For the health and safety of our staff and our valued clients, we will conduct business via phone or email during our regular working hours, Monday-Friday 9:00am–5:00pm EST until further notice. All COVID-19 related notices can be filed via our COVID-19 Notice Form by clicking here or by calling our office at 800.694.0279 option 1. We recommend that you maintain a copy of your notice form for your records.

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ASZ International, Inc.

200 Summit Lake Drive
Suite 220
Valhalla, NY 10595

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Spring Cleaning Tips for Homeowners

As warm weather approaches, the urge to start spring cleaning around our homes and property arises. It is important to remember that spring cleaning is not just about fixing up the appearance of your home but also cleaning and fixing damages for a safer living area. Here are some helpful tips for spring cleaning and avoiding homeowners claims:

Clean Out Gutters and Remove Drain Build Up

Fall leaves and winter weather tend to leave behind lots of debris in your gutters and drains outside your home. Make sure to clean out the gutters and drains to prevent damage to the foundation of your home, rotting wood, leaks in your roof, water spots, and basement leaks.

Check Driveway and Sidewalks

The drastic change in weather and temperature from season to season can lead to ground movement creating uneven walking areas that can cause hazards on your property. By checking your driveway and sidewalks for cracks and holes and patching them, you can prevent claims that arise from injury.

Check Roof, Siding, Porch, and Deck

Wind, rain, snow, and other weather conditions can lead to damage to the roof, siding, porch, and/or deck of your home. It is important to assess the outside of your home to find areas of sagging, missing shingles/siding, rotting or loose material, loose nails, and unfastened railings. These hazards can affect your home’s safety and increase the likelihood of a homeowner’s claim.

Check Caulking in Your Bathroom and Kitchen

Over time, the caulk in your bathroom and kitchen can deteriorate and create cracks that lead to water damage in your home. Staying on top of the conditions of the caulking in your showers, sinks, bathtubs, and other plumbing areas in your home can help reduce the likelihood of claims and losses due to water damage.

Clean Out Dryer Vents

Lint buildup in your dryer can cause major problems in the effectiveness of your machine and can also cause dryer fires. It is important to not only clean the lint trap after each use but also to inspect the dryer hose and wipe out extra lint in your machine periodically as lint is extremely flammable.

Change Smoke Detector Batteries

It is important to change the batteries in your smoke detectors at least twice a year. Adding it to your spring-cleaning checklist can help protect you, your family, and your home in the event of a fire.

Preventing Pipes from Freezing

As the winter months continue, and temperatures continue to fly below freezing, it’s important for everyone to learn tips on how to avoid freezing pipes. With early detection and proper preparation, you can easily avoid this well-known winter peril.

Pipes that can freeze:

Frozen pipes can occur in both indoor and outdoor areas. Due to their outdoor location, the more common water lines that freeze are outdoor hose bibs, swimming pool supply lines, and water sprinkler lines. The indoor areas are where people tend to forget that they could be at risk. Unheated interior areas such as basements, crawl spaces, attics, garages, and kitchen cabinets that run against exterior walls that may have little or no insulations, are also in danger of freezing.

Contributions to frozen pipes:

There are a few different factors that can play into pipes freezing. Often, we think about the decline in temperature as being the main reason for freezing pipes. But there are other factors to also consider. One of them being the construction of the building. Buildings that are poorly designed and don’t withstand severe weather, as well as the age of the plumbing system in the home can play a huge part in frozen pipes. The quality and quantity of insulation are other key factors to think about. Blow-in or foam insulation added between interior and exterior wall surfaces and studs may actually insulate heat away from pipes, making them more prone to freezing. Lastly, it’s important to consider the fact that power outages could in fact impact your pipes. Most heating systems depend on electricity, so when the power goes off, so does the heat. Of course, it is most important to realize the impact of power outages during the cold winter months when the pipes are more susceptible to freezing without heat as damage could occur before the power is restored.

Preventing frozen pipes:

As the fall comes to an end, and the winter season is soon to begin, it’s important to drain and disconnect all outdoor pipes. For example, be sure to drain the water from your swimming pool, water sprinkler supply lines, hoses, and any outdoor plumbing systems. Using compressed air to blow outlines is an effective way to empty any water that may be left. It’s also important to store away any hoses used outdoors so they’re not damaged during the cold weather. Be sure to close inside valves that supply outdoor hose bibs and keep the outside valve open so any water remaining in the pipe can expand without causing damage to the pipe. Keeping your house temperature set to at least 55 degrees is another key factor in keeping your indoor piping safe. Lastly, you should check for water supply lines that are in unheated areas (examples are listed above) so you can properly insulate these pipes by using specific products like a “pipe sleeve” or installing UL-listed heat tape, heat cable, or similar materials.

