Companies Sue over Michigan Fireworks Insurance Requirement

Several fireworks companies are suing over what they call Michigan’s excessive insurance requirements under a new state law.

The companies filed suit on Feb. 1 in Detroit federal court seeking to overturn a requirement to obtain $10 million in liability insurance in order to sell an expanded line of fireworks.

A state law that took effect this year allows the sale of more powerful fireworks such as firecrackers and other devices such as bottle rockets and Roman candles

The companies suing the state say the insurance provision is unconstitutional and favors larger companies that can afford the coverage, giving them an unfair advantage in the market.

A spokeswoman for Gov. Rick Snyder says the insurance level was appropriate given safety priorities with the expanded fireworks availability.

Source: Insurance Journal

Landlord Loss Prevention

Loss Prevention Guidelines

Being a landlord isn’t always easy. Problems with tenants can result in loss of time and money as well as unnecessary hassles. If you don’t want to deal with rent collection, maintenance and tenant screening, consider using a Property Management Company to manage your rental properties. However, if you do handle things on your own, the following guidelines may help ensure a good relationship with your tenants, maintain your rental home and make your life as a landlord much easier.

Tenant Screening

• Check references. Request at least three references (preferably previous landlords) and take the time to follow up on them.
• Keep records. To protect your interests and the interests of your tenants, document everything in writing and keep the paperwork throughout the entire rental agreement.
• Run a credit check. It’s always wise to check an applicant’s income, employment and credit history to verify they can afford to pay rent each month. However, make sure you obtain your prospective tenant’s written consent before doing so.
• Prepare a clearly-defined lease. Develop an appropriate set of rules and have them reviewed by a real estate attorney. Provide all prospective tenants with a copy of the rules and have them initial each page and sign an acknowledgement.

Important information to consider in a lease agreement

Be sure your lease agreement outlines the specific obligations of each party and is written clearly enough for the tenant to understand what they must or must not do. Standard items to consider include:

• Rent. Be specific about when the rent is due and when it’s considered late.
• Deposit information. Outline the amount of deposit required and what circumstances may result in a loss of deposit money.
• Prohibited activities. Create a concise list of the types of activities you will not allow, such as grilling on porches or decks, use of portable space heaters, renovations or remodeling without landlord consent.
• Maintenance and repairs. Document who is responsible for routine maintenance and repairs and provide the amount of time you will be allowed to respond to requests.
• Responsibility for utilities and waste removal. Clearly define who is responsible for each utility and service.
• Your right of entry to the premises. It’s a good idea to include circumstances in which you have the right to enter.
• Pet restrictions and policies. Specifically list any pets or breeds you will not allow in addition to any regulations that need to be followed.
• What stays and what goes when the tenant vacates. If your home provides any removable items, be sure to note that they need to stay in the home when the tenant leaves.
• Length of notice to vacate. Provide how many days notice you will need when a tenant decides to move out.
• Renter’s insurance policy. Require that your tenant have an insurance policy in the event of a fire, theft or liability issue.

Source: Fremont Insurance Company

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Halloween Safety Checklist

Getting ready for trick-or-treating in Traverse City tonight (which officially runs from 5pm-8pm)? Consider reviewing the following safety checklist with your little ghosts and goblins:

• Consider visiting houses during late afternoon when it’s light out — but first ask neighbors if they’ll be home and ready for little guests.
• Give your child a flashlight with new batteries.
• If your child is 12 or under, accompany her and label her clothing with your name, address, and phone number in case you become separated.
• If your child is older than 12, make sure he knows his phone number and either has a cell phone (with your contact numbers clearly labeled on it) or enough change to call you from a pay phone.
• Establish an agreed-upon route and curfew for children over age 12.
• Teach your child to trick-or-treat only at homes with outside lights that are turned on and to never enter anyone’s home unless accompanied by an adult.
• Remind your child to walk — never run — while trick-or-treating and to stop at street corners and driveways before proceeding.
• Instruct your child to look left, right, and left again before crossing the street and to continue looking both ways as he crosses.
• Teach your child to stay on sidewalks at all times and to avoid cutting through people’s yards, where clotheslines and other hazards are hard to spot.
• Remind your child to wait until you’ve inspected her treats before eating them. Discard anything that’s not completely wrapped.
• If your child is allergic to nuts, check all treats carefully before allowing him to eat any.
• Remember to not allow children under 4 to eat popcorn or hard candy, both of which are choking hazards.

What is “professional liability”?

Professionals, such as doctors, lawyers and accountants, along with a growing number of other occupations, work in fields that need special protection. Pharmacists, architects, engineers, opticians, beauticians, insurance agents, and various types of consultants are frequently sued due to the high standard of accountability under which they operate.

In most instances, a type of coverage called a general or commercial general liability policy will protect a business against the damage or injury their actions may cause to others. However, this type policy is designed to handle loss associated with fairly generic and low-risk activities. Examples are customers who cut their hands on a sharp edge of an office’s reception desk or a customer who is hurt when she collides with a clerk who is stocking a shelf. Much more is at stake with professional activities. Consider several aspects that make professional liability tougher to insure:

Professional Advice – persons who need professional liability coverage are those whom the general public depend upon as experts. They provide assistance with special issues such as personal health, expensive business transactions, or personal crises. Many of these situations also involve a high-level of emotion. When something goes wrong, it is much more likely that a client will pursue “justice” through the courts.

Professional Reputation – Any claim a client makes against a professional involves that individual’s reputation. In many instances, paying a claim bears the stigma of admitting to a mistake. The professional may suffer from a lowered status and could face sanctions from related professional associations or regulatory authorities. Further, many professionals are proud of their standing and their abilities; admitting being wrong is usually fiercely resisted.

Higher Defense Costs – Defending against claims of professional error or incompetence is usually very expensive and time-consuming. Trials will usually involve expert testimony and technical arguments and the likelihood of resolving issues quickly (particularly via a settlement) is extremely low.

Identifying A Loss – The timing between when a loss occurs and when a claim or suit is filed can be a mystery. A professional may find out she’s being sued today for something that happened ten years ago. The potential for a huge time gap before a loss arises makes professional liability a very difficult type of business to underwrite and to price.

You have invested a lot in your business and your profession. It is important to be sure that you take the steps to deal with the special as well as the routine sources of loss. As usual, it is always a good idea to discuss your questions and needs with an insurance professional.