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The answer to the above question is most likely, yes.

It is estimated that less than 5% of business owners carry Cyber Liability coverage. However, the threat of this type of risk grows every single year, and in many cases, could be a more likely occurrence than a fire loss to your business.

Cyber risk insurance, or what is often referred to as data breach insurance, can protect many aspects of your business such as unauthorized access, theft, human error, and ransomware attacks. The typical cost to protect, restore, and secure a single lost/stolen record is $217. A large loss could literally put you out of business.

In May 2017, one of the largest global cyber-attacks took place affecting 200,000 computers with ransomware.  Ransomware locks your computer and makes you pay a “ransom” to have access again. The ransom in this instance was $300 per computer.

In another claim scenario, a contractor plugged in a flash drive to a computer controlling a manufacturing production line and accidentally corrupted the computer. The production line was down for 2 days costing over $400,000 in lost revenues.

Without Cyber Liability coverage, no coverage would exist for either scenario. The good news, most insurance companies offer an endorsement or a standalone policy you can purchase to make sure you are properly covered.

If a cyber security endorsement is available this may be the cheaper way to go, but coverage limits could be low, and they may have specific exclusions. A stand-alone cyber risk policy would offer higher limits, and fewer exclusions, however, will have a higher cost. The best thing to do is speak with your insurance agent to help you determine what cyber insurance coverage is best for your business.

If you have any further specific questions about Cyber Liability Coverage, contact us here at Homestead, we will be glad to assist you.

I knew this title would get your attention! All jokes aside, this topic has been discussed over and over since the beginning of the auto insurance industry — “How Can I Lower My Car Insurance Rates?”

I’m sure when you asked this question to your insurance agent they gave you the same tried and true responses:

1. “Our company has taken a slight rate increase for all drivers in your area”
2. “Your car is getting older, therefore it is costlier to repair in the event of a claim”
3. “Looks like you got another seat belt ticket”
4. “You are getting older, insurance actually increases as your age increases”
5. “Looks like your credit score made your rate go up”

I’m sure at some point you heard one, or even two of these explanations over time. I am also sure that the solutions provided to reduce your rate were: Reducing coverage, paying in full, going paperless, or rewriting your insurance to a new company that you never heard of.

Wouldn’t it be nice if you could reduce your auto insurance cost without reducing coverage, or making changes to your policy? What if your rate could be tied to your actual driving habits? Well the day has arrived, and it is called Auto Telematics.

Lower Auto Insurance Rates for Good Drivers

More insurance companies are starting to use telematic devices in the rating of auto insurance policies. Some companies do this with a device to plugged into your car, and a few have developed an app for your smartphone. Typically, these devices monitor breaking, miles driven, time driven, idling, and in some cases, speed. All should exclude location monitoring since it would be illegal. The information is gathered over a 3-6 month period and the data is sent back to the insurance carrier.

If your driving habits are good, you could earn anywhere from 10-30% off your auto insurance rate. The best part is, most carriers will allow this discount to apply for the life of the vehicle on your policy. Most carriers will allow you to use this device for all your cars as well. Just think, you could be rewarded for your good driving habits, and pay an insurance rate that is fair based on your specific use of the vehicle.

We suggest that you contact your insurance agent today to discuss adding this program to your insurance policy. If you would like Homestead to help with your auto insurance needs, just give us a call, send an email, or shoot us a text.

To most employers, Workers Compensation Insurance is a mystery and a dreaded expense much like paying taxes. However, using the lessons below you will be armed with a basic understanding of workers comp insurance and you will be able to manage your coverage, and costs.

When Am I Required To Have Workers Compensation Coverage?

Every state will have their own requirements, however, most adopt the rule of three total employees. Once you have three employees, (this includes part-time and owners) you are required by state law to have Workers Compensation Insurance.

Do 1099 or “Independent Contractors” count as employees?

Again this can vary by state, but the consensus is they do count as employees. If you’re subcontracted, 1099 labor, does not have their own insurance they will count as an “employee”. You will need to provide coverage if you reach the employee limit discussed earlier unless the subcontractor has their own policy.

Am I covered if I provide services in multiple states?

If you perform duties in multiple states you will need to have your policy endorsed to include all the states you work in. Not doing this could cause a potential claim payout. Make sure you discuss which states you operate in with your insurance agent.

What if my organization consists mostly of volunteers?

By law, you are not required to have coverage for volunteer labor. However, this does not exempt you from being liable for a volunteer’s injury. We suggest you still obtain Workers Compensation Insurance to make sure you are protected properly.

Why should I purchase Workers Compensation Insurance if I am not required by law to have it?

Even if you don’t meet the law requirement for coverage, you still should have a policy. Even if your organization has 1 employee, you still would be held liable for injury, and potential compensation for their injury. Having a policy also protects you from being sued for damages exceeding your policy limits, as this is protected by state law.

