California Commercial Insurance Broker BLOG

California Insurers Battle With DOI over Iran-Linked Investments

timp@arroyoins.com (Timothy Pine) — Fri, 16 Apr 2010 16:44:00 +0000

Last week, five insurance trade groups whose members do business in California filed an official petition asking whether the California Insurance Commissioner Steve Poizner created "illegal underground regulations" concerning Iranian investments. The just of the regulation is this, as of April 1, 2010 California would no longer credit any investment on an insurer's balance sheet in any of 50 companies that were black listed by California insurance commissioner Poizner. These are companies that do business with Iranian energy, nuclear and defense sectors.

The crux of the argument is that this ruling by the commissioner Poizner could set dangerous precedent in the areas of determining jurisdiction "over non-domestic insurers' statutory financial statements, how the list of 50 companies was created, and a few other points of contention.

Here are a few basic fundamentals that need to be stated before I make my point, Insurance is the foundation that has allow American business to thrive, the banking industry to invest in those companies and for America to become the leader in the industrialized world. Another often unknown fact is that many insurers operate at an underwriting loss but make up that difference through the profitability in their investment portfolio. A simple example of this would be California Insurance Company XYZ took in $1 billion in premium dollars but paid out $1.05 Billion in claims and expenses. This would be an unsustainable method to conduct any business, however the insurance industry reinvests their premium dollars and in this case say the company made 10% on its investments. In this very simplified example, California Insurance Company XYZ net profits would be $500 Million for the year.

In the search for profitable investments insurance companies have made some very poor decisions in the last few years. Insurance companies do fail, but this most round of near failures with billions in government intervention was systemic. In the search for profitability we(the insurance industry) can forget our moral compass. Iran is a country that under its current regime wishes to destroy our partners, and inflict terror through state sponsored events through out the middle east(world?). I do not always agree with every agenda that is handed out by the California Insurance Commissioners office, often because is is a launching point for higher office therefore politically motivated, but this particular action is what the industry need to show American that it is capable of self regulation.

My two cents...

Tim Pine
Commercial Insurance Broker
tim@socalinsurancebroker.com
800-401-6764

7.2 California Earthquake may get property owners thinking earthquake insurance

timp@arroyoins.com (Timothy Pine) — Mon, 05 Apr 2010 00:40:00 +0000

Today's 7.2 Earthquake is likely to get California property owners thinking about earthquake insurance coverage for their investments. If you have never sought earthquake coverage for our California property you will likely be surprised by the cost and the structure of the policies. The market for earthquake insurance has been hard for a few years now, what that means to policy owners is that earthquake insurance is expensive. We have not seen a significant earthquake event for a period of time, and in combination with other factors in the reinsurance market this has made for a tight market with very expensive premiums. Not only are premiums high but earthquake insurance policies are structured differently than most insurance coverages.

As Senior mortgage Broker Arnaud Dufour accurately pointed out, less than 10% of California's residential and commercial property is currently protected by some form of earthquake insurance coverage.

An example of how most earthquake insurance are structured is as follows, we'll use a $1,000,000 California property. The policy would be structured with a TIV(Total Insured Value) and a high deductible, usually 10% or higher. So in this example the property would have to experience a loss in excess of $100,000 before the earthquake policy would respond. Another surprise for many commercial and multifamily property owners when they seek earthquake coverage is the carriers that offer earthquake insurance coverage, you will not see many names you are familiar with as this is a specialized market.

Biggest Earthquakes in California in the last 30 years.

So where did yesterday's quake rank in recent California quake history (measured by magnitude)?

7.3 - Landers 6/28/92
7.2 - Cape Mendocino 4/25/92
7.2 (estimate) Southeast of Mexicali, Mexico 4/4/10
7.2 Off the coast of Northern California 6/14/05
7.1 Hector Mine 10/16/99
7.0 Honeydew 8/17/91
6.9 Loma Prieta, 10/18/89
6.7 Northridge 1/17/94
6.6 San Simeon 12/22/03
6.6 Off the coast of Northern California 6/16/05
6.5 Off the coast near Eureka 1/9/10
6.2 Joshua Tree 4/23/92
6.0 Central California 9/28/04
5.9 Humbolt County 2/4/10
5.6 Sierra Madre 6/28/91
5.6 San Francisco Bay Area 10/30/07

The earthquake on 4/4/2010 was one of the biggest earthquakes in the last 30 years and we were lucky the energy went northwest of Mexicali toward a less populated area.
Dare to Prepare

Do you know the seven steps to earthquake safety?

1. Secure it now!
2. Make a Plan.
3. Make disaster kits.
4. Is your place safe?
5. Drop, Cover, and Hold on!
6. Check it out!
7. Communicate and Recover!

You can find more information on each of these steps at www.daretoprepare.org.

Remember, it is never too soon to be prepared or to buy Earthquake coverage for your California property.

To avoid the pit falls in this specialized insurance market you should seek the advice of a California based commercial insurance broker who can guide you through the process. You can also contact me anytime with questions about earthquake coverage at:

Tim Pine
Arroyo Insurance Services
timp@socalinsurancebroker.com
(949) 340-9662

Zenith Insurance (Workers Compensation Carrier) Get a new Owner -

timp@arroyoins.com (Timothy Pine) — Thu, 18 Feb 2010 18:10:00 +0000

The breaking news for California business owners this morning is Zenith National Insurance Corp. was acquired by Fairfax Financial Holding Limited. The key note for California business owners insured with Zenith would be, "How will this acquisition affect my workers compensation insurance premiums?". Let's start by looking at how Fairfax valued Zenith, one of the leaders in the California workers compensation insurance market. Fairfax paid a 31.4% premium to acquire Zenith, this means that Fairfax paid a huge premium to acquire Zenith.

Looking at this acquisition form the outside and as a commercial insurance broker I would say that policy holders are very safe to assume that Zenith will continue on the path of provide excellent pricing for California workers compensation for the class codes that fall within their appetite. I would see this more as a validation for The Zenith, that they are out performing many in the market and the future looks extremely strong or both the company and their clients.

