Fall 2011
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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.


Unfortunately, over the years it's gotten bigger and bigger, making it impractical to mail a hard copy.  We're also trying to make it more interactive, incorporating more pictures and video, as well as link directly to other articles.  So publishing it via email makes more sense.


If you're not already, please sign up to receive our newsletter on our website, www.bretdixonins.com.  In the meantime, enjoy this copy of our most recent issue, from September.

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Surveillance Cameras Clear Bar In Dunn Crash

We've written it before, and we'll surely write it again, but having a security camera system in your establishment can mean more than just an insurance discount.  Sometimes, you may really need the footage those cameras record to clear you from liability. 


Back in June, "Jackass" star Ryan Dunn was out drinking at a bar just outside Philadelphia.  He left the establishment and wrecked his Porsche while travelling as fast as 140 mph, killing himself and a passenger in the process


The bar said they had served him two beers and six shots over a four hour period and each time he was served he exhibited no signs of being intoxicated.  However, when the toxicology report was returned, it was learned his BAC at the time of the wreck was 0.196, and things seemed to be shaping up as "his word vs. theirs" type argument. 


However, the Pennsylvania State Police Bureau of Liquor Enforcement investigated the matter and found insufficient evidence to hold the establishment accountable.  How was the bar cleared?  By their own security camera system.


"He spoke clearly.  He walked clearly.  He came in hop, skip, jumping and he left hop, skip, jumping," said general manager Frank Herron.  Liquor Enforcement agreed, finding that Dunn did not appear intoxicated. 


Additionally, the footage showed that Dunn wasn't eating as he drank (meaning the liquor he did consume was absorbed into his bloodstream more quickly), and in fact, toward the end of his visit, some fans gave him a final round of drinks, not the bar.


It's a sad, unfortunate incident, one that can provide valuable lessons to many people.  To you businessowners, one to take away from it is this: security cameras can save your butt.


Discounts for having a security camera system vary based on many characteristics.  If you're looking into getting a camera system or upgrading your current one, consider the following:


  • Ideally, it's better to have cameras covering public and private areas of your premises - not just the areas open to patrons, try to have camera coverage of your back areas as well - stockrooms, kitchens, garages, employee lounges, etc... - where only employees have access. 
  • It's also ideal to have cameras covering the exterior of your premises - the entrances and parking lots, where patrons may claim to slip, trip or fall.
  • Don't just use your system for live monitoring, get a system that records the activity as well.
  • Consider a system with a larger harddrive for more memory.  The longer you can backup or maintain footage, the better.
  • Any time an incident occurs from which a claim could arise, try to make a manual backup of that event, should you need the footage long after it's been discarded or overwritten by your system.  Copy it off onto a CD or DVD disc, or back it up to an external harddrive.
Use BDI's Classifieds To Buy or Sell Your Equipment
Our website recently underwent a redesign in order to freshen up the look, streamline a few things and make it easier to navigate.  One feature that's been resurrected was the 'Classifieds' pages.  At one time several years ago, we had a fair amount of equipment listed there.  But as other parts of the site were updated, expanded and tweaked, the Classifieds got pushed aside and neglected.


Screenshot of our Classifieds page

We still think it's a useful tool for our insureds to have access to, and best of all it's FREE.  We don't want a listing fee and we don't want a commission on any sales.  We just want you to have a place to move some old stuff you no longer need or shop for some items you'd rather not have to buy new.  Since we insure so many restaurants and taverns, two industries with fairly high turnover and lots of specialized equipment, it only makes sense to bring back our Classifieds pages.


We've updated this portion of our website to include items from other businesses we insure - garages, office equipment, etc...  So if you have something you no longer need, try selling it rather than pitching it.  And if you're on the lookout to upgrade some of your businesses tools or equipment, bookmark the page and check back every few weeks.
Spotlight On: Business Auto Coverage    
Your business may face several different liability exposures arising out of the use of automobiles.  You may have an exposure even if your business does not own any automobiles.  Yet, many businessowners don't realize the risk they face in such a scenario.


Hired & Non-Owned Auto Liability
Hired Auto Liability coverage will pay for damages to a third party, on behalf of your company, if you or an employee cause an accident or an injury to someone while you are driving a rented or "non-owned" vehicle for business.  In such a situation, the injured person will sue your company for the damages.  Without this coverage, your company likely has no defense for such a claim.


The same scenario applies if you have an employee run an errand, make a delivery, or visit a client or customer in his or her own car.  When the employee causes the accident, the injured party is going to look to your business for damages since the employee was using the car on company time.  This could occur even if you casually ask a friend to pick up supplies for you the next time they go to a store and are involved in an accident.


