Bret Dixon Insurance
Spring 2010
Bret Dixon Insurance News
Our newsletters are intended to keep you up to date on pertinent industry news and offer more in-depth insight into various types of coverage and endorsements.  We publish our newsletters at least once each quarter.  We hope you enjoy it.
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Another Reason to Join an Industry Association

There's a myriad of reasons to join an industry association: someone to stand up for businessiness like yours, insurance discounts, free or discounted server training, opportunities to network with your peers, and minor discounts on a host of other products and services.

Now, the Illinois Licensed Beverage Association has added something even sweeter.  They've partnered with a firm called Glacial Energy.  Glacial Energy buys power in bulk at a discounted rate, then, through partnerships like they've entered into with the ILBA, sells it back to businesses. 

As members of the ILBA, we checked in to see what they could do for us.  Our office's power consumption is pretty modest compared to even small bars and restaurants.  We have an annual usage of about 50,000 kilo watt hours (KWH).  Going directly to AmerenIP for our power, our rate was approximately $0.07764 per KWH, for annual utility costs of about $3882.  However, buying our energy through Glacial Energy at their discounted rate of $0.05744 per KWH our annual utility costs will be $2872.  That is a 26% savings that will let us cut over $1000 out of our budget.

A small bar near our office also made the switch.  They had an annual usage of nearly 100,000 KWH and were paying about $7000 a year in utility costs.  By taking advantage of this opportunity they'll be saving about 21%, nearly $1500.

These savings are a lot more than just a drop in the bucket, we're talking some serious savings here.  Better yet, based on what we've heard, these two examples aren't exceptions to the rule; they seem to be in-line with what other ILBA members are getting in savings.   We've talked to other members who have kicked the tires on this deal.  Across the board, the average annual savings seems to be around 20%.  One business we heard from is saving almost $5000 a year by switching.  This entrepreneur's business obviously consumes a lot of power, but still, that's a hefty savings to his bottom line.

The best part of this:  Glacial Energy doesn't require a contract or any sort of commitment.  They figure that with the savings you get, you'll probably stay committed long-term.  There are no fees to switch and no interruptions in service. 

Glacial Energy is currently working on similar deals with natural gas companies as well.  We'll pass along more info when they're able to offer discounts on that service as well.

