Fire Prevention: Keeping the Workplace Safe

One of the most devastating accidents that can occur in your business comes from a fire. Fire is the third leading cause of death in the workplace and is the number one cause of a business never rebuilding after it has been destroyed by a fire. Whether your business is small or large, a disruption to providing your products and services to your customers could mean a potential loss of jobs, property, and in many cases loss of income by losing your customers outright. Spending time on your Fire Prevention Plan can stop a disaster from occurring.

Prevention is everyone’s job and there are steps that can be taken that will assist towards reducing or eliminating hazards within your facility that can contribute to a fire:

1. Develop a basic evaluation plan for your facility and inspect regularly for fire hazards:
   1. Inspect equipment for leaks of any kind.
   2. Look at electrical connections to make sure they are secure and safe.
   3. Make sure fuel or ignition sources are contained properly.
   4. Make housekeeping a priority that there is not an abundance of debris in the facility.
   5. Review manufacturer instructions for equipment concerning fire hazards.
   6. Inspect and make sure fire extinguishers are fully charged monthly.
   7. Materials should not be stored near electrical panels.
   8. All flammable chemicals must be stored in appropriate storage containers.
2. Have a Warning and an Evacuation system in place:
   1. Make sure the facility has appropriate warning Fire Class hazard placards in place outside the building which identifies any hazardous substances the Fire Department should be aware of in the building.
   2. Have an emergency evacuation plan in place which all employees are aware of and trained on, including what their role may be in an emergency evacuation.
   3. Have an emergency alarm system in place to notify all in the facility of the emergency.
   4. Make sure all methods of facility egress are maintained and exits are accessible. Train at least annually on methods of evacuation and escape routes.
   5. Have both smoke detection and sprinkler systems tested annually, if not on a quarterly basis, that they are in working condition.

While this review is not exhaustive, there are some basics here that should be followed and implemented with the main priority of saving lives. For further assistance, you can call on Alliant Insurance Services to assist with implementing your company Fire Prevention Plan.

Written by: Bob Corwin, First Vice President, Alliant Insurance Services

For more information, call 800.390.9099, or go to revproinsurance.com.

Don’t Get Caught in a Liability Trap

Know your garage policy

Garage liability vs. garage keepers liability is an issue that causes a lot of questions from shop owners. The answers vary based on the insurance agent’s experience with providing these two coverages and properly writing the coverage with an insurer who is in the space.

Garage liability insurance is a general liability policy melded with an auto policy for companies who work on, in, and around motor vehicles. Like general liability, the intent is to pick up the stereotypical slip-and-fall hazards or other on premise-related exposures of a retail or wholesale operation. Coverage is also there for exposures like defamation of character, slander, or even wrongful detainment. The intent of the coverage is to stand behind the work of the shop owner should someone get hurt or something gets damaged as a result of the work.

In other words, should the engine overheat, the engine wouldn’t be covered, but should the paint get damaged as a result of the release of hot coolant, then the paint would be. Therefore, understanding what designations to use to properly afford the correct auto liability extension is critical when addressing liability actions derived by the usage of a vehicle within the garage operation.

Garage keepers liability only picks up the physical damage protection of the customer’s car while in the care, custody, and control of the shop owner. An example would be damage caused to a customer’s car due to failing to set an emergency brake, causing it to roll down a hill and become damaged. Or, most commonly, coverage for an employee hitting something while operating the vehicle.

Although many garage keepers’ claims fall below a deductible and even more are taken care of by the shop owner as a cost of doing business, understanding when and how coverage is triggered is key.

To recap:

• Garage liability protects a shop owner from actions of bodily injury caused by the operation of a vehicle and extends to their work should there be consequential injury or property damage due to alleged faulty workmanship.
• Garage keepers liability merely protects the physical damage of a third-party vehicle, while it’s in the shop owner’s custody.

About RevPro

RevPro is a national insurance program custom-built by Alliant to cover the wide-ranging risks of the automotive aftermarket industry. For more than 25 years, we have proudly serviced a broad array of industry sectors, including parts manufacturers, material suppliers, wholesale distributors, and many others. As the endorsed insurance broker of the Specialty Equipment Market Association (SEMA), you can count on Alliant’s industry experts to build a powerful and cost-effective insurance program for your business. Thanks to the important SEMA member benefits offered through the RevPro business insurance program, certain coverages like product liability, product recall, Garage Liability, Garage Keepers & Auto are among the myriad of coverages automatically included.