If your business doesn't own any automobiles and the exposure is limited to you and your employees using personally-owned vehicles, then an endorsement for Hired & Non-Owned Auto Liability can be added to your General Liability policy or the General Liability section of your Businessowners or Package policy.  If you don't deliver products, it's usually very inexpensive.  If you do deliver, your insurer will want to know how many employees you have delivering, their delivery radius, and will want Motor Vehicle Records (MVRs) on your drivers to ensure they're legally licensed and judge how "clean" their driving record is.


Business Auto Policies
If your company owns any autos, you need a Business Automobile Policy (BAP), and Hired & Non-Owned Auto Liability would be included under that policy.  Additionally, you'll need more coverage which the Business Auto Policy can afford.


A Business Auto Policy provides coverage for automobiles used by a business when a liability judgment arises out of the use of the automobile or the auto is subject to damage or destruction.  The business can select coverage for any auto in use, whether a business auto, personal auto, a hired auto or borrowed auto.  The typical Business Auto policy is organized into several sections, as follows:


  • Section I - identifies vehicles that are covered, assigning them "Symbols".
  • Section II - outlines liability coverage in the event the business' negligent acts or omissions result in bodily harm or property damage to a third party as a result of owning or operating the covered vehicles.
  • Section III - covers physical damage coverage for property damage to the business' covered vehicles under three classifications:
    • Comprehensive - pays for all physical damage to the business' vehicles regardless of cause with the exception of collision with another object or in the event the vehicle overturns.
    • Collision - pays for physical damage to the business' vehicle resulting from contact with another object, or if the vehicle overturns.
    • Specified Causes of Loss Coverage - pays for physical damage to the business' vehicle only resulting from fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, or vandalism
  • Section IV - details the conditions that the insured must observe in the event of a loss, such as give prompt notice to the company, submit proof of the loss, submit to an inspection of damaged property by the company, and cooperate with the company in the event of a liability suit.  Also describes the company's obligations if a loss should occur.
  • Section V - defines the terminology in the vehicle form, such as the meanings of "auto", "accident", "bodily injury", and "property damage".


Prepare For Winter - Safeguarding Your Property  
Cold weather can shine a light on an often overlooked indoor risk: heating systems.  Furnaces, fireplaces and space heaters need regular attention and maintenance to work effectively and safely.  Carbon monoxide, fire and smoke are three dangerous, but preventable, risks in the winter.

What To Do:
  • Check heating equipment regularly, at least once per year.
  • Keep exterior vents clear of snow, shrubbery and other debris
  • Schedule professional cleaning for flues and chimneys once a year
  • Install at least one carbon monoxide detector in your home or building, near bedrooms if you have any.  Additional detectors on every level provide extra protection.

Fire and Smoke
Space heaters and fireplaces that are improperly operated or maintained pose significant fire and smoke risks.

What You Can Do:
  • Turn off space heaters when you leave a room or get ready to sleep.
  • Keep space heaters at least 3 feet away from walls and flammable objects.
  • Make sure your electric space heaters cord isn't damaged or frayed. Never use extension cords with space heaters.
  • Never leave a fire in a fireplace unattended.
  • Clean and inspect dampers and flues.
  • Install smoke detectors per the manufacturer's instructions. Check them monthly and change the batteries at least annually.

Freezing Temperatures & Your Plumbing
Cold weather freeze-ups can cause vital plumbing or fire protection systems to malfunction.  Cold temperatures can also cause sprinkler piping to burst, which may result in major water damage to buildings, contents, and equipment.  Pipes bursting can also impair automatic sprinkler systems and leave a major portion of your facility without fire protection.  A fire during this situation my result in a major interruption to your business and a huge loss.  Because of this, building temperature should be maintained at 40 degrees or higher, monitored and documented.  Even if your property is vacant or rarely used, you have a duty to make minimal safety efforts, such as maintaining the heat, to ensure pipes won't freeze and burst.

In the interest of maintaining sprinkler protection in your property, building owners and tenants must be aware of cold weather and freezing temperatures.  All key personnel should be aware of freeze protection and emergency preparedness procedures.  Create and utilize a Winter Weather Preparation Checklist to ensure you're ready for sub-freezing temperatures.

Water Supplies
  • Tanks should be leak-free and pressure should be checked.
  • Water temperature should remain at 42 degrees or above.
  • Fire hydrants should be checked for proper drainage by outside contractors or water department.
  • Buried sprinkler control valves and valve pits should be marked in the event of heavy snowfall.
  • Fire pump room should not drop below 70 degrees.
  • Post indicator valve, OS&Y valve, and test header to pump inspected regularly.