If you would like us to provide you with a no obligation workers compensation insurance review for your California workers compensation policy we would be glad to help. You can contact us with our online workers compensation quote form for an immediate response.

Business Insurance and the Recession: Helping California Business Survive

timp@arroyoins.com (Timothy Pine) — Tue, 22 Dec 2009 22:47:00 +0000

Without a doubt the current economy has significantly affected most sectors of the economy from restaurants to manufacturing even California's technology and financial services, every sector has felt the impact of the past few years. As consumer's disposable income has become scarce, the first impact is seen at the retail level which then trickles into the wider economy effect a wide variety of business sectors.

From a commercial insurance stance many businesses are looking to cut cost, in what the industry calls a "soft market", which means rates have bottomed out for most commercial insurance lines. As a commercial insurance broker with access to over 35 markets we may be able to find a better home for your coverage, however this is not the only aspect where a policy can be reviewed coverages altered, reduced, or even eliminated.

As a commercial insurance expert and conduit for these struggling business owners, it is our job to truly review coverage and help reduce insurance expenses. The following are some of the ways that we help our clients reduce risk, reduce premium cost and maximize their coverage:

• Help identify loss control areas to mitigate risk
- The worse thing for a struggling business is to have a claim take place that could be prevented. Your insurance broker is another line of defense game of preventing claims before they occur.

• Review existing current insurance protection. What coverages are necessary for their business?
- It is possible to be over insured, or on the wrong insurance policy or with the wrong carrier and only by reviewing your commercial insurance at least annually can you determine if you are properly positioned.

• What insurance coverages are perhaps non-essential that can be dropped?

• Obtain the best value insurance policy for the lowest cost
- How many markets does your broker have direct access to? Does he understand your business? These are very important factors in determining whether or not your company is being properly presented to the insurance companies.

• Prepare clients for increased loss exposures in areas affected by the recession, such as EPLI, crime and workers’ comp
- EPLI or Employment Practice Liability Insurance and worker's compensation insurance both see increased claims during time of financial insecurity. Employees trend towards filing claims against current and former employers when the prospects of finding a new position are uncertain.

• Discuss premium financing options and help them find it
- Most brokers have options for financing if it is not offered by the carrier.

• Give clients options – obtain comparative quotes – and explain choices, such as lower premiums for less coverage, carrier stability, etc.

My clients count on me to be an insurance consultant. My goal is to help a client in need in these tough times, and when business conditions improve we can both prosper.

How are Employment Practices Liability Insurance rates impacted by recession?

timp@arroyoins.com (Timothy Pine) — Fri, 20 Nov 2009 15:54:00 +0000

Employment practices liability insurance (EPLI) is an insurance product that provides protection to employers against claims made by employees. The coverage generally includes cases based on wrongful termination of employment; discrimination based on sex, race, age, disability, etc.; sexual harassment; emotional distress, and other similar types of claims. The current recession has created an increased demand in employer practices liability insurance driving up rates.

The recession officially started in December of 2007, but there were severe economic problems at least a year prior to that time. According to statistics by the Equal Employment Opportunities Commission (EEOC), the number of discrimination claims rose in 2008 by 15 percent as compared to 2007. The trend is generally seen as employees lashing out at former employers as a tight job market prevents them from getting alternate employment in a timely manner.

Because of the large number of layoffs and cuts in salary, many employees and former employees become disgruntled and seek legal remedy. In many cases, cuts were made very suddenly because of the sudden collapse of financial and other markets. According to estimates by the EEOC, the number of discrimination claims is expected to rise sharply again in 2009.

The large increase in claims is believed responsible for the rise in employers that are purchasing EPLI policies. Many California businesses have not realized they can protect themselves from lawsuits arising out of wrongful termination claims by purchasing an EPLI policy. The minimum premium for EPL coverage starts at $1,000 and with the average Employment practices liability claim running in excess of $250,000 this coverage seems like an easy way for California businesses to protect themselves.

Furthermore, there are many federal, state and local laws that employees or former employees are using to file suit against employers. The Worker Adjustment Retraining and Notification (WARN) Act is an example of legislation that is currently used in claims against employers. The law requires employers to provide warning to employees before layoffs, and large employers are required to provide two months worth of salary and benefits.

In order to have the broadest possible coverage against such types of claims in an environment of layoffs and pay cuts, employers have been turning to employer practices liability insurance. However, many carriers have been reporting losses are they are increasing costs in order to protect themselves in an increasingly litigious employer liability environment. Although some reports indicate that the overall economic recession may be ending, the jobs recession may last much longer supporting the demand for EPLI coverage and the upward pressure on rates for this type of insurance. Employment Practices liability insurance quotes can be obtained online and if you work with a great insurance broker, ahem, like myself you will get a competitive analysis of market.

Northern California Office in San Francisco

timp@arroyoins.com (Timothy Pine) — Fri, 06 Nov 2009 15:41:00 +0000

As a commercial insurance broker I have been given a great opportunity to open two offices in California with the newest in San Francisco. Originally based in Orange County, CA I will still maintain an office near John Wayne Airport. Currently my family and I are living in Sonoma and San Francisco is a quick hour commute away. Having never felt like an hour or two of driving was a very big deal I have established relationships from Sacramento to San Jose as geography is only an obstacle if you allow it to be. The commercial insurance field has allowed me a considerable amount of flexibility and I am extremely fortunate that I now have the opportunity to see more of my clients in person.

If you need help with any of the follow please do not hesitate to contact me:

Professional Liability Insurance (E&)
Directors and Officers Insurance (D&O)
Employment Practice Liability Insurance (EPLI)
General Liability, Workers compensation, Business auto

My newest commercial insurance office is located at 315 Montgomery Street
San Francisco, CA 94104.

