and usually bury it deep in the policy language.  I have never seen a one way audit based policy that attempted to bring this nasty clause to the buyer’s attention on the front page of the policy.  With more states like South Carolina and Rhode Island now making the purchase of liquor liability insurance policies mandatory, more and more business owners will be trapped by this sneaky clause and will lose money that they expected to have refunded to them at the end of the policy term.

So how do you protect yourself from the one way audit? First of all, you must know how to recognize it when you have this clause in your policy.  Your insurance agent should be able to help you with that.  Secondly, when setting up a policy with a one way audit feature, you should under estimate the gross sales for the policy period.  I would advise using 75% or so of what you think your sales will be when you make your initial estimate to the insurance company.  Remember, any amount that you over estimate will not be returned to you at the end of the policy term.  Now this under estimate will now mean that you will probably face an additional premium due at the end of your policy term.  If this will create a cash flow problem for you then, then I suggest that you plan for that in advance and put that money in a safe place to pay the audit at the end of the policy term.

For help and advice with your liquor liability insurance needs, and with your other insurance policy needs, please feel free to call us, toll free, at 877-687-7557, or visit us on the web at www.clinardinsurance.com.  For more information about South Carolina liquor liability insurance, please visit us at www.SCLiquorInsurance.com.

Clinard Insurance Group Named Rough Notes E-agency Of The Month February 2011 March 8, 2011

In this blog, I usually try to focus on insurance policy and coverage help that will allow insurance consumers out there to become more informed buyers of the insurance product they need.  In this article, I want to deviate from that tack just a bit and take a moment to sing the praises of Clinard Insurance Group in particular.

The occasion for this change in approach on this blog is that Clinard Insurance Group,  an independent insurance agency in Winston Salem, NC has been named the e-Agency of the month by Rough Notes magazine.   Rough Notes is a national insurance industry magazine with over 40,000 subscribers.  So this is a big honor and we want to let all of our readers know about it.

The Rough Notes article focuses on our digital marketing efforts in particular but does give a lot of other information about our agency and our more traditional marketing methods as well.  This is an important marker for those of you out there considering an agent for your business insurance.  The reason this is so, is that we take our digital and traditional marketing expertise and we use it help our business insurance clients grow their businesses as well.  We understand that if your business grows, then so does ours.    One of the ways you can see us working hard for our clients is through our partners page that is a place where our business clients can offer coupons to the online world to help increase their client base.

If you would like to read the rough notes article and see photos of some of the people behind the scenes at Clinard Insurance Group, just click here.  I hope you enjoy this inside look at our agency.

At Clinard Insurance Group we want all insurance consumers to be informed buyers.  We work hard to try and disseminate information to the public about insurance issues that affect their lives and their businesses.  If we can help you with your home insurance, your auto insurance, your life insurance or business insurance, please call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.  Also, keep in mind that we also specialize in used car dealer insurance, auto repair and body shop insurance, restaurant insurance, and insurance for small contractors and landscaping companies. 

The source information for this article was originally posted to a blog at www.InsuranceAnswerGuy.com and you can find the full version at that site.

Clinard Insurance Gives Away $690 to Local Charities January 27, 2011

Thanks to the help of the Clinard Insurance Group family of customers, we were able to donate $690 to local nonprofit groups in January of 2011.  This is possible through our referral rewards program which designates a $5 charitable donation for each and every referral that we receive throughout the year each year.

Here’s a quick overview of how our Referral Rewards program works.  Any time that we receive a quote request that was referred to our agency we do 4 things.  First of all, we send a $5 treat gift card to the referring client, just as a way of saying thanks.  These cards are from Wendy’s, Starbucks, Krispy Kreme and various other places.  Next we put the referring client’s name in our monthly drawing for a $50 gift card to the restaurant of their choice.  We also put their name in the hat for a chance to win $1000.  The winner of that drawing is announced in early December each year.  Last of all, we donate $5 to a local charity.  Our customers can vote on their favorite charity by calling us, or by completing the form online here.

So this year we had $690 to give away and we delivered that to the following three local nonprofits:

Sunnyside Ministries – This organization is engaged in providing emergency help to families in South Central Forsyth County and Northern Davidson County who are in need of help due to financial crises. 

Second Harvest Food Bank of Northwest NC – This organization collects perfectly edible food that might otherwise end up in a garbage dump and they then distribute this food to those in need across an 18 county area.

Crisis Control Ministry – This organization is engaged in helping people in crisis to meet essential life needs and to become self sufficient.

