Tague Alliance End of Summer BBQ

The Tague Alliance staff had a great time with some of our members and partner insurance companies last Friday!  Thanks to everyone who showed!

Here is a link to our Facebook page so you can check out some of the photos:
https://www.facebook.com/pages/Tague-Alliance-Insurance-Services-Inc/157544370966

Or check out our Google+ photo page:
https://plus.google.com/u/0/photos/106526333406563306309/albums/5926877271664455649

Tague Alliance - Insurance Industry Report Out Now

At Tague Alliance we try to keep our members updated on what is happening in the insurance industry so we all have a better idea of the trends that will have an impact on our agencies and our clients.  Read the report below for a ton of good information:
http://www.treasury.gov/initiatives/fio/reports-and-notices/Documents/FIO%20Annual%20Report%202013.pdf

Wineries and Fire Hazard

Agents in our Southern California territories have great opportunities to write business for Wineries. Below is an article on the unique fire hazards associated with wineries. If you have questions about placing winery business, feel free to contact Tague Alliance for more info, and available markets (contact info at the end of the article)

Written By:

Laurie Infantino AFIS, CISC, CIC, CRIS, ACSR, CISR
President, Insurance Community Center, Insight Insurance Consulting




On July 12th of this year, The Insurance Community University taught a class on Wineries that was sponsored by AmWINS Insurance Brokers. That class discussed the distinctive exposures that a winery operation has and the unique insurance coverages that are available in the industry.

One of the coverages that we did not discuss, in any detail, was the simple peril of fire. On July 19th , just seven days after the class, Wines and Vines Magazine reported two significant fire losses that affected two different wineries; July 7th at Oakstone Winery in California and a few weeks earlier, in late June, Milleta Vista Vineyards near St. Paul, Nebraska. Both fires occurred in the early morning and were total loses. The buildings; inventory and equipment all went up in flames. Owners of both wineries intend to rebuild their facilities.

While fires are rare in the wine industry they tend to be catastrophic and hard lessons are learned following the flames being put out. The largest winery fire in 2005 on Mare Islands in the San Francisco Bay Area, which was caused by an arsonist, destroyed more than 4.5 million bottles and caused in excess of $54 million dollars in loss. Many wineries have still not recovered from that loss.

The cause of loss at the Oakstone Winery was not definitively determined but it was determined to have started on the side of the building near an electrical panel and forklift charging station. The cause of the loss at Milleta Vista Vineyards was still under investigation in late July. The fire destroyed the restaurant and wine storage portions of the business.

The article in Wines and Vines Magazine quotes Guy Colonna, a division manager for industrial and chemical fires at the National Fire Protection Association as having said: “there are no fire codes specific to the wine or beer industries”. He said; “ the single most dangerous aspect of winemaking is the risk of asphyxiation for staff working in confined spaces, often in the presence of carbon dioxide from fermentation or from inert gases for flushing out oxygen. “ Colonna went on to remark that while he does not think that “fire risk” is unique to wineries that the greatest hazard is provably from electrical systems and all the water used in winemaking”. His belief was that if wineries were compliant with current building and fire codes that the risk would really be minimal.

What is important in this discussion is the absence of any ordinances specific to the industry; that many wine operations are in older buildings; that many of the wineries do not have sprinkler systems AND if there is a loss that they will have to build in compliance with codes in effect at the time of the loss. It is , also, not uncommon for wineries to be operating out of converted buildings such as a home. In such cases the winery operation must comply with industrial and commercial codes.

Case in point is the Oakstone Winery. The building at Oakstone was built in 1966 and did not have a sprinkler system or a water supply because codes did not require these codes in place when the buildings were built.

With any winery loss that involved inventory or wine in process, we have to be cautious of the valuation clause found in the specific winery programs. Replacement of finished wine is close to impossible which then brings up the complex issue of determining if the insured has a business income loss. Most often finished wine is insured at selling price, however, in a total loss such as these two wineries that may easily incur a loss of income due to their not being able to produce wine for the foreseeable future.