What to do if a pipe bursts:

It is extremely important to shut off the water at the main valve if a pipe bursts. Be sure to identify the pipe or pipes that have burst. Try your best to dry things out if you can and document everything that happened by taking photos of the damage/occurrence and writing down everything that has been damaged. Next, contact your insurance company to notify them of your claim. If you have standing water, you should also contact a plumber and property damage company to evaluate and remediate any water damage that may have occurred. If you would like recommendations, please contact ASZ International for assistance.

Insurtech: Creating Nimble Solutions for Small Business Owners & Brokers

Traditional buzz words surrounding the insurance industry typically include one or more of the following: boring, opaque, and antiquated in its approach to customer service. However, the advent of the concept of “Insurtech” over the last five years has infused new life into the insurance marketplace. A report released by Willis Towers Watson in 2021 highlights the USD 7.1B investment in Insurtech companies across a wide variety of seed stages and a range of insurance products, even amid a global pandemic. There is no doubt that this focus on insurance technology will have an impact on the way the insurance industry does business in the following ways:

Distribution: Insurance companies and brokers/agents have historically relied on face-to-face relationship building and in-person client interaction as the cornerstone of their distribution strategies. A majority of Insurtech companies are focused on improving and refining these approaches by providing a more open & transparent marketplace driven by data & instant consumer feedback.  

Coverage/Risk Specificity: Insurance technologies are enabling underwriters to establish more defined parameters around their acceptance of risk, leading to more accurate (less obsolete) coverage and pricing. For example, in the P&C space, satellite imagery, location data, and camera footage are being utilized to underwrite property risk. In the life & health space, multiple raw data points (weight, family medical history, smoking habits, etc…) are compiled together to create a single “score” that is the foundation of life insurance underwriting.  

Efficiency:  As clients become more and more tech-savvy, they are demanding speed & efficiency in everything from proposal generation/delivery to underwriting and credit decisions. Insurtech allows insurance professionals to be more nimble in all of these areas and better serve different types of clients (i.e. small businesses and independent contractors) who were at a disadvantage as their inherently smaller premium spends were not always profitable within more traditional mega-insurance companies/brokers with massive overhead.

The COVID-19 pandemic of 2020 turned the world on its head and forced insurance professionals to address never encountered issues relating to communicable disease spread, massive business interruption, real estate vacancies, employment practices/workers compensation claims implications, and beyond. It will be invigorating to see how Insurtech companies & investors utilize this momentum to push advances in technology and risk management strategy as a new global normal emerges.  

At ‘ASZ’ our focus is to improve our client interactions to account for changes in consumer expectations and desires. We continue to roll out more digitized and automatic insurance solutions to make client engagement as effortless and seamless as possible.  We enhanced our digital automation at all stages of client interaction, from prospect, to new business client to renewal and even separation.  Our business technology has been customized to help us quickly identify opportunities, streamline communication, identify issues/gaps and help continuously measure performance and profitability at all levels.  We have the ability to maintain transparent and open 24/7 dialogue with our clients with integrated text/email/fax capabilities via our web platform.  We also have been expanding out integrations with our insurance market partners for the most efficient interactions.  Given our increased focus in the Insurtech space, we would be remiss if we did not pay close attention to issues such a cyber security and privacy regulations.  We strive to be overly compliant with all NYS/Federal regulations relating to cybersecurity matters. We have secure integrations with collaborative partners for regulations, licensing and KPIs on front and back-office operations

Sources:

QBE North America. (2019). Impact InsurTech: How InsurTech is Transforming the Insurance Industry. Retrieved from Risk & Insurance, Village Capital: https://riskandinsurance.com/impact-insurtech-how-insurtech-is-transforming-the-insurance-industry/

PWC. (2019). This is InsurTech’s moment. Will insurers seize the opportunity? Retrieved from PWC.com: https://www.pwc.com/us/en/industries/financial-services/library/insurtech-innovation.html

Willis Towers Watson. (2021, January). Quarterly Insurtech Briefing: Q4 2020 & Year In Review. Retrieved from CB Insights: https://www.cbinsights.com/research-insurtech-report-q4-2020?utm_campaign=marketing_wtw-insurtech_2021-01&campaignid=270202443&adgroupid=115917991854&utm_term=%2Binsurtech&utm_campaign=Reports&utm_source=google&utm_medium=cpc&utm_content=adwords-reports-a

Coronavirus and Employment Practices Liability Claims

With the global economy facing potential upheavals from COVID-19, some companies could be forced to lay off employees. These actions will likely trigger employment practices liability insurance (EPLI) claims, especially knowing the commonality of these cases already.