Foreclosure Trustee Professional Liability Program

timp@arroyoins.com (Timothy Pine) — Tue, 20 Oct 2009 04:05:00 +0000

Professional Liability Insurance coverage (e&o) is often a misunderstood insurance coverage, especially in niche industries. Take for example the professional liability insurance options in the financial sector and in particular foreclosure process. Unless you have extensive knowledge of the financial industry, how foreclosures are processed and who most of the liability lies with in these transaction you probably would not have any idea what a foreclosure trustee is or where they have liabilty exposures.

I have been working with foreclosure trustees for quite some time and our agency Arroyo Insurance Services has been selected as the affinity Partner of the United Trustee Association. We have special access to a program that provides extended coverages, reduced premiums and higher limits that anything else available in the marketplace.

If you are interested in receiving a quote feel free to contact me at (800) 401-6764 or at tim@socalinsurancebroker.com

Examples of Employment Practices Liability Claims (EPLI Claims)

timp@arroyoins.com (Timothy Pine) — Mon, 24 Aug 2009 16:38:00 +0000

Employment Practices Liability Insurance (EPLI) provides coverage for a business from claims that arise from a worker (or certain 3rd parties) when it has been alleged that their legal rights as an employees have been violated. What are these legal rights? Here are a few: sexual harassment, discrimination, wrongful termination, wrongful discipline, breach of an employment contract, negligent evaluation, failure to promote/employ, and derivation of career opportunity. EPLI is a coverage that provide an opportunity for a business owner to insurance against many for the risks inherent in running a business. Employment practices liability coverage is extremely specialized coverage and the forms vary by carrier, you should consult with a professional commercial insurance broker to determine the difference between carriers.

The next question I get is which commercial insurance acrriers offer EPLI coverage?

Here are a few: Admiral, Beazley-USA, Carolina Casualty, Chubb, Great American, Houston Casualty, Philadelphia, Travelers, CNA, Illinois Union, Ironshore, Lloyd's of London, Markel, Navigators, North River, OneBeacon, Zurich and Golden Eagle.

What are some EPLI Claims Scenarios?

Sexual Harassment

A male janitor served his employer with a lawsuit claiming sexual harassment. The claimant alleges that a male manager for the company would regular touch is chest and stomach while uttering sexually suggestive comments. He further alleged that his employer failed to act when notified of these allegations. The employer eventually investigated the claim and fired the manager. This matter cost the janitorial firm over $300,000 to settle.

For an EPLI Quote please refer to our online submission form and we will contact you to follow up.

More EPLI claims scenarios available here: SocalInsuranceBroker.com/EPLI/Claims.asp

EPL in today's market

timp@arroyoins.com (Timothy Pine) — Tue, 04 Aug 2009 15:30:00 +0000

The Economy’s Impact on Employment Practices Liability Insurance

The nation’s economy is going through a dynamic shifting. This shifting is creating many shifts and slides in the way business is operated in corporate America and there is an increased need for Employment Practices Liability Insurance. Because the recent change in the economy has temporarily dampened the hopes of some Americans, law suites have been on the rise. Disgruntled employees who have experienced layoffs or the threats of layoffs have fought back by filing an increasing amount of lawsuits against their employers.

Most of these lawsuits have been filed against larger corporations. However, all companies lie at risk of experiencing an increased number of lawsuits. These lawsuits can include false allegations and one sided views of employees that feel that they should not have been layed off while others with less seniority were not. These lawsuits may at face value appear to be invalid but they may be able to open a can of legal worms that could destroy the business financially. Law suites also attempt to destroy the businesses reputation in the community. These lawsuits can be handled easily with EPL insurance.

It is estimated that as much as three out of five businesses will be sued by current or former employees. EPL insurance is needed as soon as businesses start hiring employees. Investors and directors are insisting that EPL insurance be a part of the company’s mainstream coverage. Directors and officers, investors, and business owner can each be held accountable or liable in law suites claiming that employee’s rights were violated. Employment Practices Liability Insurance protects and covers the business and the business owners from claims submitted by employees or ex-employees who are claiming that their rights were violated. This fairly new form of liability insurance is quickly being seen by business partners and investing partners as a crucial coverage for every business both large and small.

The vulnerability to such claims and lawsuits begins at the hiring process. Pre-screening tests may be deemed prejudice, biased or unfair. Extra caution must be taken during this economic shift to insure that all pre-screening and hiring procedures are not by the book. Proper accountability must be enforced as there are so many desperately seeking job opportunities. Even if a claim is proven to be fraudulent it can be costly in both time and money.

Newer firms may be at more of a risk than older firms. To avoid these unwanted law suites create a hiring, firing and discipline procedure that is approved by your lawyer before hiring anyone. The most important safety factor in today’s worry frayed economy is to purchase Employment Practices Liability Insurance. EPL insurance is an important safety factor in today’s economy.

Does California's workers' compensation fraud go up when the economy goes down?

timp@arroyoins.com (Timothy Pine) — Wed, 08 Jul 2009 00:01:00 +0000

Does workers' compensation fraud go up when the economy goes down?

According to the National Insurance Crime Bureau (NCIB) there is a strong link. In April 2009, the NCIB issued a press release stating that the number of suspected fraudulent workers' compensation claims is up 71%.

What can employers do to help protect their businesses?

To help minimize the financial impact of fraud, experienced insurance companies have established anti-fraud programs as part of their claim management process. These programs are most effective when employers actively work with their commercial insurance broker and carriers to identify potential fraud or abuse in their workplace.

What should employers look for?

The red flags, some of which are listed below, help identify activities that have historically proven to be indicators of fraud. If one or more of these indicators is present when an injury is reported, employers should notify their insurance carrier so they can investigate the validity of the claim.

