Author Archive:THeaton


gone to the dogs …

I just came across some hard numbers, which are a little surprising to me … Dog bites account for 1/3 of all homeowner insurance claims. (WOW!!) The report states there has been a 2% increase in # of claims, but an 11% increase is dollar amount attached to dog bite claims with the average cost of a claim hitting $37,051. Sheesh … medical costs have skyrocketed as of late, so it makes sense the costs of these claims would rise considerably as well. Last point of note … since 1990, the average cost per claim has risen more than 90% – includes costs, settlements, judgements and jury awards.  We could spend hours discussing the various aspects of craziness that have made that last statement true – litigious society, medical cost upheaval, lack of responsibility … however, I am not sure that would really get us anywhere…

So, what can we do … (1) make sure you train your pets – I for one am HORRIBLE at training anything, but thankfully professional trainers are definitely available for hire, (2) keep pets that are jumpy or easily scared away from guests – I am sure we can all recall instances where we have unfairly responded when surprised or scared. It isn’t fair to put one’s pet in that situation either, (3) workplaces that allow dogs or animals on the premises can be even more liable for damages – Business owners, this is a good opportunity to double check your pets on premises policy.

As with most things, prevention and forethought can mitigate a lot of the risk.


For more info


The cost of a bad business culture …

Going through the news this morning, I came across another Wells Fargo scandal .. this time with forced placed auto insurance. It seems for whatever reason auto loan borrowers received unwanted auto insurance coverage, unbeknownst to them added to their account by the lender, Wells Fargo. The article continued with an accounting of how many people were affected and how many incurred severe adverse financial consequences (including repossessions) due to higher than agreed upon monthly payments.

This story is just a symptom of a bigger problem … a serious corporate culture problem. As I was thinking about this, I realized that this type of culture problem can occur in any size business, and not just a “corporate” environment. Cultures of greed, short-cuts, shoddy work/processes, & dishonesty can occur anywhere. In addition to being a huge liability risk, it is just poor business practice that can limit overall growth potential.

Years ago, being new to an area I needed an electrician. I called around and found a company that could come install a fan for me at a rental property. We agreed upon a price and got it scheduled. The technician came a little late, which was a bummer but forgivable. But low and behold when I received the invoice, it was well over the agreed upon price. When I called the owner to mention the error, he became a little belligerent and yelled the words I will never forget … “I can charge you whatever I want!” Hmmmm …. In my mind, this is the same issue – just on a much smaller scale.

Culture sets the tone for everything in a business and processes or procedures solidify the culture. For example, a company’s culture is the like the design & architecture plans of a building; the policies, processes & procedures are the actual walls, roof, & building itself … the tangible representation of the vision and just as important as the vision itself

So, how do we fix a systematic problem in any company?

  • Start with culture: The goal here is to determine what you want your company’s culture to be. The good news is there are books and articles EVERYWHERE that can help you start the discussion or start thinking about it.
  •  Move to processes & procedures … are these in line with the new culture & vision? Every interaction between employees, employees & customers, employees & management, management & customers should be analyzed to make sure they are aligned with the new culture & vision. If something in your current procedure is amiss, amend the process now.

The beauty is … everything is fixable.


Keys to success – Stern Style …

I am fascinated by business success. In my estimation success itself is as individual as the individuals which find it… and one can obtain success in a myriad of different ways. Business Acumen, Hard-work, Determination, Talent and Skill, and sometimes sheer Luck – are some of the most common characteristics or propellants of people and organizations to the lofty ranks of Successful.

Millions have studied, pondered and written about what it takes to become successful. I stumbled on an interesting article where a Professor from Vanderbilt University discussed Howard Stern’s success via branding. He highlighted some interesting aspects. Howard Stern is a bit on the excessive side for my tastes, but his achievements have been monumental as he has successfully transitioned from regional shock-jock to powerhouse, national player with an almost cultish following – this is not meant in any way to be derogatory; I have always quite literally been in awe of his brand/business/success.

I hope you enjoy ….

Can You Handle 6 Stern Branding Lessons? by Patrick Leddin, Ph.D. Professor, Vanderbilt University


Why should you worry about Cyber Attacks??

Cyber has been a hot button for some time in the insurance industry. I have talked about it several times via this blog as well. It is easy to become a little desensitized to the entire topic and adopt a laissez-faire attitude … but the reality is …

These attacks are not going away. In fact, they are increasing at an alarming rate.