Former employees might quickly jump to conclusions, such as wrongful termination or discrimination, resulting in EPLI litigation. Defending against allegations of this nature could be incredibly costly—even if there’s no legitimate cause found. An EPLI policy would work to cover defense costs and help your company navigate the jittery economy. 

In order to put your business in the best possible position ahead of a decision about a Employment Practices Liability claim, adhere to the following best practices.

Document and report claims immediately. Without ample notice and prompt filing, coverage will likely be denied. There is no downside to filing claims as soon as possible. Doing so ensures that your business will be in the right place when applicability of WC coverage claims are resolved.

Provide comprehensive details surrounding each claim. File each claim with as much detail as possible to ensure thorough review of your coverage and unique scenario by the carrier.

Record each individual claim by line of coverage. Doing so will make it easier to monitor carrier response internally and simultaneously provide your carrier with a simplified way to absorb multiple claims from your business.

Coronavirus and Directors & Officers Claims

One of the largest areas of exposure for public companies (and to some extent, private companies) is securities class actions and/or shareholder derivative claims relating to affirmative acts of mismanagement and/or failure to act/disclose by officers and directors in response to the COVID-19 outbreak.

Another major area of concern relates to liability arising from cyber security and privacy issues, given that many company employees are now working remotely to avoid exposure to COVID-19. The failure to sufficiently protect a company’s network could leave the company vulnerable to cyberattacks, ransom demands, loss of company data, and overall exposure for failing to insure against cyber risks.

Coverage under a D&O policy for the above exposures will vary according to the individual terms and conditions of the policy. Nevertheless, securities class actions and shareholder derivative claims are claims that typically fall within the scope of the insuring agreement under a D&O policy. In assessing the potential for coverage, careful review of several exclusions and other issues is necessary. For example, the language of any bodily injury exclusion should be reviewed for its breadth (e.g., claims “arising from” bodily injury vs. claims “for” bodily injury) as well as any exceptions to that exclusion, such as securities actions.

As is often the case with D&O claims, the language of the conduct exclusion (i.e., dishonest, fraudulent, malicious, and criminal acts) should be reviewed to determine whether its application requires a final adjudication exhausted by appeal or only “in fact” confirmation of such conduct. Moreover, claims also may implicate the professional services exclusion to the extent an employee’s professional services to the company gave rise to the claim, such as legal advice from an in-house counsel, forensic accounting services by the Chief Financial Officer, or otherwise.

As to cyber security and privacy, direct losses caused by a cyber event may need separate cyber insurance. To the extent the cyber event triggers a securities class action, however, there are a number of exclusions (including those discussed above) that may require consideration. For example, the exclusion for war or terrorism should be considered in the event of a cyberattack because there are instances in which cyberattacks are orchestrated by state actors or quasi-state actions and/or terrorist organization criminal enterprises – as opposed to random, “lone wolf” actors.

In order to put your business in the best possible position ahead of a decision about a Directors & Officers Liability claim, adhere to the following best practices.

Document and report claims immediately. Without ample notice and prompt filing, coverage will likely be denied. There is no downside to filing claims as soon as possible. Doing so ensures that your business will be in the right place when applicability of WC coverage claims are resolved.

Provide comprehensive details surrounding each claim. File each claim with as much detail as possible to ensure thorough review of your coverage and unique scenario by the carrier.

Record each individual claim by line of coverage. Doing so will make it easier to monitor carrier response internally and simultaneously provide your carrier with a simplified way to absorb multiple claims from your business.

Coronavirus and Workers’ Compensation Claims

At the precipice of the issue for employers and business owners is the liability they may be required to shoulder if essential workers contract the virus on the job, spread it to others or bring it home to their families. Could the business be liable for a workers’ compensation (WC) claim?

The answer is: it depends. The clarification of insurance coverage remains largely undecided as it relates to Workers Compensation. Right now, the answer is almost exclusively at the carrier’s discretion. Application of coverage eventually “may” be decided by state and federal courts, or government intervention.

Workers Compensation coverage is subject to each state’s jurisdiction. Currently, a few states – Kentucky, Washington State, Michigan and Colorado have officially ruled on WC and COVID-19. These states will provide Workers Compensation benefits or wage replacement to healthcare workers and first responders during the time they are quarantined after being exposed to the virus on the job. Washington State Workers Compensation coverage will pay for medical testing, treatment expenses and provide indemnity payments for those who cannot work, while the Kentucky Employers Mutual Insurance Co., said they will pay wage-replacement benefits for first responders or healthcare employees while in quarantine.