2010 Illinois Dram Shop Liability Limits
On January 20th of each year the Illinois Comptroller is required to determine the liability limits under the Liquor Control Act of 1934 for causes of actions brought under the Act, in accordance with the consumer price index change during the preceding 12-month calendar year. 
According to the Bureau of Labor Statistics, the Consumer Price Index increased 2.72% during the preceding calendar year.  Based on these new figures, the liability limits are:
Bodily Injury:  $60,247.68 per injured/damaged person
Property Damage:  $60,247.68 per injured/damaged person
Loss of Society/Loss of Means of Support:  $73,636.05 per person.
For perspective, below are the past limits.
Bodily Injury
2000:  $46,949.92
2001:  $48,541.52
2002:  $49,293.91
2003:  $50,467.11
2004:  $51,415.89
2005:  $53,092.05
2006:  $54,907.80
2007:  $56,302.45
2008:  $58,599.59
2009:  $58,652.33
2010:  $60,247.68
Property Damage
2000:  $46,949.92
2001:  $48,541.52
2002:  $49,293.91
2003:  $50,467.11
2004:  $51,415.89
2005:  $53,092.05
2006:  $54,907.80
2007:  $56,302.45
2008:  $58,599.59
2009:  $58,652.33
2010:  $60,247.68
Loss of Society/Loss of Means of Support
2000:  $57,383.23
2001:  $59,328.52
2002:  $60,248.12
2003:  $61,682.02
2004:  $62,841.64
2005:  $64,890.28
2006:  $67,109.53
2007:  $68,814.11
2008:  $71,621.72
2009:  $71,686.18
2010:  $73,636.05
Percent of Change
2001:  +3.39%
2002:  +1.55%
2003:  +2.38%
2004:  +1.88%
2005:  +3.26%
2006:  +3.42%
2007:  +2.54%
2008:  +4.08%
2009:  +0.09%
2010:  +2.72%
The numbers speak for themselves.  In the last ten years, Bodily Injury and Property Damage have risen by $11,706.16, respectively, while Loss of Society/Loss of Means of Support has increased by $14,307.53.  The lesson we try to stress to our clients is that the cost of Liquor Liability claims goes up every year.  If you're still one of those people carrying $300,000 in liquor liability coverage, you're playing with fire.
In a one person claim, you're probably safe with a liability limit like that.  But even a two person claim, with maximum damages awarded per person for Bodily Injury, Property Damage and LS/LMS, you could face a potential claim of $388,262.82 - putting you almost $90,000 out of pocket without considering whether your policy limit includes or excludes defense costs.
Even with a $500,000 Liquor Liability limit, it doesn't take much stretching of the imagination to envision a potential claim that would exhaust half a million dollars of coverage.  Increasing damage settlements such as this are precisely the reason that $1 Million in liquor liability coverage is becoming the industry standard.
Spotlight On:  Mine Subsidence Coverage
This time of year, as the ground thaws from winter's retreat and softens due to springtime showers, it's not uncommon to see a few stories or claims about buildings damaged by old mines sinking.  This process is called subsidence, and a story we found late last month about a dam in Pennsylvania piqued our interest on the subject.
In 2005, a dam at Ryerson Station State Park in Greene County, Pennsylvania was cracked, making it dangerously unstable and forcing the 62-acre Duke Lake to be drained.  A study was conduced and in the report published last month, it was determined that a nearby mine was responsible for the shifting of the ground that made the dam crack.
Most Property insurance - homeowners and commercial property - excludes mine subsidence as a covered peril, with the exception being listed below.  But you can choose to "buy-back" this coverage as an optional endorsement to the property portion of your policy, regardless of your state, county, or the history of mining in your area.
Mine Subsidence coverage differs by state.  In Illinois, a company is required to offer it if mines existed at one time or another under one percent or more of the land.  34 counties are affected by this requirement.  Even if you live in one of the affected counties, you can choose to reject the coverage.
In Indiana, mine subsidence coverage is not required to be offered to you in the 26 counties with a record of mining.
Missouri does not have any requirements about mine subsidence coverage having to be offered.
The coverage is relatively inexpensive, with a cost ranging from just a few dollars a month for homeowners, to under $200 per year for our average commercial clients.  There typically is not a lot of claim activity related to mine subsidence, but the claims that are filed are usually quite substantial. 
Another point to consider when debating mine subsidence coverage - not all all mines were mapped, and the accuracy of those maps aren't ironclad.  As the Illinois State Geological Survey, the organization responsible for maintaining Illinois' mine system maps, disclaims:
"Please note the accuracy and completeness of the mine maps vary, depending on the availability and quality of source material.  Little or no information is available for many older mines because mining activity was not regulated or documented until the late 1800's.  Even then, reporting requirements were minimal.  Also, early mine maps were often sketched by miners working in the mine at the time, or were constructed solely from memory.  However, mine maps are a good source for determining if mines are present in the general area of your property." 
Dollars and Sense: Considering Liquor Liability in Missouri
Many businessowners we consult with in Missouri are reluctant to purchase liquor liability, also known as Dram Shop, insurance.  They cite the price, of course, but also often point out that there are but few examples of awards handed out by courts under the "dram shop law."
Recently, a case involving a St. Louis restaurant that reached a $2,250,000 settlement for an auto accident involving an allegedly intoxicated patron was reported on various news stations and in the papers. 