Insurance lessons learned from these most recent winery fires include:

1. Making certain that wineries have Building Ordinance Coverage

2. Determine if the Building Ordinance Coverage covers “building ordinances in affect at the time of loss or building ordinances in affect at the time of replacement. With rare exceptions Building Ordinance Endorsements/coverage cover ordinances in affect at the time of loss which could limit the amount of coverage available

3. Make certain wineries have Loss of Income coverage AND that they have Building Ordinance on their Loss of Income and Building Ordinance Increased Period of Restoration

4. Review the valuation clause that is found in the policy for both the structural loss and inventory loss

5. Make certain that all equipment is covered properly in terms of amount of coverage; value of items; and whether the equipment is insured as part of the winery program as equipment that includes mobile equipment.

Tague Alliance, an SIAA Member:  Ph (760) 729-1143, email: info@taguealliance.com

Additional insured, waiver of subrogation, & primary & non-contributing on GL policy

Here is a great Q&A from Marjorie L Segale regarding Waivers of Subrogation, Non-Contributory wording, etc.


Answer Written by:

Marjorie L. Segale, AFIS, CISC, RPLU, CIC, CRIS, ACSR, CISR
Director of Education, Insurance Community Centr, LLC
President, Segale Consulting Services, LLC



QUESTION:

Question about adding an additional insured, waiver of subrogation, and primary and non-contributing on the GL policy.


The answer was the waiver of subrogation is automatic if entered into before the loss and add the primary and non-contributing endorsement. My understanding it is the other way around. The primary wording was included and you had to endorse the waiver of subrogation (CG 2988). I read the policy (CG 00 01 10 01)and found the primary wording on page 11 of the GL policy and found on page 12 you must do nothing to impair the rights to recover.

In my list of GL endorsements I couldn’t find anything about primary and non-contributing.

Am I correct or did I read the question and answer wrong?


Submitted by Insurance Community Member


ANSWER:

Well, you hit upon the one question that I included just to be a total geek. I am impressed that you went to the policy to look before writing to us.

Here's what I want you to go back and check out. Remember to read the policy, not as the coverage for your own insured, but rather view the coverage as provided for an Additional Insured.

Waiver of Subrogation:

The CGL automatically allows a waiver of subrogation. Condition Number 8 begins with a stern statement that the insured's rights are given to the insurance company and "you must do nothing AFTER loss to impair" those rights. The policy therefore allows subrogation waiver prior to a loss, but forbids waiving those rights after a loss occurs. The main purpose of obtaining the Waiver of Subrogation endorsement is to have an express agreement, but actually is not needed and if you read the endorsement is a little restrictive in the application of the waiver.

Policy Language:


8. Transfer Of Rights Of Recovery Against Others To Us

If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to us and help us enforce them.

Primary, Non-Contributory

Other Insurance Condition Number 4:

There are two main paragraphs regarding the issue of other insurance: Primary and Excess

The language under the first paragraph says that the general liability policy is primary unless other primary insurance also applies. If there is other primary insurance available to the insured (think additional insured here) then under the next paragraph the policy says it will share on a contributory basis with the other insurance. Paragraph b. of this condition says that this insurance will be excess over other valid and collectible insurance for the named insured. This language, therefore, has no impact on the Additional Insured.

So, the purpose of primary, non-contributory is to modify paragraph a. Primary Insurance as it applies to the Additional Insured. Since the Additional Insured has their own separate insurance, there would be two primary policies available for the Additional Insured. From the standpoint of the AI, they are transferring risk to your insured and wants their own insurance program to be excess over your insured's policy.

Policy Language:

4. Other Insurance

a. Primary Insurance

This insurance is primary except when Paragraph b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in Paragraph c. below.

b. Excess Insurance

(1) This insurance is excess over:

(b) Any other primary insurance available to you covering liability for damages arising out of the premises or operations, or the products and completed operations, for which you have been added as an additional insured by attachment of an endorsement.

Want to become a member of SIAA to obtain direct agency appointments? You can call Tague Alliance for more info: (760) 729 -1143, or email at info@taguealliance.com

Tague Alliance 8th Annual Awards Dinner

At Tague Alliance we put a very heavy emphasis on profitable growth with our partner insurance companies and each year we celebrate our results at the Annual Awards Dinner.  This gathering is designed to bring all our constituents together (members, carriers, and staff) to deepen our relationships and reinforce our the value of our partnerships!

The value that SIAA as a national group brings to our local Tague Alliance members is huge, and as a local SIAA Master Agency in California Tague Alliance is able to deliver deep value to our member agencies and partner carriers.  We are very blessed to have an extremely talented and experienced group of carrier executives supporting Tague Alliance.  As we all know nothing starts without a sale, so thank you to all our member agencies who are the horsepower behind Tague Alliance.  Of course, without our Tague Alliance staff supporting the entire effort we would not be where we are today.  It takes all of us contributing to be successful!