For non-healthcare workers and general employees in every other state, Workers Compensation coverage remains a moving target and compensability will be based on the work of each individual class, and ultimately determined by the carrier and individual state. It has to be in the course and scope of employment.

In order to put your business in the best possible position ahead of a decision about a Workers Compensation claim, adhere to the following best practices.

Document and report claims immediately. Without ample notice and prompt filing, coverage will likely be denied. There is no downside to filing claims as soon as possible. Doing so ensures that your business will be in the right place when applicability of WC coverage claims are resolved.

Provide comprehensive details surrounding each claim. File each claim with as much detail as possible to ensure thorough review of your coverage and unique scenario by the carrier.

Record each individual claim by line of coverage. Doing so will make it easier to monitor carrier response internally and simultaneously provide your carrier with a simplified way to absorb multiple claims from your business.

Coronavirus and General Liability Claims

Even though questions pertaining to how the General Liability policy will respond to COVID-19 has been limited, it is still important that it is addressed.

Legal Liability Required
To lead into the CGL’s response to the coronavirus, one key fact must be understood. If there is no legal liability, coverage is not triggered in the CGL and the policy will not respond. Legal liability exists when:

1. The wrongdoer is found guilty of “Negligent Conduct” (meaning they breached a duty owed to the injured party); 

2. The injured party suffers actual damages; and

3. The wrongdoer’s “Negligent conduct” is the proximate cause of the injury or damage.
 
Far more than these triggers are required to ultimately establish legal liability, but such detail is not the focus of this article.

Was There an “Occurrence”?
A second requirement contained within the insuring agreement plays a role in the CGL’s response to any injury supposedly arising from the coronavirus – the injury must qualify as an “occurrence” before the policy responds. The CGL form reads:

b. This insurance applies to “bodily injury” and “property damage” only if:
(1) The “bodily injury” or “property damage” is caused by an “occurrence” that takes place in the “coverage territory”
 
Within the CGL an occurrence is defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions. Is contracting a virus an occurrence within the policy form?
To decide if this qualifies as an “occurrence” the question must be asked, is passing along a virus an accident? Maybe, but there are too many variables are involved to provide a definitive answer. As part of the question of an “occurrence,” the injured party has to prove that the virus was contacted at the insured’s premises or arising from its operations. Given the specifics, this might be almost impossible.

For sake of the overall discussion, assume making another person sick qualifies as an “occurrence” in the CGL, and that the person is able to prove that his/her only exposure was at the insured’s locations or a result of the insured’s operations. 

If the insured is legally liable if there is an occurrence as defined in the CGL and if the exposure can be narrowed down to the insured, the next step is to look for exclusions within the CGL.

Are There Any Exclusions?
Review the exclusions in the unendorsed CGL and only one exclusion could possibly negate coverage for spreading the coronavirus to members of the public, exclusion 2.a. Expected or Intended Injury. For example, if the insured requires an employee to continue working or come to work who is known to be infected, spreading the virus should be expected (even if not intended). No coverage due to the exclusion.

If, however, the expected or intended injury exclusion does not apply, there do not appear to be any other exclusions applicable to the spreading of the coronavirus. Although some enterprising claims person would surely try to use the pollution exclusion.

This leaves us with the impression that the CGL may provide coverage for infecting a third in certain circumstances. But this is not necessarily true.

A Common (Ubiquitous) Exclusionary Endorsement
Even if an incident leading to bodily injury from coronavirus clears all the required hurdles (the insured is legally liable, the incident qualifies as an occurrence, the injured party can prove the exposure is the from the insured’s actions, and the claim is not hindered by the expected or intended injury exclusion), there is still one roadblock – an exclusion common to most CGL policies – the CG 21 32 05 09 – Communicable Disease Exclusion.

Undoubtedly the question to be answered is, does a virus qualify as a disease? In a “roundabout” way, yes. It’s not the virus that causes harm, it’s the disease that results from the virus. The immune system destroys some viruses before they can cause any harm, but some viruses overpower the immune system and lead to sickness (disease).
When the CG 21 32 is attached, there is no coverage for the transmission of the coronavirus and the resulting sickness (disease).

How is the CGL Going to Respond to the Coronavirus?
Without overstating the reality, it seems rather unlikely that a CGL policy will ever pay a claim arising from the coronavirus. The facts may negate any possibility that the insured is legally liable for spreading the virus/disease. And even if the insured is legally liable, does spreading a virus actually qualify as an occurrence as defined in the policy? If these two insuring agreement conditions aren’t met, there is no need to go any further into the coverage form because there is no coverage.