About Alliant

Alliant is the nation’s largest specialty insurance brokerage firm, providing risk management, insurance, and consulting services that safeguard the physical and financial health of thousands of clients throughout the U.S.

For more information, call 800.390.9099, or go to revproinsurance.com.

Underestimating Business Interruption

When business owners decide to secure insurance there are many motivating factors driving decisions. For some contractual demands outline liability requirements and for others, it’s the thought of the cost of litigation. When it comes to property, many are motivated by a lender or mortgagee to secure coverage for a building or leased equipment. But, securing property insurance for tangible items threatened by fire or theft is only a small part of protecting asset vulnerability. One must take into account the replacement of said goods and most importantly consider the cost associated with rebuilding a business back to where it was prior to the loss is a financial necessity.

Business Interruption insurance, commonly known as business income coverage, is a sub-component to a property policy and is triggered by the same covered perils on the policy. What many business owners don’t realize is there are a myriad of issues that need to be considered when establishing the limit or coverage need that will assist in stabilizing the business by mitigating further losses. One must take into account the potential for market share losses that can come from lost net profit over an extended period of time.

We have seen time and time again business owners carefully establishing a limit on the tangible property that supports the repair or replacement of damaged buildings or contents, but going without business income protection in its entirety and never thinking about the amount of money needed to pay for critical expenses or lost profit post-loss is the intangible that many businesses never recover from.

Let’s briefly review some of the critical areas that should be contemplated when establishing the limit or monies needed as follows:

• Extra Expense reimbursement for reasonable expenses beyond the fixed costs normally incurred by the business prior to the loss allows a business to continue operations during the recovery process. These expenses can be as small as hiring a contractor to board up a hole in the building to temporary equipment and can add up quickly. This in addition to considering expediting expenses like the cost of freight to obtain a critical part or tool.
• Temporary location or equipment may be needed to support the recovery process. Money to pay for nonrecurring expenses to stay in business is critical.
• Fixed costs, also known as ongoing operating expenses, and other historical expenses that still exist after a loss regardless if revenue isn’t normalized. It is true that expenses are reduced when a business isn’t running like lower energy demands, labor costs, etc., but continuing expenses like key management and personnel salaries, including overtime pay or lease payments that must be maintained need to be accounted for.
• Profits that would have been earned based on the prior month’s performance can make the difference between a business thriving during and after a claim versus merely surviving. What many don’t realize is market and reputational erosions can occur which factors into the length of time of said recovery slowing the net profit returning to the place it was prior to the loss. If a business isn’t open for 6 months customers will go elsewhere and this creates a potential added risk of them not returning once the establishment is reopened.

There is much to know about business income coverage which is often referred to as the lifeblood of an enterprise. Yet the coverage is commonly overlooked when property insurance is being secured. Here are 5 things every business owner should do immediately upon negotiating their next property renewal:

1. Work with an agent that understands risk assessment on the topic.
2. Complete a business income worksheet that supports outlining items to consider when establishing the limit.
3. Work the most catastrophic claim for your company in reverse and discern the true timeline of recovery.
4. Establish a disaster recovery plan which could require third party relationships to be formed.
5. Work with a carrier willing to separate the cost from the property pricing.

In the end buy more than you truly feel you need as it is never enough if recovery takes longer than expected due to environmental, regulatory, or civil restrictions.

Alliant Insurance Services Inc. is the endorsed broker to the Specialty Equipment Insurance Alliance and founding managers of both RevPro and Installers Edge programs which deliver property and casualty products and services to automotive parts manufacturers, distributors, retailers, and garage operators across the country on a retail and wholesale basis.

For more information, call 800.390.9099, or go to revproinsurance.com.

Garage Owners Liability

Operating a business that works on vehicles has unique liability risks that can be insured through a garage owner’s policy. A garage liability policy provides protection for liability exposures in garage operations for claims from bodily injury and property damage. There are two coverages that should be considered when purchasing a policy – Garage Liability and Garage Keepers Legal Liability.