Thank you to everyone for your commitment to growing profitably!  Below is a link to our photos and a small montage of photos.  See you all at our 9th Annual Awards Dinner.

8th Annual Awards Dinner Photos

Photo montage on YouTube

Fighting Insurance Fraud - Some Red Flags That Should Cause An Insurance Agent To Ask More Questions

Tague Alliance works diligently with our member agencies to help them build profitable and stable independent insurance agencies.  In working to mitigate our loss ratios we need to utilize all frontline underwriting tools and insights that are available.  The article below provides some great tips on various red flags that an insurance agent should be aware of.

Fraud Red Flags

Allied's Special Investigation Unit (SIU) is where the fight against insurance fraud ends. Your agency is where it begins. By reviewing this list of red flag behaviors for a new applicant, you may be able to head off a potential fraudulent claim.

Please note: The following are industry red flags as established by the NICB. The presence of one or more does not prove fraud.

NICB general indicators of application fraud

The following list of behaviors may indicate a possibility of intent to commit fraud when applying for insurance.

• Unsolicited, new walk-in business, not referred by existing policyholder.
• Applicant walks into agent's office at noon or end of day when agent and staff may be rushed.
• Applicant neither works nor resides near the agency.
• Applicant's given address is inconsistent with employment/income.
• Applicant gives post office box as address.
• Applicant has lived at current address less than six months.
• Applicant has no telephone number or provides a mobile/cellular phone number.
• Applicant cannot provide a driver's license or other identification, or has a temporary, recently issued or out-of-state driver's license.
• Applicant wants to pay the premium in cash.
• Applicant pays minimum required amount of premium.
• Applicant suggests price is no object when applying for coverage.
• Applicant's income is not compatible with the value of the vehicle to be insured.
• Applicant is never available to meet in person and supplies all information by telephone.
• Applicant is unemployed or self-employed in transient occupation.
• Applicant questions agent closely on claim handling procedures.
• Applicant is unusually familiar with insurance terms or procedures.
• Applicant is not signed in agent's view (i.e. mailed in).
• Applicant works through a third party.
• Applicant has had a driver's license for significant period, but not prior vehicle ownership and/or insurance.

NICB indicators associated with coverage

Existence of any of the following conditions may indicate intent to commit fraud.

• Name of previous insurance carrier or proof of prior coverage cannot be provided.
• No prior insurance coverage is reported although applicant's age would suggest prior ownership of a vehicle and/or property.
• Significant break-in coverage is reported under prior coverage.
• Question about recent prior claims is left unanswered.
• Full coverage is requested for older vehicle.
• No existing damage is reported for older vehicle.
• Exceptionally high liability limits are requested for older vehicle inconsistent with applicant's employment, income or lifestyle.

NICB indicators associated with applicant's vehicle/business

Existence of any of the following conditions may indicate intent to commit fraud.

• Vehicle is not available for inspection.
• Photos are submitted in lieu of inspection.
• Vehicle does not appear to be appropriate for the claimed address or income.
• Vehicle has an unusual amount of after-market equipment (stereo, wheels, car phone, etc.)
• Vehicle inspection uncovers discrepancy between VIN listed on title/bill of sale and the VIN plate on the dashboard or the manufacturer's door sticker.
• No lienholder is reported for new or high-value vehicle.
• Vehicle title or authenticated bill of sale cannot be produced.
• Applicant is seeking new business coverage and has never been in any, or this type of business, in the past.
• Sound financial backing for the business to be insured is not apparent.
• Loss payee is not a legitimate lending institution.

© 2001 Allied Insurance, a member of Nationwide Insurance, All Rights Reserved

She was drunk at her Junior High Dance Who gave her the liquor???

As insurance agents, we all know how important it is for our clients to carry sufficient liability coverages. In some cases, it's difficult to explain to clients why they need it, what kinds of claims can occur, and how the liability coverage would kick in. Here is a GREAT example, that a lot of clients don't think about.... liability associated with their children and the choices they make.