I just saw an article that stated these types of attacks are up 700% in the UK. It would naturally follow that here in the US, they have increased at a similar staggering rate.
Lloyd’s of London recently published a report about titled, “Closing the Gap – Insuring your Business Against Evolving Cyber Threats” … the key findings are:


  • There has been a major growth in targeting companies through CEO fraud, which is resulting in significant financial losses.
  • The financial services sector finds itself at the sharp end of targeted attacks by organized cyber-crime but retail is increasingly being targeted.
  • Professional services firms such as lawyers and accountants are increasingly targeted as a gateway to attacks on their clients, which are often large corporates.
  • Ransomware and distributed denial-of-service attacks are increasingly used against businesses with healthcare, and media and entertainment particularly targeted.
  • The public sector and telecommunications sectors are highly susceptible to espionage-focused cyber-attacks.

Businesses need to be aware of the full costs of a cyber-attack, in particular, the “slow-burn” costs (i.e. those associated with the long-term impacts of a cyber-attack, such as the loss of
competitive advantage and customer churn). When added to immediate costs (i.e. legal and forensic investigation fees, and extortion pay outs), slow burn costs can dramatically
increase the final bill.


The reality is – Insurance is just one facet of good cyber protection … Software/Hardware, Training & Company Policies are all vital to effective cyber defense.


Digital Warfare

I read a blog entry this morning by M. Scott Ford – Founder & Chief Code Whisperer, Corgibytes, LLC  where he points out the error of Homeland Security Secretary Michael Chertoff likening of Digital Attacks to Biological Attacks and urges another mind set.

Like it or not, digital warfare is a part of our new norm. We need to see it for what it is – perpetrated by would be thieves around the globe – usually to pick our pockets. This intent or desire isn’t new just the form of the attempted theft.  As such, we shouldn’t cower from or have some primal-fear reaction to this age-old problem, we just need to adjust our mind set.

There are ways to protect and prepare for such violations to mitigate fear, loss and downtime.

How often to you back up your computers? Do you have employees that work from home? Who handles your tech security? What should you do in the event of a breach or ransomware? Have you discussed current threats or phishing scams with employees?

As noted on by author Jonathan Crowe  most Ransomware is distributed via Phishing and over 30% of those emails are opened. This is a topic that REALLY needs to be discussed on a companywide level for all size companies. Small business seems especially at risk without the larger resources of capital or manpower to focus efforts.

Barkley also has fabulous suggestions for protecting against Phishing:

  1. Add a layer of runtime malware defense on top of antivirus
  2. Have a solid backup strategy and test it properly
  3. Let users know what to do if they do have an infection
  4. Disable Microsoft Office macros
  5. Configure user settings to show file extensions by default
  6. ABP: Always be patching … meaning updating

Most of these are pretty easy to do with a good system in place. Most of it just takes a plan of defense … or an IT Guru/company if you prefer to find someone to do it for you.

Good Luck!


Business Emergency Prep!

We often think of emergency preparation in terms of our families and homes; but preparing your business for emergencies is just as vital.

The Insurance Institute for Business & Home Safety has published a fabulous guide to help get you started thinking and planning.  This is definitely worth moving up on your priority list.  Click here for the link to the kit.

Happy Planning!


So it looks like the ACA is going to go away as we know it …

… the real problem is what is going to replace it?  There seems to be major division in the GOP on how to do this. We heard all year that President-Elect Trup was going to repeal and replace the ACA … but we have yet to hear with what?!?!?!

Here is the latest from the NY Times.



Time to think about Marijuana …

Marijuana has been on my mind for the last couple of weeks…. And NO, not for the reason you are thinking. I have read multiple stories over the last several years from CO, OR and WA discussing aspects of the first several months after those states legalized recreational use. There was quite a spike at first (as one would expect) and businesses/municipalities were not entirely ready for the intended or unintended consequences. One story chronicled a business traveler’s escapades while at a trade show in CO. The story wasn’t salacious per se; However, it did highlight a current concern for businesses effected.

Now, it is our turn. The recent legalization of Marijuana in CA brings a heightened responsibility of employers in our state to make sure they have a concise drug and alcohol policy and fair procedure for dealing with potential infractions. The safety of your employees, your business and potentially the general public is at stake. While it may not be feasible to discipline an employee for any evidence of use – what they do on their own time is still up to them – you still have the right and responsibility to a drug & alcohol free workplace.

As with any policy it must be enforced uniformly and should not be used to unfairly target anyone or you run the risk of potential employee-employer litigation. Such litigation could be costly as most employers are reticent to purchase insurance coverage for these types of suits.

So, if you haven’t looked over your drug & alcohol policy is a while take a fresh look. Make sure you are taking good care of your business.

For additional insight … check out Business Insurance’s article

(For further information or company policy help, contact your HR resource or attorney. If you don’t have any such help, contact us and we can refer you to the 3rd Party HR service we offer to our clients.)

Avoiding Disaster – The Ghost Ship consequence

Let me start by saying my heart and prayers go out to the families and friends that lost loved one in this tragic event. I hope they can find peace and be comforted through this terrible time.