Wet Pipe Sprinkler Systems
  • All areas of building with sprinkler systems should maintain temperature above 40 degrees or above.
  • Cold weather valves should be closed while all others should remain open.
  • Windows, skylights and doors should be in good condition and sealed tightly.
  • Check temperatures with thermometer.

Dry Pipe Systems
  • Dry lines should be checked for proper drainage as trapped water can freeze and cause breakage.
  • Check drains located in cold places for freezing.
  • Dry-valve clapper should be properly set with temperature maintained at 40 degrees or higher.
  • Low air pressure alarms should be provided, calibrated and connected to constantly attended location.
  • Low pressure switches should be set at 5 PSI, which is above trip point of dry pipe valve.
  • Air pressure checked regularly with records maintained to indicate normal pressure.
  • Air drying equipment available to supply air to system as designed.

** Never attempt to thaw piping using blow torch or open flame**  
Reviewing Replacement Cost 
Last issue, we ran a brief article on why the "value" of your home may be down, but your homeowners policy isn't any cheaper.  The culprit is that you should insure your home for "Replacement Cost," which is often more than your home is worth on the market due to building materials and labor prices staying high.
Replacement Cost is something some people just have trouble grasping, whether we're talking homeowners or owners of commercial property.  So this is a topic that warrants some expansion.
Without fail, the biggest inequality we see in homeowner quotes we generate is that our current RC Estimate is higher than the limit a homeowner already has.  This article recently pegged 68% of American homes as being underinsured, and by an average of 18%.  In our experiences, that 68% number may be a bit low.  There could be many reasons for your Dwelling Coverage (also called "Coverage A") to be low - you haven't reviewed your limit in years, you didn't tell your agent about a home addition or renovation, your agent guessed at your limit, or simply chopped it down to suppress your premium and keep your business.
Why's This Limit So High?
That's the question that invariably gets asked, followed by something along the lines of, "What can I do to make this cheaper?"  Quite frankly, there isn't much we can do to modify your replacement cost.  The replacement cost is the replacement cost.  You can try running one of your own at a website like this one

More and more insurers are realizing the problem they have with so many under-insured policy holders, and are tightening their requirements.  As such, we have to insure homeowners to 100% of the Replacement Cost of their home.  Not all companies have taken such measures yet, or, if they have, unscrupulous agents may circumvent that by fudging the estimate, which may make two different quotes you receive for the same home as comparable as apples and oranges.

You could go underinsured for years and never know or care.  But when you have a catastrophic claim you'll find out why Replacement Cost matters, but by then, it's too late to do anything about it.  
BDI Teams Up with AFLAC   

We recently signed a contract with AFLAC to offer their disability products.

There are some who don't understand what disability insurance is.  It is not major medical health coverage.  You need health insurance. It doesn't cover you for on-the-job injuries.  Your employer's workers compensation should provide benefits for work-related injuries.  Aflac provides supplemental income to cover your ongoing expenses if you suffer an injury in your personal time. 


If you are inured or become sick, your health insurance will help you pay for your medical bills.  That's it, just medical bills, nothing more.  But if you're laid up in the hospital and can't work, you or your family are still going to have rent or mortgage bills, grocery bills, transportation costs, child care and all kinds of daily expenses.  It's for all these other ongoing expenses for which you and your family has no safety net other than your personal savings.


Contact us today to learn more information about Aflac's disability insurance. 

Aflac Dancing Duck TV Commercial



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Bret Dixon Insurance
In This Email
Another Lesson In Video Surveillance
BDI Classifieds Are Back
Spotlight On: Business Auto
Winterizing Your Building
Reviewing Replacement Cost
Newest Partner: AFLAC

What happens 473 times every hour?

According to the Department of Transportation, traffic accidents happened at that rate in 2008 (the most recent stats we could find).  Are your personal auto limits up to par, or are you carrying low-limit, cut-rate coverage?


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. 

Click here for more information.

Upcoming Events & Holidays 

We will have our booth at the Illinois Licensed Beverage Association's annual convention & trade show again this year.  Come by and see us Monday, September 12th, at the Hilton Garden Inn in Effingham from Noon-4pm. 


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. 

AFLAC Insurance
AFLAC is an A+ ("Excellent") rated company based in Nebraska, and the newest addition to our stable of insurance companies.  They have a fairly narrow appetite, specializing in disability insurance for individuals and families.