Bret Dixon Insurance
Fall 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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Revised Flood Maps to have Dramatic Impact

Earlier this week, three southern Illinois counties sued FEMA in an attempt to hold up changes to revised flood maps which will go into effect late next year.


After Hurricane Katrina in 2006, FEMA has been updating their flood maps around the country.  The change happening in this part of the country is not unique.


Officials for Madison, St. Clair and Monroe counties are upset because the rezoned maps will have dire consequence on development and economics of the 174 square mile floodplain that's home to about 156,000 residents, 7,000 businesses and more than 55,000 jobs.


The Metro East area is about to be swamped by flood insurance premiums that could cost residents and businesses and additional $50 million per year.


One of FEMA's main tasks is to administer the National Flood Insurance Program.  They evaluate levee systems for flood risks and publish their conclusions as flood insurance rate maps.  The current levee system in the area, constructed by the Army Corps of Engineers some 60-70 years ago was designed to withstand a 500-year flood.  But FEMA's accreditation system for these levees is whether they can withstand even a 100-year flood, which they have concluded, they cannot.


At the heart of this fight is FEMA's grading system.  County officials and representatives of the cities in affected areas, claim that FEMA is operating in secrecy, ignoring scientific and engineering data that still show the levee system to be operational and stable.  They want FEMA to "show their work" as your math teacher probably used to say.


Although none have ever failed, the Army Corps of Engineers believes the river defenses are in need of upgrade.  They have acknowledged that their original design was flawed, although their annual studies still suggest the levee system in "acceptable" condition.


FEMA has made one small concession, offering up to two years' eligibility for the NFIP's "Preferred Risk" Policy - the program's lowest-cost option - to small businesses and homeowners on any land the new maps show as high-risk for the first time.  The new rates will become available after the redrawn maps take effect.  This could be a big savings.  The yearly premium for flood insurance for most homeowners might be around $300, about five times less than it would otherwise cost.  But that isn't what community leaders want from FEMA.  They want proof that their levees are any more of a risk now than they were just a few years ago.  And the battle is just beginning.

Safely Using Backbelts

Back injuries make up nearly 1/5 of workplace injuries & are the main cause of injuries to workers under age 45. 

They cost an estimated $20 billion to $50 billion per year nationwide.  These injuries take time to heal; injured workers may be off the job for significant periods of time.  Occasionally, you may have seen other companies' workers wearing supportive back belts.  Perhaps you wondered if providing them to your workers would reduce the risk of back injury.


According to the National Institute for Occupational Safety & Health (NIOSH), there is inadequate evidence to support or refute the notion that backbelt usage reduces the risk of back injury.  In other words, they are not yet certain if backbelt usage reduces or increases the risk of back injury.  NIOSH reviewed backbelt studies & concluded that the limitations of the studies did not enable them to recommend using backbelts.  (NIOSH performs research and makes recommendations for preventing workplace injuries & illness.  Their recommendations often become the basis for Occupational Safety & Health Administration (OSHA) standards.)


Wearing backbelts provides advantages & disadvantages


Advantages: Some evidence indicates that backbelts can spread loads on the spine over more of the body's structure.  Some researchers also think the belts can reduce injury by limiting spinal flexion, especially excessive bending forward or to the side.


Disadvantages: Some workers believe wearing backbelts increases their strength; they attempt to lift loads beyond their ability.  Belts exert intra-abdominal pressure, which can increase blood pressure and heart rate.


Whether or not you choose to provide backbelts, the following actions can reduce the risk of back injury:


  • Modify work tasks (e.g. use mechanical lifting devices so workers will not need to lift)
  • Modify material arrangement (e.g. store items at a height between knees & knuckles)
  • Modify materials (e.g. pack product in smaller, lighter quantities)
  • Provide lifting aids (e.g. forklift, hand truck, lift tables)
  • Teach safe lifting techniques & enforce their use:
    • Lift with leg muscles, not back muscles
    • Seek assistance or use mechanical lifting aid if item is too large or too heavy
  • Partially unpack a container if it is too heavy to lift while full
  • Instruct supervisors to remind employees to use safe lifting techniques when they see employees lifting in an unsafe manner
  • Provide refresher training to all employees as necessary
Spotlight On:  Assault & Battery Coverage

We recently came across a post on a law blog regarding an Assault & Battery claim in New York from last year.  Specifically, the case centered on an Assault & Battery exclusion the business had on it's Commercial General Liability policy (CGL).

The business was a delicatessen.  Alvarado, a patron of the deli, assaulted and stabbed Sal, another patron, on the sidewalk in front of the shop.  Sal died of his injuries and Alvarado was found guilty of assault and incarcerated.

The deli's CGL policy contained an "Assault and Battery Exclusion" endorsement, which read:

(1)  This insurance does not apply to Bodily Injury or Property Damage arising from, due to or caused by:

a.  Assault and/or Battery committed by any insured, any employee of any insured, any patron or customer of the insured, or any other person; or
b.  The failure to suppress or prevent any Assault and/or Battery or any act or omission in connection with any Assault and/or Battery; or
c.  The negligent hiring, supervision or training of any employee or agent of the insured with respect to the events described in a. or b. above.