Garage Liability

All business owners should have liability coverage. This is for slip-and-fall liability, covered under premises and operations, and products and completed operations coverage, for work performed. This covers your business for bodily injury and property damage claims caused to others as a result of your business activities. This is not a warranty of your work, but protection for damage to a customer as a result of your work. An example would be if a customer asked to have a carburetor rebuilt on their classic car and upon completion the customer calls and says the fuel line wasn’t tightened and the leak caused a fire. In this circumstance, the insurance carrier would protect you for the damage to the customer’s car caused by failing to tighten the fuel line.

Garage Keepers Legal Liability

One of the most important coverages is Garage Keepers Legal Liability- GKLL. When added to a garage owner’s policy it provides protection for damages caused to customers’ vehicles while in your care, custody, or control. The best GKLL form is to make sure that Direct Primary coverage is purchased, as this is preferred.

Direct Primary coverage will recognize the loss regardless of whether or not your garage was legally liable for the damages. This can make adjusting the claim and satisfying the customer a win-win should the need arise.

For more information, call 800.390.9099, or go to revproinsurance.com.

Crime Coverage: What You Need to Know

Powered by Trevor Allan of Alliant Insurance Services, Inc.

Commercial Crime coverage is a type of insurance designed to provide coverage for a wide range of crimes including: employee dishonesty, theft of money, burglary, forgery, computer fraud, and many others. One of the more common crimes in the automotive industry happens to be employee theft of parts and inventory. One of the main reasons is automotive parts are both valuable and can easily be sold online using websites like eBay and Craigslist. In most cases, a part or two may go missing or disappear, but there are many examples of employees with access to the warehouse stealing large quantities of parts or even clearing out the entire warehouse. This doesn’t mean all employees are thieves, but it’s important to implement procedures to help prevent theft and also have coverage in place to protect the assets of the company.

The good news is crime coverage is rather inexpensive, and adequate limits can be purchased to meet your specific needs. When purchasing insurance, it’s important to know what your crime limit is and what it covers. You should evaluate the limit based on your company and the value of inventory, rather than using the general amount included in the property policy. It is best to discuss claims examples with an agent that understands the automotive industry so you can understand where you are most vulnerable and make necessary changes.

In addition to employee theft, other crime coverages are important and should be considered for certain businesses. In most cases, when you buy a crime policy with employee theft, the other coverages are included under the same coverage form at little to no additional cost. The first step would be to look at your property policy and see if a sublimit is provided for employee theft. If this limit isn’t enough, you should talk to your agent about purchasing higher limits or purchasing a separate crime policy.

For more information, call 800.390.9099, or go to revproinsurance.com.

3 Things You Should Know About Race Sponsorship

Sponsoring a race team has been around since the early days of racing and continues to have a positive impact on the racing community. Without sponsors, many race teams or even race series would never exist. It’s clear that sponsors will continue to play an important role in racing for many years to come, so it’s important for sponsors to understand any potential liability associated with racing. In this article, we will discuss 3 things that are commonly misunderstood.

1. Many sponsors believe they have insurance coverage through the team they sponsor. This may be the case, but it’s important to have an understanding of the coverage they purchase and if it extends to their sponsors. It’s best to have this discussion with the team you sponsor and also have a contractual agreement in place.
2. Some companies believe they have coverage through the sanctioning body or race series. This may also be the case, but take this example into consideration. You sponsor a vehicle racing in a series that has an insurance policy with a $1,000,000 liability limit. You are 1 of 10 sponsors on a vehicle that kills another driver, spectator, or even worse, spectators. Do you feel $1,000,000 is enough to cover everyone named in the lawsuit?
3. Another misunderstanding is that coverage is provided by your standard commercial liability policy. It’s not uncommon for standard business insurance policies to exclude racing. If you expect your standard liability policy to provide coverage, it’s important to have this discussion with your agent to confirm this coverage is included. Most of the time, a separate owners and sponsors policy should be purchased.

Overall, it’s important to understand if you have the proper coverage in place. If you are unsure, we recommend discussing your exposure with an agent that understands motorsports.

For more information, call 800.390.9099, or go to revproinsurance.com.