The Case of the Surprised Owner
After being introduced to owner of a printing and mailing company, Joe Rueter met with him meeting regarding the company’s operations, followed by a tour of its two facilities.
The owner thought the company was protected with its current insurance program and broker’s services. However, he allowed Rueter to review the insurance coverages and then provide a risk management assessment. The owner supplied Rueter with copies of the current insurance policies.
Based on his review of the insurance program, Rueter identified critical coverage and insurance program issues:
- The storage building at location #2 was incorrectly stated on the insurance application and policy as joisted masonry construction, when it was actually masonry-noncombustible. Rueter supplied the Insurance Services Office with an inspection report showing the error, and the company received a $7,500 refund on its property policies for the three prior years.
- The main printing location did not receive credit for the sprinkler system because the paperwork filled with the property rating bureau was incorrect. Rueter supplied the necessary information, which lowered the rates and premium for the main location, resulting in a savings of about $5,000. However, Rueter’s efforts to back date any credits failed. This insurance broker’s error was estimated to have cost the insured more than $20,000 over the preceding four years.
- During his inspection, Rueter found that the Heidelberg printing press was bolted to the floor, thus making it part of the building. However, the agent had the values for the Heidelberg listed as personal property, not those for the building as defined in the policy. According to Rueter’s analysis, the property was grossly underinsured, and the insured was paying a much higher rate on the Heidelberg press than necessary. Rueter corrected the mistake and saved the company an additional $2,000.
- To alleviate any concerns about the definition of building and personal property and the movement of stock and equipment between the two buildings, Rueter recommended blanketing buildings and contents. This gave Rueter’s “newly educated” insured peace of mind knowing the property was properly should a disaster occur.
- One client generates 40% of the company’s annual sales from a single location in Atlanta, GA. Based on this information, Rueter recommended adding business interruption coverage to the policy for a dependent property. Because the client operates from in a highly protected building with substantial fire suppression devices in place, it was reasonable to add a $1,000,000 limit.
- The client stored personal property of others that was currently insured on an actual cash value basis. Based on that information, Rueter recommended a replacement cost valuation, as stated in the written agreement with the company’s clients.
- The insureds lease did not have a mutual waiver of subrogation, so Rueter recommended either increasing the Building Legal Liability or revising the lease.
- Rueter requested the client’s drivers’ list, prior to marketing the account, Rueter ran a motor vehicle report, indicating that one driver had a driving with a suspended license. The insured reassigned the employee to non-driving duties and saved the company from fines and increased liability should an accident occur.
- For 90-days prior to hiring, the insured uses a temp employment agency for new employees. The temp agency provides workers compensation insurance but does not provide an alternate employer endorsement naming Rueter’s client as additional insured. Rueter covered this gap.
- During a follow up meeting with managers of the printing and mailing company, the group discussed the need for an employee safety and fleet safety program, and with the assistance of both their new insurance carrier and Rueter Insurance, they improved their loss prevention program.
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