Each of these groups received a check for $230 thanks to the generous referrals of our clients in 2010.  To watch a video of Gina Carlson delivering these checks, please click here.

For 2011, we are going to do it all over again.  Your referrals not only help Clinard Insurance Group, but they work directly to help promote and support some of the many fine nonprofit organizations that are right here in NC.  We thank all of you who referred your friends and family to us last year and we hope that many more of you will refer your friends and family to us in 2011.  Thanks for your support.

The source information for this blog was taken from other articles which can be found in their entirety at www.InsuranceAnswerGuy.com.

Data Compromise Coverage – Does Your Business Have This Protection? December 9, 2010

All businesses,  from restaurants to landscapers to car dealers, collect some data about other people.  This data collection is personally indentifying information from employees, customers or even suppliers and vendors.  Right now, there are laws in place in 47 states that govern when and how a business must respond  to a potential data compromise.   There are also federal laws such as the recently enacted FACTA and Red Flag laws.  In addition, it is estimated that the average cost of repairing a data compromise is currently $203 per compromised client.   With the number of clients, employees and vendors that a business has, it becomes imperative that each business owner understand and give some consideration to data compromise insurance.

Despite your best efforts to protect the data that you collect, data compromises can happen in 4 different ways.  There are electronic compromises where your electronic files are hacked, phished or pharmed.  Your data is also vulnerable to physical compromise which includes theft of physical files or a device which contains personally indentifying information such as a laptop or backup drive or a computerized cash register.  Also, your data is vulnerable to procedural compromise where someone in your organization makes a procedural mistake.  Examples of this could be mistakenly posting personally indentifying information on the internet or perhaps accidentally including the social security number on a mailing label.  Last of all your data is vulnerable to fraud related compromise where a sham third party company may purchase your data under fraudulent pretenses.
So what is this data compromise insurance?  Well, this protection is a relatively new form of coverage and is usually simply added to an existing businessowners insurance policy.  The coverage forms will vary greatly from company to company so you should read the form carefully to be sure that you know what you are purchasing.  One important point:  Most of these coverage forms will only pay for damages if the personally indentifying information is information that is not already public knowledge.  If the only information compromised is the name and address or phone numbers, then the protection will typically not apply.

Also, while coverage forms do vary, generally this protection will pay for one of more of the following three things:

Legal and Forensic Technology Review – Provides professional legal advice as to what is required to respond to a suspected data breach.  This can include the cost of the attorney as well as the cost of the computer experts to find out what was lost and how to protect data in the future.

Notification to affected individuals – Reimburses you for your expenses of notifying the people whose data has been compromised. 

Service to affected individuals – This coverage is to help the affected individuals repair their credit of take necessary steps to fix any problems that were created for them when your business experienced a data compromising event.

There are several things to consider when purchasing this protection.  Always check to see if this extra protection has its own limit of liability that is different from the businessowners general liability policy limit.  This is usually the case.  Next, check to see if this coverage form has a different deductible than your businessowners policy.  Last of all, check to see if this is a claims made type policy form or an occurrence based policy form.

At Clinard Insurance Group, in Winston Salem, NC, we work hard to help all insurance buyers become better informed consumers.  If we can help you with your business insurance, please call us, toll free, 877-687-7557 or visit us online at www.ClinardInsurance.com.  

The source information for this article was pulled from other articles which can be found at www.InsuranceAnswerGuy.com.

Social Media Becomes a Tool In The Fight To Reduce Insurance Fraud September 18, 2010

A young man brags on facebook about sinking his car in a lake before he reported it stolen.  A carpentry company creates a promotional video for youtube which shows their workers installing roofing material.  Another youtube video shows people ramming a van into a tree over and over again.  You can even view some stage accident videos by NICB here.   For some reason, people just don’t think that social media is a tool that insurance claims adjusters can use.

Studies indicate that at least 10% and perhaps more of all property and casualty insurance claims are fraudulent.  The National Insurance Crime Bureau estimates that workers compensation fraud alone costs as much as $5 billion per year.  This cost is added into so many of the products that you and I purchase every day.  But fraud has a new enemy now and it is called Social Media.   The social media sites like youtube, twitter, facebook and others are a great place for claims adjusters to spend time checking up on their claimants.  And underwriters use them as well.  In the case of the carpenter showing his employees working on a roof, he now has some explaining to do to his underwriter since he signed an application indicating that he does not engage in any roofing activities.

It is surprising how people are willing to incriminate themselves on these social media sites.  Underwriters are now better able to identify the types of customers who are prone to fraud by studying their social media and internet footprints before they agree to write a policy for them.  And of course today’s claims adjuster is finding the social media universe to be easy pickings for proving fraudulent behavior on some claims.

