IRMI Update—Issue #9
An E-mail Newsletter for Risk and
Insurance Professionals
ISSN: 1530-7948
January 23, 2001
In This Issue
Colleague,
Our subscriber poll is confirming that the insurance market is
firming, but it isn't in a crisis mode. As of Friday, about 19 percent
of the respondents indicated they've seen a decrease in rates on
renewals since December 31. Sixty-five percent have seen an increase
of 50 percent or less, while about 15 percent experienced an increase
in excess of 50 percent. I'll share the comments with readers in
the next issue of IRMI Update. [To see the final vote tally, go
to IRMI
Update #10, and to read subscriber comments, refer to the
"Your
View" column of that issue.]
Earlier this month, we passed an important milestone for IRMI.com:
we added the 100th article to the Expert Commentary section! One
of our goals is to assemble a repository of practical and reliable
information you can depend on to help solve your risk management
problems. Thanks to the experts who have contributed these articles,
IRMI.com is fast becoming just that. Our Expert Commentators receive
no monetary compensation, and I encourage you to drop them a note
of thanks when you find their work to be particularly helpful. You'll
find both a postal and e-mail address in their biographies.
Thank you for telling your friends and colleagues about IRMI.com.
We especially appreciate those of you who forward the IRMI Update
newsletter to others with an encouragement to subscribe. Our subscriber
base has been growing steadily, and we appreciate your help!
I hope you enjoy this issue of IRMI Update, and I wish you a
great day.
Jack
Jack P. Gibson
President
IRMI
Get Rid of Obsolete Stock and Equipment!
Sometimes manufacturing plants have some overstock that becomes
obsolete. It gets stored in a warehouse somewhere and is carried
on the balance sheet as an asset. They pay insurance premiums, taxes,
and waste valuable money housing items they will never use or sell.
My recommendation is to either have a "garage sale" and sell
the obsolete items or dispose of them. The extra cost to warehouse
obsolete items plus the chance of having a coinsurance penalty imposed
because of being underinsured is too high. It is better to sell
it at a loss than to continue to pay for things you do not use.
A plastics manufacturer in Dallas had a large warehouse half
filled with obsolete or outdated stock. When we were talking about
contents valuations, the manufacturer had not included these items,
yet an astute adjuster would have included them to determine the
insured value required by the coinsurance provision if there had
been a major loss. The manufacturer had a garage sale and made at
least some of its money back on the product and reduced its warehouse,
taxable inventory, and insurance costs.
This could apply to obsolete equipment as well.
By: Mary Roth, CPCU, HB
Owner
Staff Training Programs
Suggest a Risk Tip.
Future issues of IRMI Update will include more risk tips from our
readers. Send us a practical tip (less than 300 words) for identifying
and managing risks, buying insurance, managing claims, or filling
gaps in insurance coverages. We'll acknowledge your contribution
as we did for Mary.
We add new Expert Commentary to IRMI.com every week. There are
now 102 articles on IRMI.com, and many more are in production. Below
you'll find summaries of some recent additions with links to the
articles.
-
Who
Wants To Be an Insured?—It is common
for businesses to involve multiple corporate, partnership,
and joint venture entities, and there are a number
of subtle nuances that can effect how insurance
coverage applies to these entities. Care must be
taken to identify them and assure that insured status
is properly provided under CGL policies. Learn how
in this insightful article.
-
The
Basics of a Business Interruption Claim—The
principles governing adjustment and adjudication
of a business interruption loss are scattered among
numerous decisions by a variety of courts around
the country. This article examines Dictiomatic v
USF&G, a Florida case that brings together virtually
all of the principles applicable to such claims
and provides a concise primer on these principles.
-
Top
10 Best Employment Practices for the New New Economy—Given
the rapid growth of new new economy companies, HR
issues have tended to take a backseat to other concerns.
This article enumerates the most important employment
practices that these companies should adopt in order
to keep on track.
-
New
Stand-Alone E-Commerce Liability Insurance Policies—This
article provides general observations regarding
the stand-alone e-commerce liability market and
what issues you should consider when reviewing or
placing insurance coverage. Several insurer policy
provisions are compared, such as what constitutes
professional services, coverage for patent infringement,
mandatory binding arbitration provisions, contractual
liability coverage, blanket additional insured endorsements,
and many others.
Additional Insureds
and Completed Operations—Construction contracts sometimes
require additional insured status that will respond to completed
operations claims. Contractors faced with such obligations often
attempt to have additional insured endorsements added to their policies
with older language in the belief that this provides the required
coverage. This article discusses a recent court decision that should
provide reassurance that contractors who do so are complying with
the insurance requirements of their contracts.
Last Chance To
Suggest a Construction Risk Conference Session. If you
wish to propose a workshop or other session for the 21st IRMI Construction
Risk Conference (to be held Oct. 29 to Nov. 1, 2001, in New Orleans)
please send us your submission by February 1.
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