Written By:

Laurie Infantino, AFIS, CISC, CIC, ACSR, CISR, CRIS
President of Insurance Community Center




This weekend I had a friend, Amanda, visit for a couple of days. Within hours of arriving she got a call from her daughter’s school saying she (her 15 year old daughter) had to be picked up immediately because she and her friends had been drinking. The drama unfolded with her being picked up, suspended for at least a day and hopefully being an indentured servant at her home for an unlimited time frame. But the question Amanda kept asking in heated tone was “where did you get the liquor”. Finally, after escalating threats, the daughter admitted to getting the liquor from her friend’s parent’s home with whom she was spending the night. Lucky in this case there were not any injuries---no one getting behind a wheel intoxicated—but, it could have happened and what then.

 
As we look at the holiday season and the parties we give and attend (and those our children are attending) we have to revisit our treatment of this issue from our last holiday newsletter which discussed “Social Host Liquor Liability”.



Most of us are aware of business’s legal requirements to stop serving alcohol to people that are visibly intoxicated. This is especially true for those insureds in the business of serving alcohol. What we are not as aware of is the liability we assume by serving liquor in a social setting referred to as “social host” liability.



We cannot have this discussion without broaching the topic of parents who actually provide alcohol to minors in their homes—who become “social hosts” to under aged people. It may be that they do not serve the liquor to the minors but make it available or they allow alcohol to be brought in their home by their children’s friends. Some parents use a thought process that goes something like this: I would rather my child drink at home than attend a party and either drive home drunk or ride with someone who has been drinking. And here is the flaw in that thought process while you think you are providing a safe haven to your child, your friend’s parents may not share your same philosophy and, in fact, you have contributed to the delinquency of a minor. If that child gets hurt or hurts others and you contributed to that harm by providing alcohol, you will be named in the ensuing lawsuit and you may find yourself being held liable.


This brings us to the discussion of “social host” liquor liability. We become a social host whenever we are hosting an event that serves liquor be it a dinner party for another couple or putting on a wedding in our backyard. Examples of “social host” liability could be cases where our guest gets intoxicated and hurts themselves or causes injury to others; or the situation where our guest leaves our party and is involved in an accident as a drunk driver. Or, it could be a guest that leaves your party and is stopped and ticketed for drunk driving. I know you might be thinking “my friend…my brother in law would never sue me”. Surprise!

They will.

State laws differ as relates “social host” liability and not all states recognize social host liability. However there are some guidelines as to when a host serving liquor can be held liable:

-The host did, in fact, provide or serve liquor to the individual in question

-The individual was intoxicated and caused either bodily injury or property damage to a third party

-The host was aware or “should have been aware” that their guest was intoxicated

And now to the question of insurance when you are sued as a result of someone becoming intoxicated in your home and incurring or causing damage be it bodily injury or property damage. The Homeowners Policy? The Umbrella Policy? The answer is a “probably” yes but as always you have to check the policy. While the Homeowner’s Policy may not have a specific liquor exclusion, most policies will have an “expected or intended injury exclusion” that the claims adjuster may or may not want to pursue. Whenever we talk about limits on a policy, these are specifically the type of situations that can take that $300,000 limit trying to respond to a $1,000,000 judgment.



The ISO 2000 edition says the following:

E.1. Expected or Intended Injury “Bodily injury” or “property damage” which is expected or intended by an “insured” even if the resulting “bodily injury” or “property damage”:

a. Is of a different kind, quality or degree than initially expected or intended; or

b. Is sustained by a different person, entity, real or personal property, than initially expected or intended.



Could this exclusion be broad enough to remove coverage for the parents? Perhaps it could. Could you then look to the Personal Umbrella? Better read the form. Some forms have a liquor exclusion that applies when serving liquor to a minor.



Let’s talk for a moment about a business that occasionally or incidentally serves liquor. The Christmas season is the perfect time for this discussion. We go to our hairdressers and they offer us a glass of wine, or eggnog with a little bourbon. The office that decides rather than taking everyone to an expensive restaurant will have pizza and beer brought into the office for the big celebration. Is there coverage on the Commercial General Liability Policy for the liability of the business in these situations? Are these businesses in the “business of serving liquor”? The CGL provides automatic coverage as the exclusion only applies if the named insured is the business of manufacturing, selling, serving or furnishing alcoholic beverages. The result of this language is that a business typically has coverage for these “social” situations involving liquor.

Questions about liquor liability coverage? Or placing liquor liability business? Contact Tague Alliance at (760) 729-1143, or info@taguealliance.com