Over time, the fraudsters out there will be a bit smarter and in truth, social media is not the place to catch the real professional crook.  But it is having an impact on helping to keep your insurance rates just a bit lower over the near term.

At Clinard Insurance Group in Winston Salem, NC, we work hard to help insurance consumers out there become better informed buyers.  If we can help you with your home insurance, your auto insurance, your business insurance or even your life insurance, I hope you will call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com
The source information for this article was pulled from other articles which can be found in their entirety at www.InsuranceAnswerGuy.com.

Used Car Dealers – Has Your Peak Season Been Left Out Of Your Garage Insurance Policy? September 8, 2009

In many retail businesses there is a peak season where inventory runs higher than the rest of the year.  For most retail establishments, this ocurs the months leading up to the Christmas holiday shopping season.  And most insurance policies for retail businesses have a way to account for this fluctuation in inventory.  The dealer’s garage policy does not, but there is a way that used car dealers can protect themselves from this hidden monster without paying an arm and a leg to do it.

The first step is to analyze your dealership to understand if you have a peak season.  I have found that most used car dealerships do have a peak season and this season generally runs from February to May.  This is the time when income tax refunds are arriving in mailboxes and people go out and buy cars with the new found money.  Next, take a close look at how you plan for and deal with this higher sales season.  Do you purchase more cars and build up your inventory?  If so, when do you start?  When does your inventory get back to lower levels?

There are 3 ways to deal with this inventory fluctuation from an insurance standpoint.

The first way is to simply ignore it.  This may seem like the least expensive approach at first unless you have a large loss to your lot, such as fire or hailstorm and you discover that you are underinsured without enough insurance to cover all of your damaged inventory.

The second way to handle this inventory fluctuation is to increase the limit on your dealers open lot coverage to the amount that represents your highest inventory level at any time during the year.  This is certainly better than ignoring the issue altogether, but why pay for $100,000 of dealers open lot coverage if for most of the year you only need $50,000?

The third way is one that I see very few dealers take advantage of, yet it is the easiest and least expensive approach.  Just call your agent when your inventory increases in February or January and raise the limit on your dealer’s open lot coverage.  Then, when your inventory has dropped down in late May, give another call to your agent and have them drop your limits back down.  It’s easy, simple and it affords you the coverage you need without over paying for insurance the rest of the year.  Why more dealers don’t pay attention must only be because they don’t know that this is an option available to them.

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping used car dealers all across North Carolina, Virginia, South Carolina, Tennessee and Georgia with their garage insurance policies.  If we can be of help to you with advice or answers to your questions, or if you just want to find out how to get the best policy for the least amount of cash, please call us, toll free, at 877-687-7557 or visit us on the web at www.TheAutoDealersHelper.com.

The source information for this article was found at www.InsuranceAnswerGuy.com.

All North Carolina homeowners now face a personal burden for beach house hurricane losses. July 24, 2009

The North Carolina State Legislature is crafting legislation, House Bill 1305, that will push the burden of catastrophic hurricane losses of beach property on to the backs of all unsuspecting property owners statewide.  While there are some positive changes in this legislation, it feels like to me that they are sticking it to the people who are not there watching this legislation be made, and that is all the people who own property in North Carolina that is not coastal property.

The good news here is that the NC legislature has finally admitted that the North Carolina Beach Plan is broken and needs a fix.  The Beach Plan insures $75 billion worth of property in coastal areas and has a meager $1.5 billion in reinsurance and reserves to pay claims.  Clearly if a large storm hits our coast, there will not be enough money to pay the claims.  To find out how we got to this point and read more details of this problem, click here.

The major parties working on this legislation are the coastal property owners and their lawmakers and the insurance companies.  Right now, if a storm hits and the beach plan goes under, the bill must be paid by all the insurance companies doing business in North Carolina writing homeowners insurance and other property insurance including commercial property policies.  This assessment is presently unlimited and this unlimited exposure is scaring the insurance companies in North Carolina into taking dramatic action which impacts all of their policyholders.  One drastic example is the consent to rate letters that some major insurance companies are now sending to their homeowners policyholders.

House Bill 1305 which sailed through the house on July 15^th will take care of some of the uncertainty for the insurance companies.  Right now the insurance companies face the uncertainty of unlimited assessments to bail out the Beach Plan after a major storm.  If this bill becomes law, then their assessments will be limited to $1 billion per storm.  Still quite a lot of money but now it is a number that they can plan for.  So all in all, I think the insurance company lobby did a pretty good job of getting what they wanted.