• If an accident or injury occurs late on a Friday afternoon (especially if not reported until Monday) or early on a Monday morning.
• If the accident or injury lacks witnesses, or occurred in an area not frequented by the employee.
• If the injured worker is unusually familiar with the workers' compensation system or terminology.
• If the injured worker is retiring, on probation, involved in a labor dispute, disgruntled, a poor job performer or subject to disciplinary action.
• If the injury complaints are inconsistent with the facts of the accident. • If the injured worker was experiencing financial difficulties prior to submission of a claim and inquiries about a quick claim settlement.
• If the injured worker refuses medical tests or examinations to confirm an injury.
• If the injured worker stays out of work longer than the doctor prescribed.
• If the injured worker protests excessively about a modified position or returning to work and never seems to improve.

The Case for placing Commercial Insurance Coverage with the same carrier

timp@arroyoins.com (Timothy Pine) — Wed, 24 Jun 2009 18:46:00 +0000

Frequently as a commercial insurance broker, we are looking for solid coverage while also looking to obtain the best pricing for our clients but sometimes their is a hidden benefit that it over looked or undervalued. The often quoted and rarely understood "dovetailing" of policies is a very important factor and should not be overlooked when evalutaing an insurance program. Dovetailing is the practice of obtaining insurance policies that have overlapping areas of coverage from the same carrier to prevent coverage issues should a claim arise.

Example: Web 2.0 Company provides software as a service and sells its software to doctors officers around the country. As the spokesman and CEO, Mr. Saas often speaks with large medical groups about the effectiveness of his product and how it will save their organizations time, money and revolutionize their back office. Web 2.0 Company sells their software to BIG Physicaians Group who pays $1 million in impliemntation fees and $1 million a year for licesening after hearing Mr. Saas speak at a physicians conference. They so believe in his statements and that the software will do what he says that they want it up and running ASAP. Big Physicaians Group installs the software and then it sits for a year. They later determine that the software is not capable of handling their needs, a professional liability claims(E&O) and in addition that they were mislead by Mr. Saas at the conference. A suit is filed alledging the software was purchased by Big Physician Gorup that failed to handle the needs of the client and caused major damage to their existing infrastucture and in addition that Mr. Saas was personally liability for the misleading statements. In this scenario we have two seperate policies being triggered, the professional liability policy would respond to the claim that the software did not perform as it was intended too perform and the major damage to Big Physicians Groups infrastruture. The insureds Director's and officers insurance would respond to personally defend Mr. Saas who was named personally for providing misleading statements about the product.

If these two insurance coverage are placed with different carriers they may have difference on which policy responses, how much limit is available, and even whether they are responsible to defend. If you place the coverage with the same carrier they become dovetailed making sure that any areas of overlapping coverage would fall under the responsibility of the same carrier making these points of contention for the insurance carrier moot.

If you would liek to further discuss the merits of dovetailing coverages, D&O or E&O insurance quotes please contact me, or for a quote you can visit us here.

What is EPL or Employment Practices Liability Insurance Coverage?

timp@arroyoins.com (Timothy Pine) — Wed, 24 Jun 2009 18:45:00 +0000

EPL, sometimes referred to as EPLI, stands for employment practice liability insurance and covers an insured from litigation or action arising out of claims like age discrimination, sexual orientation discrimnation, wrongful termination and racial discrimination. Though this coverage seems straight forward many companies mis this critical piece in their insurance program because many producers do not understand the coverage and theirfore do not offer it to their clients. This is the fastest growing area of litigation and it is growing with the current economic downturn. With cycles of unemployement reaching beyond the six month mark for many industries unemployed workers are seeking out their former employers to cover their expenses. These claims usually come in the form or some type of wrongful termination or in the form of a workers compensation claim. In the case of the first example coverage under the employment practices liability insurance coverage, the average settlement has risen to over $200,000 and has shown a steady increase ove rthe past few years. Even a small case can easily cost $25,000 as in the following example. A small franchisee of a national chain had an employee who was often late, had a bad attitude on the job and was developing an increasingly unsightly appeareance. The employee showed up late to work and the employer terminated the employee on site. A number of missteps lead to the eventual action, the employee hired and attorney and filed a wrongful termination against the employer. The employee had been using drug and claim the employer wrongfully terminated her without warning. This seemingly clear cut case of personal irresponsibility cost the employeer $6,000 in defense cost and an additional $20,000 in an award that was settled out of court. Employement practices liability coverage would have cost him approximately $1,500 in annual premium.

Employment practices liability insurance coverage is often brought up by a litigator once and action has been filed against and insured, this coverage has a simple application and obtaining EPLI quote can be started online contact us by phone or email.

How current economic conditions are changing the Directors and Officers Insurance Market

timp@arroyoins.com (Timothy Pine) — Wed, 24 Jun 2009 18:33:00 +0000

Directors and officers insurance coverage (AKA D&O) has become a critical insurance component of any organizations risk management strategy, who else but an organizations board would demand coverage to protect their own personal assets from being involved in a settlement. Directors and Officers insurance coverage is put into place to protect the named officers of a company as their protection lies outside of the defined coverage found in other policies such as a commercial general liability policy or a professional liability policy. Since the the financial fallout of 2008 and the current economic downturn, the insurance market for directors and officer for organization that need it most has become increasing tight and is getting more expensive. The financial industry has been hit very hard by litigation from collapsed mortgage companies, insurance companies and financial institutions. Obtaining directors and officers coverage for these institutions has become increasingly difficult and occasionally must be obtain in the surplus lines market.

Sarbanes Oxley legislation has made the Dissectors and Officers insurance market place for publicly traded companies an increasingly expensive proposition. As companies go public to raise capital the risk of litigation from their shareholders increases as the number of shareholders increases. Class action law suit, suits arising out of failed mergers and a general beating in the market can all be cause for suits to be filed against C-Level officers and a companies board. It is no longer a policy of option for publicly traded companies as directors and officers coverage was once seen as protection from a rare omission or poor decision. D&O has become a mandatory coverage for publicly traded companies as the above examples are seen as fairly common occurrences.

