Four little letters – EPLI – cover a huge range of very serious issues. EPLI stands for employment practices liability insurance and deals with wrongful termination, discrimination, sexual harassment, and other workplace situations.

It’s one of the fastest-growing legal issues. In 2016 the Equal Employment Opportunity Commission (EEOC) helped U.S. employees receive $482 million in discrimination compensation alone. And, in the years since some major Supreme Court decisions and lawsuits are on the rise overall.

Here are five things you need to know about EPLI.

SEE ALSO: What is Cyber Liability and Data Breach Coverage?

1. It’s not just a big business issue.

Any business with at least one employee should be concerned about employment insurance. A small or family business owner might think, “We don’t need insurance. We’re a family here.” But huge employment issues can be triggered by the smallest of incidents. Imagine having to let someone go simply because it’s your slowest time of year. If they allege that the reason was discrimination, you’re facing a costly legal battle. Remember, you don’t have to be in the wrong to be sued.

2. Many lawsuits are over new definitions of discrimination.

The EEOC’s official statement of enforcement and litigation data explains that discrimination occurs in “both overt and subtle forms.” Subtle forms can be harder to detect or exist outside earlier definitions of discrimination. Most people are aware of discrimination based on race, sex, age, religion, and national origin. Claims are increasing in newer areas like equal pay, gender affiliation, retaliation, disability, and genetic information.

3. Courts are expanding who can sue.

A 2011 Supreme Court decision widened the definition of who can sue for employment discrimination, ruling that a former employee could sue for retaliation against his fiancee. This came on the heels of a 2006 decision that included “adverse action” as prohibited employer behavior. This means an employee can sue for discrimination not just after being fired or demoted, but for more nuanced things like being denied the most profitable clients.

4. The average lawsuit costs $235,000.

Even in cases where the lawsuit is unfounded, it can be extremely expensive to deal with. Small and mid-size businesses might not be able to survive the financial hit. The EEOC found that the average cost of fighting a discrimination case was $235,000 during a year that saw the largest number of cases in the agency’s history.

5. Your policies affect your insurance premiums.

When you contact an insurance agent about EPLI, they’ll run a risk analysis and take some basic factors into account: type of business, geographic area, employee count, industry. But did you know your own employment policies are also a contributor to your overall cost? If your policies are lax, that creates risk. Risky businesses are more expensive to insure. Make sure you have an employee handbook, ethics code, anti-retaliation policy, and ongoing training on workplace policies.

SEE ALSO: 7 Signs Your Business Insurance Coverage is Lacking

It’s all a lot to think about. That’s why EPLI coverage can bring such peace of mind. Your insurance company can not only cover you if there’s a lawsuit, but also guide you toward company policies that will help prevent legal action in the first place. Click here to get a free quote. 

This article examines these smart home technologies, beginning with an overview of the Internet of Things (IoT). Included within this concept will be topics such as upcoming loss-control devices in the home, additional homeowners coverages we might see in the future, the pitfalls of smart homes, and overall housing risk management and insurance implications.

Our world is rapidly transforming due to the astonishing exponential growth in technology. This growth has myriad applications to the future of personal lines insurance. It is the driving and inexorable force behind the growth in smart or intelligent homes and autonomous or semiautonomous cars. While this lightning-fast technology is racing ahead, the legal and insurance issues are struggling to keep up.

The article will then pivot to smart auto technologies (i.e., semiautonomous and autonomous vehicles), looking at the approaches that various organizations and countries are taking in this revolutionary advancement, an overview of the different stages or generations of these vehicles, and a look at the societal, personnel, risk management, and insurance implications we will see down the road.

Smart Home Technologies

A smart home is one that is “equipped with lighting, heating, and electronic devices that can be controlled remotely by smart phone or computer.”1 An individual could thus contact his smart home on a cold and wintry day via his smart phone before leaving work to verify that his home’s indoor temperature is 72 degrees, the curtains are closed, the dinner is piping hot upon his return, and a healthy gas fire is roaring.

