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Four Things to Keep In Mind when Renewing Insurance

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As the New Year rolls around, the time comes for many of us to renew our insurance policies for work and home, property and liability. While many of us just keep writing that premium check without thinking twice about it, ever changing life and business situations also change our risks and exposures. A little attention to insurance coverage now can avoid large problems later when it comes to evaluating whether insurance coverage provides the protection required. Here are four things to keep in mind when it comes time to renew an insurance policy.

1. Read the old policy.

While insurance policies can be intimidating, one needs to try to be familiar with the contents of the policy. Absent unusual language or circumstances, the law generally assumes that policy holders read and understand their insurance policy. While they aren’t expected to be an insurance lawyer, they do need to know if the policy covers all the risks that that may be encountered. Does the property insurance have a high enough coverage limit to replace jewelry or computer equipment in the case of a burglary? Does the policy contain language excluding coverage for a risk that didn’t exist in the past but does now (such as a swimming pool or a large dog)? It is difficult to assess whether the coverage is sufficient without knowing what the coverage is.

2. Communicate with the broker about life or business changes since the last renewal, including major purchases that should be protected.

An insurance broker can be an excellent resource for helping to obtain coverage and comply with the terms of the policy. A broker can help work through the application process, help to file claims, and discuss the different types of insurance products that are available. The assistance the broker provides, however, can only be as good as the information provided to the broker.  Under New York law, an insurance broker does not have the obligation to advise clients regarding the sufficiency of coverage, only to obtain the coverage that the client specifically requests. The policyholder will bear the consequences for any mistakes, so they are responsible for adequately communicating the risks. Many brokers provide their clients with a checklist at renewal time to go over any major life changes that could affect coverage. If they don’t, however, the insured has the responsibility to provide the broker with any information that would be relevant to the renewal, including new risks or the need for new limits.

3. Be wary of quotes for significantly lower premiums.

Insurance companies make their money by pooling risk and taking in more money in premiums than they pay out. As such, they have teams of underwriters and actuaries determining the amount they need to charge for the coverage they provide. If, when obtaining a variety of quotes for coverage one comes back substantially lower than all the others, make sure that there aren’t any hidden exclusions or limitations on the policy. For example, liability policies that contain exclusions for injuries to employees or injuries arising out of completed operations are generally much cheaper than policies that provide coverage for those risks. Depending on the business, the majority of exposure may fall into one of those categories and having a policy that contains such an exclusion could lead to financial disaster if a loss is suffered. It is a good idea to bring the policy to an attorney for review prior to jumping on what seems like a good deal, only to find out that it isn’t the type or amount of coverage needed.

4.  Make sure the insurance covers the obligations under a lease or other contract.

The majority of people and businesses are either landlords or tenants, and there are some common insurance issues that come up in leases. For tenants, does the written lease contain a provision requiring the name of the landlord on the insurance policy? For landlords, does the insurance contain a provision that the insurance is invalid unless coverage is obtained from tenants as well? Does a lease require that there is a written agreement to waive subrogation against the landlord for damages covered by insurance? If an attorney helped with the lease, the attorney can be asked to look at the insurance policy to ensure that it complies with the lease terms. Failure to comply with the terms of the lease can leave one as exposed as if they did not have any insurance coverage at all.

 

Jeffrey Briem
Senior Attorney, Jones Morrison, LLP

Jazz at Lincoln Center – at Caramoor!

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Caramoor Center for Music and the Arts is delighted to announce an inspiring new collaboration with Jazz at Lincoln Center, led by Managing and Artistic Director Wynton Marsalis. Jazz at Lincoln Center programming will provide audiences the chance to hear world-class jazz from one of the nation’s foremost cultural institutions in Caramoor’s idyllic setting. This new programming collaboration will launch at the 22nd annual Caramoor Jazz Festival (July 18), and will feature events and performances for jazz enthusiasts of all ages, culminating in a performance by the celebrated Jazz at Lincoln Center Orchestra with Wynton Marsalis. As in previous seasons, the festival will take place throughout the historic Caramoor estate: 90 acres of picturesque Italianate architecture and gardens in Katonah, NY, just an hour’s drive from Manhattan, and an oasis for jazz aficionados and newcomers alike. Mark your calendars, jazz lovers, and get ready for a great day of music! Stephen J. Jones, our managing partner, is a member of the Caramoor Board of Trustees.

For more information about Caramoor, visit www.caramoor.org.

Employment Law Issues

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If you are a restaurant owner, or any business owner, you should be thinking about employment law issues and how Jones Morrison can help you understand them and implement solutions. Even simple actions, such as posting signs in the workplace about state and federal laws, and ensuring you are in compliance with the New York State minimum wage increase to $8.75 per hour as of January 1, 2015. Our clients (and the federal courts) have seen a dramatic increase in unpaid and underpaid wage and hour and overtime claims. Whether driven by a struggling economy or increased awareness of workers’ rights, employers need to be careful – particularly about the classification of employees as “exempt” from federal and state overtime laws. From helping create a personnel handbook to make sure policies are clearly defined for employees to exploring employment agreements for top managers and executives, Jones Morrison can help avoid future legal issues and allow you to keep your mind on the dinner rush.

It’s Time For Your Annual Legal Checkup

2015 Small Business Jones Morrison Legal Checkup2015 is right around the corner and it’s time for you to schedule your annual legal checkup. Many legal problems that clients encounter can be prevented or minimized by meeting with your attorney yearly to review your insurance coverage, business maintenance, estate planning, retirement planning or investments. The costs of legal checkups can more than pay for themselves, whether it is an analysis of your business or personal matters, or both.

Most small and mid-size businesses do not adopt thorough preventative measures via a yearly legal health report with their attorney – despite not typically having in-house counsel.  The inevitable changes in your business can be planned for, whether they are due to economic shifts, growth of the business, regulatory changes or a change in a business owner’s circumstances.

A legal checkup includes a review of the records and practices of your business, including

  • Loan Agreements
  • Employment Agreements
  • Employee Handbooks
  • Licenses & Permits
  • Regulatory Compliance
  • Corporate Charter
  • Operating Agreements
  • Individual’s Business Risk
  • Financial & Tax Matters
  • Expansion Plans
  • Possible Litigation Issues
  • Insurance, Liability & Indemnity
  • Real Estate & Property Matters

While larger businesses are more likely to need a more thorough review, sole proprietors are just as likely to come up against legal road blocks and have more difficulties managing them both financially and concurrently with the demands of their business.

Long term planning can also be a tool that helps with the growth of your business, not only by making sure it is healthy, but also by putting in place processes that will benefit future growth and expansion.

For some business owners, a legal checkup may also include an analysis of the personal financial risk and implement measures to protect against a failing business or venture.

Just like a yearly medical checkup from your doctor, a legal checkup will monitor your business, put in place protections, and leave you confident in your business for the coming year.

To speak with one of Jones Morrison’s attorneys about scheduling a meeting regarding your business, estate planning, and retirement plans, or personal asset management call us today at (914) 713.9311.

 
CONTACT MANAGING PARTNER
Stephen J. Jones
Direct Dial For All Offices
914.713.9311  
Telephone
914.472.2300