Other industries have been hit hard by the current economic conditions as well, for example, any organization that deals with franchising understands just how painful a downturn can be to the bottom line, but even worse when franchisees start to fail they turn to the franchisor for compensation. These suits come in the form of actions against the franchisors professional liability coverage and their directors and officers.

Directors and officers or D&O can often be packaged with Employment practices liability insurance and fiduciary liability coverage which can make the package as a whole not only more affordable but it can fill in gaps that would other wise be present should the coverages be purchased from multiple carriers. Obtaining quotes for directors and officers insurance coverage is a fairly straight forward process and can be initiated with an online application by clicking here.

California Earthquake Coverage (EQSL) now in the minds of property owners

timp@arroyoins.com (Timothy Pine) — Tue, 19 May 2009 16:07:00 +0000

Sunday's 4.7 (or 5.0) earthquake in Southern California is yet another reminder that “the big one” could happen any time. Fortunately for all, this event was centered about 8 miles below the surface of the earth so there was little damage to buildings and structures at surface level.

Most Californians don’t take the threat of a major earthquake seriously. In fact, only 12% of California building owners, commercial and residential, have earthquake insurance. Now is a good time to evaluate earthquake insurance coverage which is excluded in the standard personal and commercial property policies and that earthquake insurance coverage can be purchased separately. The Earthquake market has experience a "hardening" as of late but you can be sure that the preium for this coverage does not even come close to the costs associated with a major quake. For a quote on your California property coverage contact us at 800-401-6764 or online with our online quote form.

Tim Pine

California Insurance Trend for 2009 - April Update

timp@arroyoins.com (Timothy Pine) — Mon, 06 Apr 2009 17:16:00 +0000

Many California business owners have forgot that the price of commercial insurance has fallen steadily for the past 5 years, as we call it in the insurance industry a "Soft Market", and rightfully so as many business are struggling to survive. As a commercial insurance broker I feel fortunate that the economic cycle and the soft market insurance cycle have worked together the past few years, giving businesses a fighting chance at surviving these economic conditions with out facing increasing insurance expenses. As a commercial broker though I am all to aware that this trend is just that, a trend and it will come to end and rates will increase. As reported by Advisen rates are predicted to level off by the end of June, 2009 and begin increasing by late '09 and through 2010.

Their are many factors that contribute to the pricing of insurance in the marketplace including but not limited to insurance company returns(no comment necessary), capacity of the market, demand for insurance to name a few. We have already seen the hard market set in when concerned with certain products such as DIC (Earthquake and Flood Coverage) which is seeing 15%-30% increase, workers compensation is expected to increase 20%, and most other renewals have slowed their decline or leveled off. One large effect seen in keep insurance premiums low is the fact that many businesses have a reduced exposure(Payroll, Gross Profit, etc.) which is keeping premium's down and will mitigate any increases if they are taking place.

California Business owners also have to worry about climbing workers compensation insurance rates in 2009 and beyond as health care rates show no signs of slowing. These health care expenses place increased pressure on the workers compensation system as claims increase in costs.

So what is a California business to do about the impending commercial insurance "Hard Market"? If your commercial insurance policies are a significant expense to your business, you do have some choice with your broker to minimize the impact the "Hard Market" will have on your business. These tactics include negotiating long term rate locks, determining the best long term home for your business (which company will likely keep competitive rates), evaluating gaps in coverage, and determining you have the correct policies in place. Industries like the construction and finance are being affected by the current trends in their respective sections and are likely to take are increases in the coming cycle. Many speciality coverages that will not be always be affordable or available can be purchase will minimal expense and they include, Director's and Officer's coverage, EPLI, E&O, etc. Your independent commercial insurance broker is a partner in your business and should be there to help you through this "cycle" and position you to take advantage of the next one.

Tim Pine
Commercial Insurance Broker
Arroyo Insurance Service
(800) 401-6764

Reduce Insurance Expenses without cuting coverage

timp@arroyoins.com (Timothy Pine) — Mon, 23 Mar 2009 03:49:00 +0000

Location: Orange County, CA

Company: Hi-tech Manufacture

Revenue: $25 Million

Employees: 37

Locations: 1

Sales: US, Canada, Asia, Europe and Africa

This is a synopsis of a recent California Manufacturing client we helped reduce their insurance costs and greatly improve the coverage on their commercial insurance package. They had been with their previous commercial insurance broker for about 5 years and wanted to know if we could help them with their commercial insurance. We evaluated their current policy and exposed a number of issues, the primary one being they were ineligible for the Business Owner Policy they had been on for the past 5 years. The business owner policy that they had was limited to companies with revenue of $15 million or less which they had long ago surpassed. Just two years ago they had revenues of $63 million so they had out grown this policy, which had its limits to begin with, and now this policy was not anything close to what hey truly needed as a mid-market company. By not correctly reporting a clients income year after year this broker has established a trend of unethical behavior and perhaps opened the client up to a material misrepresentation or breach or contract. They could be denied coverage if a claim were to occur.

We structured a comprehensive insurance program for the insured with Chubb and actually reduced their costs from their previous policy while broadening their coverage in a program they could grow into up to revenues of $50 million. The previous insurer was a great A rated insurance company but once we correctly reported the clients business personal property, sales, and insurance coverage needs they were no longer competitive. The new policy program covered their products and completed operations for world wide sales and provided coverage for their true exposures and provided a business income coverage.

Summary:

The main outcome from this case was a program that provided the correct coverage and did not contain any material misrepresentations which could cause claims to be denied. The net saving on the commercial insurance package was also realized and it ended up being about 10%, however we found Ocean Marine and Inland Transit coverage that was 40% less than what was being offered by the incumbent insurance carrier.