A smart home is inextricably linked to the IoT. This term deals with the concept of “basically connecting any device with an on and off switch to the Internet (and/or to each other).”2 Each object would have its own IP address and embedded computer chips. These chips will be ubiquitous in the home and perhaps as cheap as a sheet of paper (1 cent each) in the coming years.

Cisco projects that there will be over 50 billion connected devices in the world by the year 2020, which is about 6.6 connected devices per person (world population projected to be 7.6 billion that year).3 So, connected items will abound in the home of the future.

Home owners will need to properly anticipate and evaluate the profound implications from the IoT in the future. One key trend will likely be a reduction in loss frequency for homeowners policies. If houses are full of sensors and online devices, the communication between the house and the home owner will multiply. And this communication will reap huge dividends in the form of effective loss-control devices in homes, as illustrated below.

LOSS-CONTROL DEVICES IN FUTURE HOMES
Device Description
Water Leak Protection Water sensors that can detect water leaks in the home and immediately contact the owner and any predesignated plumber; these devices will be able to also shut off the main water supply.
Theft Protection Biometrics (e.g., fingerprints) and sophisticated motion sensors can immediately stymie or detect a would-be burglar.4
Fire Protection State-of-the-art smoke and fire detectors automatically alert the owner via smart phone that something is amiss at home.5
Ground Sensors A community exposed to mudslides may have ground sensors embedded in the surrounding landscape, providing smart phone alerts to individual community members.6
Nanotech Roofing Materials Carbon nanotube composite materials (still in early development) are over a hundred times stronger than steel and much lighter than traditional roofing materials; they could be nearly impervious to hail.7
Fortified Homes Utilizing superior and advanced engineering, building materials, and standards, future homes will be extremely resistant to hail, high winds, and hurricanes. 8

Another expected trend will be the growing prominence of various tech gadgets, such as domestic robots (dobots) and 3D printing. In addition, more energy efficient homes (think solar panels that interact with a smart grid) will be more prevalent in the next 20 years.

Note, however, that the decrease in loss frequency will be partially offset by an increase in loss severity (particularly in the early years of this transformation) due to the high cost of smart features in the home.

As a result of these trends, homeowners insurers will need to offer a host of new coverages, including the following.

  • Cyber-coverage for automated homes with more extensive loss of use coverage
  • Products liability insurance for 3D printing operations gone awry
  • Specialty inland marine endorsements for dobots
  • Various smart home and green home upgrade endorsements

In addition, homeowners insurers of the future, with this type of high-tech monitoring, will be able to constantly observe their risks with ubiquitous sensors rather than the traditional one-time initial inspection.

Yet these fully Web-connected homes are not without their pitfalls. The law of unintended consequences is alive and well when it comes to technology advancements. With this complex technology comes the risk of hacking, bugs, and incompatibility problems. There are fire dangers associated with state-of-the-art solar panels. Yet many experts believe the pros (e.g., reduced claim frequency) of this exciting and dynamic technology will outweigh the cons.

Smart Auto Technologies

Semiautonomous autos and autonomous autos are now on the scene, although many of the features are in the embryonic stage. Many countries are working on this technology, including the following.

  • China
  • Germany
  • Greece
  • Japan
  • Netherlands
  • Singapore
  • Switzerland
  • United Kingdom
  • United States 9

So, what are driverless cars, and what is the difference between an autonomous car and a semiautonomous car? The best way to explain the technology and to differentiate the two is by reviewing the National Highway Traffic Safety Administration autonomous vehicle classification system. 10

  • Level 0: The driver completely controls the vehicle at all times.
  • Level 1: Individual vehicle controls are automated, such as electronic stability control.
  • Level 2: At least two controls can be automated in unison, such as adaptive cruise control in combination with lane keeping.
  • Level 3: The driver can fully cede control of all safety-critical functions in certain conditions (bright, sunny day). The car senses when conditions require the driver to retake control (e.g., powerful thunderstorm or large canopy of trees) and provides a short transition time for the driver to do so.
  • Level 4: The vehicle performs all safety-critical functions for the entire trip, with the driver not expected to control the vehicle at any time. There is no option for human driving; thus, this level could include unoccupied cars.