But if you add another billion dollars to the amount available for a major storm, you will see that we still now have only $2.5 billion to protect over $75 billion in assets.  So where does the rest of the money come from?  Well the biggest chunk is a new storm assessment that can be added to every property insurance policy in North Carolina.  If this bill becomes law, and we have a major storm, then you can expect to see an extra charge added to your homeowners insurance of up to 10%.  And it is unclear in the wording of the bill as to whether or not that is a one time charge or can go on and on until the Beach Plan is made whole again.  The open ended nature of the wording leads me to believe that this charge could remain on your policy for years and years to come.

Those owning property at the coast, who are insured through the Beach Plan, will have to give up something as well.  In the event of a major storm, they will face a deductible of no less than 1% of the total value of the property.  There is a clause that allows for even higher deductible percentages if needed. 

I disagree with the legislators who say that our coastal property is a state treasure for all of us and all of us living in this state should be on the hook to support the coast.  I think that the fairest solution is to raise the rates on beach property to more accurately reflect the risks and let those who own property or rent property at the beach carry the burden.  In South Carolina the Beach Plan rates are about 10 times what ours are and their Beach Plan is adequately funded.  This is the fairest way to handle this problem.  In all cases of insurance, the system works best when those in control of the exposure are the ones who pay for the insurance.

At Clinard Insurance Group in Winston Salem, NC we work hard to make sure that all of our clients are informed insurance consumers.  If you have any questions about how this might affect your homeowners insurance policy, or if you need any other help with any of your insurance policies, please call our office, toll free, at 877-687-7557 or visit us online at www.ClinardInsurance.com.

The source information for this article was taken from www.insuranceanswerguy.com.

NC building and construction contractors – Here’s just what those uninsured subcontractors will do to you and how you can prepare yourself to minimize the damage. July 6, 2009

It is a fact of life in the construction business.  Almost all construction contractors, from the general contractor all the way to the landscape contractor will occasionally have to hire an uninsured subcontractor.  There are hidden costs to this arrangement but knowing them in advance can help you prepare for the costs and minimize the damages to your insurance program.

It’s helpful to understand, from the beginning, that insurance companies don’t like for their clients to hire uninsured subcontractors.  The reason is that they feel that your control over a subcontractor is much reduced and therefore losses are more likely.  If they are uninsured, then the exposure for those losses is pushed on to your insurance company.  And that makes you a less attractive risk for your insurance company.

So hiring uninsured subs causes two big problems that can generate increased insurance costs for you.  Both are things you can prepare for if you do your homework in advance.  And by taking the steps I will outline below, you can possibly reduce the cost to zero for each of these problems.  And remember, if you use a subcontractor that is insured, be sure to take the appropriate steps to obtain a valid certificate of insurance.  To read more about what you need to know about insurance certificates, please click here.

The first problem that uninsured subs will cause for you is increased insurance premiums on your general liability insurance policy and your workers compensation insurance policy.  This is a stealth increase because if you don’t take steps in advance to protect yourself, then by the time you find out how much your subcontractor costs you, the sub may be long gone and your chances or wringing it out of the him or her will be nil.  If you are unable to produce a valid certificate of insurance on a subcontractor, then when your policy is audited by the insurance company  at the end of the policy term, they will include as payroll, the full amount of cost that you paid to the uninsured subcontractor.

You can defend against this problem by withholding from the amount you pay the uninsured subcontractor an amount equal to or greater than the amount you will be charged by the insurance company at audit.  To understand how much to charge, you should contact your agent and find out the rate per $1000 of payroll for the subcontractor’s classification on both workers compensation and general liability insurance.  I would suggest that you add an amount over the rates you face to cover your administrative expenses of handling this transaction. 

The second problem caused by uninsured contractors has to do with the insurance company’s reaction to finding out you have used them.  As I mentioned earlier, insurance companies do not like for their clients to utilize uninsured contractors but their appetite for them will vary.  Check with your agent first and find out just what percent of payroll or gross sales paid out to uninsured subs will be tolerated by your insurance company.  Some may not tolerate any and still others may be willing to let you go as high as 50%.

It is important to know in advance how high you can go so that you don’t break your insurance company’s rules unknowingly.  If they find out on audit that you have been using more uninsured subs than their underwriting guides allow, they may cancel your policy or take away discounts that will result in much higher rates for you.  In this case it is better to ask permission first then to ask for forgiveness later.