Arroyo Insurance Services provides Insurance coverage for Apartment Owners

timp@arroyoins.com (Timothy Pine) — Thu, 12 Mar 2009 16:46:00 +0000

Apartment Association of Orange County Article in April 2009 Magazine

Established in 1986, Arroyo Insurance Services, Inc. has earned a reputation for excellence in customer service, professional staff and unparalleled direct access to markets that write insurance policies for multifamily, apartment complexes and commercial real estate. Arroyo writes more than $120,000,000 in property and casualty premium and has access to 30+ a rated carriers. In the Orange County area, Arroyo Insurance Services broker Tim Pine has taken a proactive role in understanding and protecting the assets of property owners. Our approach to providing insurance is much more than simply providing quick quotes and offering an unmatched selection of insurance products, we also work with our clients on their long term goals, helping to reduce potential risks and offer suggestion to lower premiums and gain additional discounts. At Arroyo, we work with our clients to perform policy reviews that can uncover numerous areas where discounts can be applied, coverage gaps are present, or an opportunity to move policies to insurance company that has a better product for the client’s needs is uncovered. Our clients become partners in the process and we work together to determine the right insurance company and coverage. With a proactive risk management program, designed to reduce on site risks and avoid potential cost increases at renewal time, we continually strive to be more than just insurance brokers.

As Independent insurance brokers we work for our clients and with the unparalleled selection of insurance providers available to “shop” for the best possible pricing with the appropriate coverages. Many time this process can include a narrative about your experience, the quality of your tenants and other details that help the insurance companies see you as more than just an address and square feet. As an owner you can use the expertise at our agency to give you “no obligation” review of your policy, providing you with the peace of mind that only an independent policy review can provide.

We look at various elements that may not be included in your yearly renewal such as local code and ordinance changes, upgrades and improvement you have made to the property, green upgrades that are not covered under most policies. LEED’s certified building and apartment complexes that are incorporating green technology have special insurance requirements which are often neglected by most insurance companies. With the recent initiatives and rebates for apartment owners to “go green” it is important to understand how these new upgrades can increase your rebuild costs and the value of your property. The green building movement is just one of the areas that apartment owners should consider when evaluating insurance programs.

Owner’s have also approached us to help mitigate risk on coverage’s that may not have been part of their prior insurance programs. For instance, many owners have found that they have significant risk for tenant discrimination and employers practices liability which they were not covered for on their existing policy. We look at not only the properties that are involved but your entire business to provide a program that is right for you.

Whether you are seeking workers compensation, employers liability coverage, property insurance or tenant discrimination coverage we are here to help. Arroyo Insurance Services works with California Insurance Group(CIG), Travelers, Allied and Mercury Insurance to find the best home for your property. Please contact your AAOC member Tim Pine at (949) 340-9662 or by email at timp@arroyoins.com to set up your consultation.

How do I insure my California Commercial Property if it is Vacant?

timp@arroyoins.com (Timothy Pine) — Sat, 21 Feb 2009 16:51:00 +0000

In recent conversation with a commercial property investment client of mine got me thinking about vacant property during these time of decreasing occupancy rates. As a commercial property investor in California, the property owner or the insured is well aware of the hazards that owning property can bring and some of the reasons he carries a commercial insurance policy to protect his investment. That being said, the insured owns a building with 50% occupancy in a downtown area of a metropolitan area. He has had issues with squatters and recently ask if by locking off the second second floor of his commercial building could help him avoid the minimum occupancy clause in his insurance policy. This conversation got me thinking about the other forms of hazard that exist around vacant building and how that would affect both the insured's property and coverages.

It may help to describe a few types of commercial property and then to look at the risks that are present within each type of commercial property and where commercial property coverage would respond. Multifamily/apartment complexes define an property risk that has a very unique set of hazards and will be covered in greater detail in a future blog. Commercial real estate can be divided up into warehouses, industrial, mixed use, office \buildings and complexes, HOA and condo associations, Hotel and motels, Bio-Tech / Med
Data Center, Industrial/Warehouse, Land, Mixed Use, Multi-Family/Investment, Office, R&D, Office/Retail, Retail, as well as vacant buildings. Property management companies also retain much of the responsibility for maintaining various types of commercial real estate and also must be proactive in managing the hazards associated with vacant property. If you are a property owner or manager that needs a property liability and fire quote for your vacant building let us know, we have access to admitted and not admitted markets that accept vacant buildings.

Vacant properties present interesting challenges because they lack the everyday activity that naturally reduces or mitigates many common hazards. One example would be in a cold environment, reducing or turning off the heat to a building leaves pipes subject to freezing and bursting. Draining the internal sprinkler system leaves the building vulnerable to even the smallest fires. Often in California vacant building experience a much greater degree of vandalism and incidents of fire. Even beyond the property hazards, completely vacant buildings can become a liability hazard to the public and local government by creating an attractive nuisance. If a criminal act occurs on the premises the property own could be pulled into litigation due to the negligence of failing to maintain a secure property.

If you find yourself with a vacant property you can due a number of things to mitigate the risk of this undesirable situation. An added benefit of these steps is that they show a potential buyer or tenant that the building owner has good risk management practices in place and takes care of the property.

Action to take on the exterior of your facility:

Building owners and property managers should arrange to have property inspections on a weekly basis. If their is any evidence of forced entry contact the authorities immediately. Remove all excess materials and combustibles from around the building. Trim and maintain vegetation to prevent overgrowth that provided hiding places for those wishing to break into the building. When overgrowth is present it is an indication that the property is not monitored. Remove any containers that might be attractive for dumping trash or hazard waste such as motor oil or chemicals. Check the roof for plant material, vegetation growth, clogged drains, or signs of vandalism. Block parking lot entrances to prevent vehicles and pedestrians from entering the property. Maintain exterior lighting to deter crime and vandalism. Hire a guard service to conduct daily drive by and building observations, especially during the evening and early morning hours.

Building Interior action items for vacant property:

Building owners and property managers should notify local authorities, including police and fire departments, when a building becomes vacant. Take precautions to avoid hazards that could injure people who access the building, such as firefighters, police, security, property management, and even trespassers. Hazards include unprotected floor openings, self-locking doors that could trap individuals , and storage of combustibles, flammable liquids, or materials that could collapse on emergency personnel. Ensure that emergency lighting and emergency exit signs remain powered. Maintain pest control services.