Workers Compensation is expensive, how can I reduce my cost?

Here are several ways to reduce your cost:

1. Owners and officers can be excluded from coverage. This could save you thousands in costs depending on the type of work you do.
2. Separate out your labor force. It is important to keep detailed records for employees performing different tasks. Your office employees carry a much lower rate than your warehouse employees. If you do not keep these separate, insurance companies will include the payroll in your highest classification on your policy.
3. Develop a safety and drug testing program. If you have these programs in place, you could save up to 10%, and earn future claims free discounts in the future when your policy renews.
4. Work with an insurance agent that represents multiple insurance companies. This will allow you to obtain the most competitive Workers Compensation Insurance rate. This is very important since Workers Compensation typically is the most expensive of all Commercial Insurance Policies.

Workers Compensation Insurance does not have to be a complex subject. With the right information and a great relationship with an insurance agent, you should be able to be properly covered without breaking the bank. In most cases, when I work with clients that had bad Workers Compensation Insurance experiences in the past, it’s mostly related to poor information, and lack of communication by the insurance agent. If you still have questions, or would like to discuss how we can make Workers Compensation easier for you, please feel free to contact us. We look forward to hearing from you.

This question has come up more frequently over the past couple of years. Most individuals have not thought of the liability exposure when operating a drone for pleasure, or for business use. These exposures can consist of property damage, bodily injury, and invasion of privacy. Here are some facts concerning drone usage personally, and professionally:

Personal Drone Use Insurance

1. You must have a Homeowners or Renters Insurance policy to be covered for property damage, and bodily injury liability. Coverage will only be up to your policy limits, which are typically $300,000. You might have a gap in coverage if you severely injure another person. Obtaining a higher liability limit of $1,000,000 is suggested.
2. Liability from your Homeowners or Renters Insurance does not extend to invasion of privacy claims. For instance, you are taking aerial photos of your neighborhood, and you inadvertently snapped a photo of someone “sun-bathing” in their backyard. You could be subject to a lawsuit, and no coverage will be provided under your insurance policy.
3. Damage to yourself or family members will not be covered under your Bodily Injury Liability coverage. You cannot be liable to yourself, so you will want to make sure you have appropriate health insurance.
4. Damage to your personal property will be covered under the appropriate policy coverage. For example:  If your drone falls and hits your car, this would be covered under Automobile comprehensive coverage. However, if you do not have comprehensive under your Auto Insurance policy no coverage will be provided.
5. Damage to the drone in most cases would be covered under your Homeowners or Renters insurance policy. This would be subject to your policy deductible.
6. Beware of letting a friend operate your drone. Liability follows the owner, so if your friend causes property damage or bodily injury you would be held liable.

Commercial Drone Use Insurance

1. You must have Commercial Liability Insurance to be covered for property damage, and bodily injury liability. Coverage will only be up to your policy limits and could have exclusions, so make sure you review your current policy for any drone operation exclusions.
2. An “insured” operator must be an owner, partner, spouse, or employee of the business. Letting your buddy operate the drone will not extend coverage from your Commercial Liability Insurance policy.
3. Again, most policies will exclude coverage for invasion of privacy claims. You may want to consider purchasing a “drone liability” policy, which we will discuss later.
4. Damage to the drone would be covered under Business Personal Property or Inland Marine policy. Discuss this with your insurance agent to see what would be more appropriate for your business.
5. Injury to yourself or employees by the drone will fall under Workers Compensation Insurance. Make sure you have this coverage in place.
6. Damage to your building, vehicles, or equipment by the drone will be subject to the appropriate policy covering those items. Again, your Commercial Liability Insurance will not provide the coverage, since you cannot be liable to yourself.

What Should I Do To Make Sure I Have Appropriate Insurance?

1. You should speak to your agent, and explain what you will be doing with the drone. Your agent should be able to advise you on the measures you need to take to ensure you have proper coverage.
2. You should look at carriers that specialize in drone liability coverage. For example, the company Verify, https://verifly.com/ provides up to $1,000,000 of short-term liability coverage while the drone is in flight. Their website states that coverage can be purchased for as little as $10 an hour depending on flight path, and drone type. This is an app you can download and will communicate with your drone to charge you the correct premium. After reviewing their sample policy, it appears to have broader coverage especially those operating drones commercially. They also extend liability to invasion of privacy claims, if deemed accidental. Their policy excludes liability coverage for packages or other items carried by the drone during flight.

Hopefully, we dispelled some of the myths and offered some clear concise information about insuring your drone. Drones are a lot of fun personally and have a lot of useful business applications as well.  Proper drone usage should be encouraged and insured appropriately.  If you wish to discuss this topic further, we look forward to hearing from you.