I don’t want to dwell on this or point the finger of blame. I admit that I don’t know enough of the facts to pass judgement, nor do I think the detectives have the full story yet either. Although, I do want to spread a word of caution to business owners and landlords – especially Commercial Landlords.

Early reports state the owner leased this property to an individual that seems to have sublet it out as residences, art studios and event hall. The legality of all of this will be a topic of much debate in the near future and I foresee the owner’s insurance Carrier already mounting forces to distance itself from the claim due to the illegal occupancies. Whether the landlord was aware of this or not should determine the extent of his/her culpability.

However, I want to focus on the moral and ethical responsibility of landlords to insure their properties are safe. These Many of these are no brainers and take more effort than money:

  • Landlords, you need to know who is occupying your property. I think gone are the days of plausible deniability. Even if you have a property that is vacant it could quickly be inhabited by squatters (and you can still be held liable under some circumstances for destruction to other’s property). If you prefer a more hands-off approach, enlist the services of a property manager and stipulate a specific number of property visits in the contract.
  • Fire Safety: newer buildings should all be equipped with fire safety devices … interior fire sprinklers would be the best – this is a huge asset. At a minimum, fire extinguishers, smoke & carbon monoxide should be employed and checked every 6 months to ensure viability. It is a good practice to require (via lease) that the tenant check these and keep them in good working order. Again, this is another important area to check every so often.
  • General accessibility – In this instance, it seems there was only one ingress/egress to the second floor (where events were held), early reports stated that the stairs in were made of pallets. One access made of highly flammable materials that were not permanently affixed is highly suspect as well. Depending on the size, buildings should always have multiple access points for quick and easy evacuation.
  • Maintenance Plans – as business owners we have a ton on our plate. Sometimes, building/location maintenance falls lower and lower down our list of priorities. Wiring, roofs, water heaters, plumbing, mechanical equipment … this list goes on … just does not last forever. Without routine inspections, a maintenance plan and replacement plan you will constantly be behind the game. Setting these up takes time, but implementation requires only follow through. Larger companies with maintenance departments have a leg up as they employ individuals to manage this for them; but owners still need to be involved and aware – ultimately, the buck stops there.
  • Tenant Insurance – I have spoken with many small business/commercial landlords over the years and I am constantly amazed that many still do not require their tenants to carry sound insurance coverage naming them as Additional Insured. This to me is really a deal killer. It doesn’t require much on your part – other than a bit of follow up – and can make a night and day difference in your risk.

I guess my main point is really to stress being actively engaged and aware. Insurance policies are bound and put in place to insulate against risk, but that doesn’t let us off the hook of responsibility if we are found wanting. Carriers have insulated themselves through the policies as well and are very specific about what they will and will not cover – often denying coverage in the event of illegal property use, lack of safety standards/willful ignorance of building code standards.

Be safe. Be smart.


(Photo credit – CNN – Allen Weddington)


CA Workers Comp – what now??? (AB 2883)

This little beauty seems to have passed almost unnoticed by the WC industry.  To be truthful, it seems that most businesses may not be readily affected by it.  But to those that are – the changes can be significant.  The question is: What does California AB 2883 mean to your worker’s compensation insurance?

CA AB 2883 was signed into law this past August by Gov. Brown and is slated to take effect January 1, 2017 – FOR ALL WORKERS COMPENSATION POLICIES! It might not mean much, but to some of you it may mean a significant increase in your current policy’s WC premium or a significant decrease if you are now able to exclude coverage previously denied exclusion.

CA AB 2883 modifies exclusion requirements. In a nutshell, the changes are:

  • Corporations … exclusions are available for any officer/director that owns 15% or more of outstanding shares … sorry owners of only 14% of stock or less, you are now REQUIRED to be covered by Workers Comp.
  • Corporations … directors/officers are no longer required to own 100% of the stock to qualify for director/officer exclusions … meaning if a portion of your stock is owned by a non-director or non-officer, you are no longer disqualified from exclusion
  • LLCs … Managing members can exclude themselves from coverage
  • Partnerships … General Partners can exclude themselves from coverage

So, what does this really mean? Basically, current policies can exclude any officer/shareholder of a corporation as long as the officers/directors owned all of the stock… even if the individual owner only owned 1% of outstanding stock. This has sometimes been used as a way of giving an ownership benefit to vital employees and as well as a cost savings benefit to the company by releasing them from the obligation of paying worker’s compensation premium for specific employees.


  • All qualifying individuals wishing to exclude themselves from coverage will need to complete an exclusion form
  • In researching with individual carriers – each seems to be implementing with their own forms and process to be completed by the end of the year. Call me for specific information