Building system maintenance issues for vacant buildings:

Building owners and managers should continue electric and gas services for alarm and heating purposes. Shut off water in any areas of the facility where it will not be needed. Properly shut down any non-building related equipment or systems and disconnect gas services to the greatest extent possible. For areas protected by a wet pipe sprinkler system, maintain adequate heat to prevent freezing of sprinkler pipes. Protect all exterior openings, including any roof access, with an activated UL listed central station alarm system.

If you have any questions please do not hestitate to contact me:

Tim Pine

tim@socalinsurancebroker.com

SoCalIsuranceBroker.com

Arroyo Insurance Services

CA Apartment Owners Insurance Declined in '08

timp@arroyoins.com (Timothy Pine) — Mon, 09 Feb 2009 17:21:00 +0000

Everything we have seen here in apartment owners insurance marketplace in 2008 told us that the rates for 2008 decreased now we have some data to back it up. The NMHC annual apartment risk survey came out and stated that on average apartment owners paid approximately 17% less in premiums than they did the years before. So the decreases in this marketplace were similar to what we saw in lessor's risk coverage and commercial property as a whole which decreased from 10-25 %. Premiums for this class also decreased for general liability coverage an average of 10% to about $28 per unit in 2008.

The insurance, and more importantly the reinsurance market, trend for 2009 is still up in the air but most analysis, and myself, agree that the market will stabilize and potentially begin to set into a hard market cycle. Carriers have been loosening their underwriting criteria for Apartment complex coverages for the past 3+ years, allowing older units, pools, etc., where they would once be excluded from these programs. This is an excellent time for owners to get into a program that they are not likely to be able to gain entry into when the insurance market hardens. Get an apartment owners insurance quote from us and we will compare top insurance companies writing apartment complex risk in California.

We help owner's to determine if they are getting the best possible coverage for the best possible pricing, get out of poor customer service agencies and provide risk assessments of their properties.

Tim Pine
Arroyo Insurance Services
Orange – Los Angeles – Inland Empire

(714) 984-4023 Cell
(949) 340-9664 Direct

Is your Insurance Broker working for you or against you?

timp@arroyoins.com (Timothy Pine) — Mon, 26 Jan 2009 18:22:00 +0000

California businesses have many challenges facing them in the coming year when it comes to their commercial insurance, but I wanted to pose this question: Is your commercial insurance broker working for or against you?

In the current climate seeing insurance brokers visit their clients once a year, usually to deliver their renewal 2 days before the renewal date, is mind blowing. In California, commercial insurance brokers are compensated by the companies we write the policies for but are required to work in our clients best interests. Some of the things I have seen recently are renewals being submitted with out update revenue figures, business plan reviews, employee updates, and the list goes on. It is impossible to provide an accurate quote for you client with out doing a complete business analysis, this is especially important considering the current business environment in California. Payrolls are changing, head count is decreasing for some and many businesses are changing their business plan altogether. If you find that your broker is not scheduling quarterly visits or meetings to help make sure you are well positioned, if your broker is not working with you three months before your policy renewals, if you insurance broker is not fully aware of you entire business plan and able to sell your company to the insurance carriers - your broker may be working against you.

Being a California commercial insurance broker, and understanding that the previously mentioned agents are out there, I have constructed a plan that makes sure my clients know I am working in their best interests. My plan builds trust, credibility and helps my clients obtain the best possible coverage while they can also be certain that we have shopped all the available insurance carriers for their particular business.

- Initial meeting - We meet with our clients and do a comprehensive review of their existing coverages from their general liability, workers compensation, professional liability and any other applicable coverages.

- Obtain Loss runs and account history - This step allows us to begin working on behalf of our customers.

- Approach applicable markets - This is where Arroyo's market access and our unique ability to forge working relationships with our underwriters helps our clients obtain the best pricing.

- Client review meeting - At this point we have been communicating our options with the client at every step and we can now begin to look at the companies that want to write their business. We compare coverages and make an informed decision about which carrier and what coverages we move forward with.

- Bind policies and Schedule reviews - At this stage our clients have seen our customer service level and we can begin to discuss additional services that our clients have access to without fees.

If you are a California based business, or head quartered in California and you are looking for an commercial insurance broker that works with you and not against you please give me a call.

Tim Pine
Arroyo Insurance Services
Orange – Los Angeles – Inland Empire

(714) 984-4023 Cell
(949) 340-9664 Direct
(949) 340-9663 Fax

California Start ups seek Business Insurance

timp@arroyoins.com (Timothy Pine) — Sat, 17 Jan 2009 18:53:00 +0000

Being a commercial insurance broker in California can be a rewarding career but in this economic environment it can be especially rewarding. I know this might sound like misplaced optimism or a sick sense humor but it's not. Most businesses in California are experiencing reduced payroll and declining revenue I am finding a good number of people who find this the ideal environment to start new ventures. Some of the businesses I have been working with the past few months are designed to exceed with the market conditions that we are facing and others are just good entrepreneurs finding niches that they can succeed in.

One such business is a foreclosure trustee organization that was born out of the collapse of Land America. We obtained General liability BOP, D&O, Professional Liability, California workers compensation, a fiduciary policy and a few ancillary mono-line policies. The business is operating in Orange County and had projected revenue of $1 million for 2009 and after the first month of operation it appears that this is a conservative estimate. They have shared with me first month revenues in excess of $300,000, which is exceptional for a startup.

Another client that we obtained coverage for is handling REO Property management and the founders are entrepreneurial individuals in the Inland Empire of Southern California who have experience in facility management and banking relations. They needed to put into place a general liability policy as well as a professional liability policy to begin procuring contracts. These are two examples that are obviously skewed towards the environment we are in but they are only one segment of growth I am seeing.