In order to put your business in the best possible position ahead of a decision about a CGL claim, adhere to the following best practices.

Document and report claims immediately. Without ample notice and prompt filing, coverage will likely be denied. There is no downside to filing claims as soon as possible. Doing so ensures that your business will be in the right place when applicability of CGL coverage claims are resolved.

Provide comprehensive details surrounding each claim. File each claim with as much detail as possible to ensure thorough review of your coverage and unique scenario by the carrier.

Record each individual claim by line of coverage. Doing so will make it easier to monitor carrier response internally and simultaneously provide your carrier with a simplified way to absorb multiple claims from your business.

Coronavirus and Business Interruption Claims

COVID-19, better known as the Coronavirus, originated in Wuhan, China. According to the Centers for Disease Control (CDC), the Coronavirus is thought to be transmitted person-to-person through “respiratory droplets produced when an infected person coughs or sneezes … these droplets can land in the mouths or noses of people … or possibly be inhaled into the lungs.”

Major operations have slowed or even ceased operations, travel is at a bare minimum, and supply chains are severely disrupted in many industries. In reality, the ultimate global economic impact of this virus will remain unknown for many months after the danger and fear have passed.

ASZ continues to receive calls and emails nearly every day regarding the insurance implications of this virus, and the most common question relates to business income, specifically: “Is there business income coverage if a governmental authority (civil authority) requires businesses to close?”

Before business income responds there must be damage to property leading to the cessation of a business. This requirement applies to business income dependent property losses (supply chain) and civil authority losses covered by business income policies. Additionally, there is a specific property exclusion applicable to viruses that may (generally will) apply. This is true of “standard” business income forms; there may be some proprietary forms that respond, but these are rare.

In response to the Coronavirus, and because many, if not all policies contain a virus exclusion, the Insurance Services Office (ISO) created two business income endorsements as a specific response to the Coronavirus:

  • Business Interruption: Limited Coverage For Certain Civil Authority Orders Relating To Coronavirus ─ Edition February, 2020; and
  • Business Interruption: Limited Coverage For Certain Civil Authority Orders Relating To Coronavirus (Including Orders Restricting Some Modes Of Public Transportation) ─ Edition February, 2020

Coverage provided by both endorsements:

  • Begins immediately upon suspension of the insured’s operations (there is no waiting period).
  • Extends for the time period specified in the schedule.
  • Is provided on an annual aggregate basis limited to the amount stated in the Schedule.

Both endorsements:

  • Provide limited coverage when/if there is a suspension of operations due to closure or quarantine at the insured location ordered by a civil authority attempting to avoid or limit the spread of infection by a Coronavirus.
  • Extend dependent property coverage (contingent business income) for named locations, if the policy includes dependent property coverage, when there is an interruption in the insured’s business due to closure or quarantine to avoid or limit the spread of infection by a Coronavirus ordered by a civil authority at the dependent property.
  • Apply to income loss suffered by insureds operating from a vehicle or mobile equipment, if the policy is endorsed to recognize such vehicle-based operation.

Lastly, both endorsements specifically exclude:

  • Intentional action by any person, group, organization or sovereign state to introduce or spread the virus;
  • Costs to clean, disinfect, dispose of or replace any property;
  • Costs to disinfect or dispose of any bodily fluids or waste materials;
  • Costs of testing for or monitoring the presence or absence of the virus;
  • Loss or expense due to fear of contagion, e.g., when customers, tenants or vendors avoid a part of the insured’s premises not under quarantine;
  • Loss or expense related to absence of infected workers or those suspected of being infected; and
  • Any fines or penalties.

Even BI policies with a pandemic endorsement(s) are being reviewed by carriers at this time due to other exclusions in those policies that may prohibit coverage for COVID-19. The mandated closure of businesses has not yet altered the coverage position set forth by these policies.

In order to put your business in the best possible position ahead of a decision about a BI claim, adhere to the following best practices.

Document and report claims immediately. Without ample notice and prompt filing, coverage will likely be denied. There is no downside to filing claims as soon as possible. Doing so ensures that your business will be in the right place when applicability of BI coverage claims are resolved.

Provide comprehensive details surrounding each claim. File each claim with as much detail as possible to ensure thorough review of your coverage and unique scenario by the carrier.

Record each individual claim by line of coverage. Doing so will make it easier to monitor carrier response internally and simultaneously provide your carrier with a simplified way to absorb multiple claims from your business.


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