Sal's widow filed a wrongful death suit against Alvarado and the deli.  In it, she alleged " the ownership, operation and control of the premises," including "failing to maintain order within the premises; in serving alcohol to persons intoxicated or likely to become intoxicated, including...Alvarado."

The deli's General Liability insurer denied coverage based on the Assault & Battery exclusion above and moved for summary judgment.  But the widow's counsel countered that:  (1) there were questions of fact regarding the underlying incident that had to be developed in discovery, (2) that the assault & battery exclusion applied to policies with liquor liability and thus, was inapplicable here because the deli's policy also excluded liquor liability coverage, and (3) that the policy exclusion was not applicable to the deli's negligence in regard to the underlying incident.

But the New York County Supreme Court upheld the insurance carrier's denial of the claim, holding that "if the negligence cause of action would not exist "but for" the assault, then coverage under the policy for the alleged negligence is excluded." 

In this incident, the two little words "but" and "for" take on a profound meaning.  Since it was determined the businessowner was negligent in no other way, besides the altercation happening at their front door, the policy language was allowed to stand and the deli had no coverage.

You may be wondering, "who buys a GL policy that excludes Assault & Battery?"  Quite frankly, lot of businessowners.  They probably don't know they don't have A&B, but they don't.  It's astonishing.  When you run a business open to the public, other people's problems have the innate ability to find their way into your business, and in the eyes of the law, that makes them your problem. 
A&B exclusions are more common than you realize, particularly on monoline policies.  It may be available, but you have to buy it via endorsement.  Or A&B coverage may only be available on the General Liability if you also purchase a Liquor Liability policy. 

We recognize that Assault & Battery claims do happen on the General Liability side, not just under Liquor Liability.  We know this is an important coverage to you, that it's more important to have all the right liability coverages, rather than just some of the big ones.  We list on our proposals whether Assault & Battery is included on the CGL so you can make an informed decision, rather than guessing whether or not you have it.
So be very careful if you're shopping your insurance around.  That old saying how you "get what you pay for" usually holds true.  If you're looking for cut-rate pricing, be prepared to have cut-rate coverage.
Auto Insurance: Keeping the Cost Down

With hundreds of auto insurance companies writing policies offering a variety of coverage options, shopping for a policy has become such a confusing ordeal that many people don't bother to comparison shop, ending up paying more than they need for premiums.  Driving expensive high-performance cars, getting stopped for moving violations, putting a lot of miles on your car each year, and having a young driver at home can run up your insurance costs sharply.  But how big a premium you pay also depends on the levels of coverage you buy, so consider your choices carefully.

There are discounts available to auto owners that could help shave dollars off your premium.  To help you save money on your premium, here are some suggestions to consider following:
  • Combine policies with one carrier.  Most owners with two or more cars will know that it makes sense to insure all their vehicles under one policy.  But you can also get a multi-vehicle discount if you insure a trailer or recreational vehicle on the same policy as your car.  Also, many auto insurers will reduce your car premium if you buy other coverage from them, such as a homeowners/renters or life insurance.
  • Buy a car that costs less to insure.  Expensive high-performance cars may be fun to drive, but they're costly to repair and the premiums can run two to three times higher than less expensive cars.
  • Equip your new car with safety gear.  An approved alarm system or other devices that deter thefts can get you a savings of five to ten percent.  Air bags for both driver and passenger can reduce injury, and costly medical bills in an accident, and may qualify you for a discount.
  • Maintain a good driving record.  No claims or traffic tickets for 36 months may qualify you for a reduced premium.  Drivers over the age of 50 with a clean driving record may also claim a rate reduction.
  • Use public transit or a carpool to get to work.  Drivers who hold their driving below 7500 miles a year generally qualify for a discount, and lessening or eliminating your use of a a car to commute can trim your premium.
  • Having a teenage driver in your home with a good academic record, can qualify you for a discount.  Also, if your child attends a college that is more than 100 miles from home and doesn't take a car along, that may qualify your for a premium break.  If you own more than one vehicle (and your insurance company allows it), add the teenager to your policy as the occasional driver of your least expensive car - and make sure he or she drives that car only.
Be sure to add our email address to your contact book to ensure that you continue receiving industry updates, informative articles and tasty tidbits.

Bret Dixon Insurance
In This Email
Revised Flood Maps
Safely Using Backbelts
Spotlight On: Assault & Battery
Auto Insurance: Keeping Cost Down
Don't Forget Our Personal Lines in 2011! 
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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Carrier Corner 
We represent over 15 insurance carriers and have access to many more via brokers, but you may only know one or two that we deal with.  Each issue, we'll highlight one of our valued partners in this space. 

Iowa Mutual
Iowa Mutual is an "A" rated company based in Iowa, writing business in Illinois, Iowa and Nebraska.  We use them to write homeowners and auto on the personal lines side, and commercial risks such as auto garages, contractors, restaurants, golf courses and a host of "main street" businesses.
Recently, we were named one of their top producing agents for the third quarter.