This week we were working on a workers compensation case for a client who had never hired employees as his business was always small enough that he handled all of his own equipment rental business. He was hired onto a production taking place in Hollywood and is providing the equipment as well as the professional staff to man the equipment. He was ecstatic with his growth and the potential for 2009.

You can see that although the general mood in the California business environment is very cautious their is still s silver lining out there and we have reasons to be optimistic.

California Businesses Should I shop my workers compensation policy?

timp@arroyoins.com (Timothy Pine) — Tue, 23 Dec 2008 21:47:00 +0000

California businesses can expect at least a 5% increase in their workers compensation policy during . This increase is due to higher medical and claims adjustment costs to the system. This is a much smaller increase than was expected earlier in the year when the market was expecting a greater than 15% increase. As returns slip, medical costs increase and management costs expand we can expect this minimal increase is only temporary and larger increases are expected for California.

It is important for California business owner's to understand they have options when it comes to their workers compensation coverage. Their are over 30 insurance carriers that offer worker's compensation coverage for California businesses, and many of these carriers are extremely competitive. Carriers from Traveler's, Chubb, The Hartford, Zenith, First Comp, Comp West just to name a few can be just as competitive in certain workers compensation classifications. Worker's Compensation quotes are easy to obtain and should take your broker only a day or two to turn around to you, and could help you save 10-30% on this mandatory coverage. Get a Workers Compensation Quote today and find out if you are in the right place.

California Business Insurance Renewals for 2009...save money renew in '08

timp@arroyoins.com (Timothy Pine) — Tue, 09 Dec 2008 00:55:00 +0000

Recent reports have indicated that property and casualty insurance rates have continued to fall for renewals running through 2008. With reinsurance treaties coming up and rates being submitted to the state of California Department of Insurance, we can only wait and see what early 2009 hold for the commercial insurance market but if you have a renewal date in December you can breath a sigh of relief knowing that the turmoil in the markets has not affected your premiums, at least for another year.

We'll have to watch renewals closely to see when the hard market begins but as of today despite having all of the signs that rates should be increasing they are staying flat and even decreasing for some. Stay tuned.

California Business can get a quote HERE

How to shop for Business Insurance

timp@arroyoins.com (Timothy Pine) — Thu, 20 Nov 2008 19:00:00 +0000

I have often been asked by business owner's how to shop for business insurance policies. Most recently all of the clients I have picked up here in Southern California have been neglected by their existing brokers and when it comes time for renewal they have had zero contact with their broker. They receive their renewal policies two to three weeks before their renewal and end up having to go with the quote they have been give since the time lines are two short to gather the necessary information and correctly market their insurance needs. This is a very poor sales tactic used by bad agents to leave their clients with only one option when renewals come around.

I always suggest a comprehensive strategy to renewals that should begin ideally ninety days before your insurance renewal. All aspects of your insurance program should be reviewed for gaps in coverage. Your previous broker may not have understood your business as well as they lead you to believe and simply because you had a policy in force does not mean you were properly covered. Most policies start out as a shell and it is your broker responsibility working with the business owner to build out the policy to cover your business, in addition to making sure you are aware of other coverage that may help you shift risk, such as EPLI, Professional Liability, and product liability to name a few.

Loss runs (3 Yearss for GL, 5 Years for workers comp)

Revenue for 5 years

Vin#s and Vehicle information

Employees per job function

You should be discussing with your broker at these annual reviews how your business has changed, increase/decrease in revenue or payroll, new plans to expand, new business you may acquire, employee growth etc. I am always amazed at how many of these questions have never been asked when I am invited in to take over obtaining business policies for my clients. Business owner should also be aware of where their company is being presented and who is representing them. Often a broker with submit a company to all of the insurance companies they have access to with a current or even and old application. We call this "blocking the market" and at the end of the day the client losses when this tactic is used. It is often employed because a prospect has invited in to many brokers to shop his business. Usually the price you receive from one broker will be your price so as a business owner you are much better off choosing one or two good brokers who have a wide variety to markets to approach. This will save you and your broker time and at the end of the process you will not have burned your company name in the eyes of the underwriters.

Again your commercial insurance is extremely important and should be given the time it deserves, the last place you want to find yourself is having to handle a claim on your own instead of having the right coverage in place. If you feel your broker is falling short, I can help contact me here.

Thanks for reading....

Tim Pine

Arroyo Insurance Services

(800) 401-6764

timp@arroyoins.com

SocalInsuranceBroker.com

California Premium Rates climbing up in 2009?

timp@arroyoins.com (Timothy Pine) — Mon, 10 Nov 2008 16:55:00 +0000

The insurance industry has seen things this year no one would have ever predicted and most of use feel that their will be more to come. Munich Re, XL, Berkshire Hathaway have all release their most recent revenue reports showing that even the reinsurance market is taking a beating. What does all of this mean if you are a business owner charged with buying commercial insurance? The big thing to understand is that we are in a prolonged soft market for commercial insurance. This means rates for most if not all risks have been extremely low and hopefully business owners have enjoyed these low rates while the economy has been tough.

Marsh & McLennan CEO says economic turmoil, increased regulation will boost the price of risk.

However the soft market is cyclical and is based on reinsurance rates, returns on investments made by the carriers, catastrophic events and number of other factors. It is becoming evident that this soft market will be changing and probably very quickly. Renewals that took place in October and November held with the trends from the last 18 months, some even renewed lower than last year or where gobbled up by hungry competitors. This is a good market to shop while carriers still have capacity, once the hard market sets in shopping around will not be nearly this easy and rates will rise sharply. Business owners in California are going to be hit from all sides in 2009 with projected tax increase, economy challenges and the purpose of writing about the hit that is coming in the commercial insurance market is to help prepare not issues a gloomy forcast. Hopefully California businesses will take an opportunity to get a quote and get in a commercial insurance broker that they trust. Let me know if I can help.