Clearly, liquor liability is a serious exposure with potentially large consequences in Missouri.  Its not something you should ignore because you're not aware of many cases involving bars or restaurants being found guilty of serving an intoxicated patron.  The law is such that you, the liquor-serving establishment, can and will be held liable and there is legal precedent of large claims.  When the victims of allegedly intoxicated persons sit down to figure out who they can sue for their damages, who do you think they lick their chops over more - you the business with a steady stream of customers coming and going day after day, or poor little John or Jane Doe?  We've seen it time and time again, they're going to follow the money.
The thrust of this article isn't to focus on the history of dram shop settlements in Missouri.  Let's look past court judgments for a moment.  The biggest cost of liquor liability claims are the legal fees.  Court fees, filing fees, document fees and of course attorney fees.  Without liquor liability protection, you have to reach into your pocket just to defend yourself.  That can get costly, quickly.  But with a liquor liability policy, your insurance company defends you.  And with the right kind of liquor liability policy, your defense costs are separate of your policy limit, so even if you have a claim and get drug into a protracted, costly legal fight, only to lose the matter, your policy isn't eaten away by your defense costs.  These are the liquor policies we sell.
If you're a Missouri businessowner with a liquor exposure, the decision to purchase liquor liability protection shouldn't come down to dollars and cents.  It should be based on sense - common sense.  You've invested a lot of time and money in establishing your business.  Don't leave a gaping hole in your protection of it.
Reducing Slip & Fall Hazards
Looking for ways to cut insurance costs?  Everyone is right now.  How about starting with something you can control, your employees?  Through some relatively modest investments in employee safety and stressing safety to your employees, you could reduce claims from your employees (workers compensation) and your patrons (general liability) and, with a couple of claim-free years, lower your premiums by becoming eligible for a loss-free discount or two.
Grease and water on the dish room floor or a mat with an upturned corner are just a few of the slip and fall hazards that commercial kitchen employees face every day.  But managers and employees alike can minimize the risk through vigilance and proper cleaning practices.  OSHA also has standards that employees must meet in order to protect restaurant employees and patrons from harm.
Potential Hazards
All restaurant employees face the danger of slipping and falling.  Slips and falls can result in injury that will result in lost work hours and can negatively effect the restaurant's safety reputation.  OSHA recognizes the following conditions as hazards to restaurant employees that can result in slip and fall injuries:
  • Cluttered and slippery floors from oil, water or food in the cooking and dishwashing areas can cause falls.
  • Physical obstructions like improperly placed drain covers are especially hazardous to kitchen workers.
  • Employees that put away new inventory are subject to fall hazards because they cannot always see obstructions in their path.  Weather conditions can also play a role for employees taking items off the delivery truck.
  • Servers and bussers also face fall hazards when carrying trays or stacks of plates around blind corners or through single entry doors to the kitchen.
What Employees Can Do to Protect Themselves
There are several recommendations that commercial kitchen employees can follow in order to protect themselves from falling.
  • Wear non-slip, waterproof shoes to decrease the chances of slipping
  • Clean up any spill immediately
  • Do not run in the restaurant
  • Properly store all products and supplies to eliminate clutter
  • Be aware of outside weather conditions and dress appropriately when unloading supplies
  • Apply de-icing products to exterior walkways and entryways to protect both employees and customers
  • When carrying stacked items, employees should be able to see over the stack to clearly navigate to their destination
  • Be sure that rugs and mats are in their proper places and that all corners or edges lay flat
  • Do not overfill bus tubs, since items may fall out and cause a trip hazard
What Employers Can Do to Protect Employees
It is the restaurant owner's responsibility to provide a safe, injury-free environment for employees and customers.  Though accidents do happen, there are several initiatives many employers can take in order to reduce the risk of slip and fall injury in the commercial kitchen.
  • Provide two double swing doors with window on the kitchen entrances to assure those exiting and entering the kitchen can see what is on the other side
  • Provide floor or ceiling outlets to plug in equipment so power cords do not run along walkways.  But make sure floor plugs are not in areas where water on the floor is common, since this could cause electrocution
  • Stretch or re-lay any carpet that is bulging or bunched-up to eliminate a tripping hazard
  • Use non-slip floor mats or non-skid floor waxes on surfaces where water or oil may be spilled
  • Provide adequate floor drainage in wet areas
  • Place convex mirrors at blind corners
  • Provide adequate lighting in all kitchen and cooking areas so employees can see where they are going
  • Replace any drain covers that are loose or broken
  • Require employees to purchase non-slip restaurant shoes to assure adequate footing on wet surfaces
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Bret Dixon Insurance
In This Email
Another Reason to Join an Industry Assoc.
2010 IL Dram Shop Limits
Spotlight On: Mine Subsidence Coverage
Missouri Liquor Liability
Reducing Slip & Fall Hazards
Don't Forget Our Personal Lines in 2010! 
We offer a full-line of personal lines coverages for your home, auto, boats, motorcycles, RVs, and more.  Give us a shot at your next renewal to see how we compete. 
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Bret Dixon Insurance | P.O. Box 205 | Bethalto | IL | 62010