Remember, when you deal with an uninsured subcontractor you are now allowing them to use your insurance for their risks.  Over the long term this is not advisable because they could cause a loss that is so catastrophic it might destroy your ability to get insurance at all, or it may create a high experience modification factor on your workers compensation policy that might cost you a lot of money for the next 3 years.  It is always best to deal with subcontractors that have their own insurance.

Clinard Insurance Group, in Winston Salem, NC specializes in helping small contractors of all types all across North Carolina.  If you would like a second opinion on your business insurance or if you need help with your general liability policy or your North Carolina workers compensation policy,  please feel free to call us, toll free at 877-687-7557 or visit us on the web at www.thecontractorshelper.com.

The source information for this article was taken from an article found at www.insuranceanswerguy.com.

Credit Protection – Not Always Such A Good Deal July 1, 2009

With all the job uncertainty out there, credit card companies are selling more of their “credit protection insurance” to cardholders.  The big sell these days is that your card payments will be made if you are out of work. Sounds great, until you read the fine print.

In most cases, the unemployment coverage doesn’t kick in if you voluntarily leave your job or are let go for performance reasons.  And just having your hours scaled back won’t trigger coverage either.

In addition, these policies are very costly, ranging from 35 to 99 cents for every $100 of balance on your card each month.  So, if you are carrying a $3000 balance on your card you would pay between $10.50 and $30 a month for this protection.  In most cases, you would be much better off applying this money to your outstanding balance.

There are those that might argue that at least this is good coverage if you die or become disabled.  Again, the fine print might make you change your mind.  In most cases the definition of disabled means that you are unable to do any work of any kind.  That’s a recipe for never having to pay a claim if you ask me.  The standard disability policy will provide coverage if you are unable to do the job that you were doing when you became disabled.  At any rate, the cost per $1000 of protection is between 5 and 10 times what you would pay an insurance company for life insurance or disability insurance.

It’s clear that these credit protection plans require the buyer to read the fine print very carefully.  They are probably only a good deal for those that are uninsurable due to medical conditions.  My advice is to purchase your disability insurance and your life insurance from a company that is in that business instead of from your credit card company.

At Clinard Insurance Group, in Winston Salem, NC, we want all consumers to be informed consumers.  If you have any questions about your own life insurance or disability insurance needs, or if you need help with your auto insurance, home insurance or business insurance, please call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

The source information for this article was taken from www.insuranceanswerguy.com

NC Used Car Dealers – Don’t Forget About Workers Compensation Insurance June 30, 2009

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping used car dealers with their dealers insurance policies.  And 95% of the time, when a dealer calls us for insurance, the only policy on his mind is the NC garage insurance policy.  But there is another, very important policy that all dealers must consider.  And leaving this one out can do a lot more than just ruin your day.  It could wipe out your business.

Why so few used car dealers remember to purchase workers compensation insurance is a mystery to me.  It probably stems from the nature of their employees since many hire their salespeople as independent contractors.  But while hiring them as independent contractors may change how taxes are paid, it will not allow the dealer/owner to avoid paying the losses under North Carolina Workers Compensation law.

In NC, purchasing workers compensation insurance is voluntary if you have 3 or fewer employees.  And you don’t have to count your independent contractors as employees either.  But here’s the rub.  Just because you don’t purchase the insurance, doesn’t mean you are safe from the losses.  In fact, not purchasing the insurance policy means you are putting your own assets on the line to pay all claims required by the NC workers compensation statutes.  So, if your employee is injured or killed on the job, then your business will have to pay the statutory benefits required by law.  Essentially, you have chosen to put yourself in the position of the insurance company for all losses.  And a big loss could put most small used car dealers out of business.

Insurance is a good deal for the consumer any time that the consumer can trade a small, affordable, known loss – in this case the workers compensation premium, for a larger, unknown and possibly catastrophic loss.  If you own a used car dealership and you have anyone besides yourself working for you in any capacity at all, you owe it to yourself to get a price on a workers compensation policy.  You may be surprised at how affordable it is.  In this case, going bare is a huge risk.  If you are going to go without insurance, please recognize that you have only chosen to shift the risk of loss to yourself in exchange for not paying an annual workers compensation premium that is probably very affordable for you.

At Clinard Insurance Group in Winston Salem, NC, we want all insurance consumers to be educated consumers.  If you would like help with your dealers insurance, or if you want a workers compensation quote, please call our office, toll free at 877-687-7557 or visit us online at www.clinardinsurance.com.

The source information for this article was taken from data found at www.insuranceanswerguy.com.