The incremental approach (e.g., evolving from level 0 to level 2 to level 3) is favored by traditional auto manufacturers, such as Ford, whereas the “ground up to fully autonomous” approach (going directly from level 0 to level 4) is favored by Google.11

The early research indicates that semiautonomous cars are significantly safer than standard autos and that autonomous cars are safer than semiautonomous cars since the autonomous components eliminate driver errors, the cause of over 95 percent of automobile accidents. A variety of auto manufacturers and high-tech companies believe that fully autonomous cars will be available anywhere from 2018 to 2025.

What are the possible implications for society and for personal lines auto insurers in the next 5 to 20 years? The Eno Center for Transportation reports that if 90 percent of the cars in the United States were autonomous, over 4.2 million accidents could be avoided. This scenario could possibly save nearly 22,000 lives per year in the United States alone.12 Barclays PLC predicts that driverless cars could reduce vehicle ownership by 40 percent by the year 2025.13 ABI Research projects that 400 million people in the world will rely on robotic car sharing by 2030.14

With these possible societal changes and safety improvement projects, how will the legal, insurance, and liability issues evolve? Currently, Google and Volvo are assuming the liability for accidents caused by their autonomous cars.15 But, if the accident was caused by a faulty software algorithm (written by one of the auto manufacturers contractors), a multitude of lawsuits could easily ensue.

The implications for personal auto insurers arising from these trends is hazy. They do suggest, however, a dramatic decrease in auto insurance premiums and losses in the next 10 to 20 years. The auto insurance underwriter (likely to be an expert system powered by artificial intelligence and machine learning) will focus on insuring the software and hardware of the automobile, rather than the driver. Indeed, in the year 2030 for example, there may be an extra premium if you want your teenage son or daughter to drive your Porsche, as opposed to letting the autonomous features operate the vehicle. And advances in technology will likely reduce the need for underwriters and claims personnel as well, putting further pressure on lower premiums.

Conclusion

The smart homes and the autonomous automobiles on the horizon promise transformative upheavals to the future of personal lines insurance in the area of loss frequency, loss severity, property monitoring, reduced auto ownership, increased car sharing, reduced premium, and human resources/technology shifts. Can personal lines insurers keep up with the unstoppable and inexorable technology curve? How personal lines insurers ultimately deal with these inevitable forces will be fascinating to behold. And it reminds us of Albert Einstein’s captivating quote regarding the future: “I never think of the future—it comes soon enough.”


Oxford Dictionary Online, s.v. “smart home,” accessed January 27, 2017, https://en.oxforddictionaries.com/definition/smart_home.

2 Jacob Morgan, “A Simple Explanation of ‘The Internet of Things,’” Forbes, May 13, 2014.

3 Dave Evans, The Internet of Things: How the Next Evolution of the Internet Is Changing Everything, Cisco Internet Business Solutions Group, April 2011.

4 Stephen Mayhew, “Incorporating Biometrics into Your Home Security System,” Biometric Update, May 14, 2012.

5 Product page for Nest Protect, Nest, 2017, https://nest.com/smoke-co-alarm/meet-nest-protect/.

6 Janna Anderson and Lee Raine, “The Future of Smart Systems,” Pew Research Center, June 29, 2012.

7 “Carbon Nanotubes Twice as Strong as Once Thought,” American Chemical Society, September 15, 2010.

8 Product page for FORTIFIED Home program, Insurance Institute for Business and Home Safety, 2017,https://disastersafety.org/fortified/fortified-home/.

9 Charlie Kingdollar, Emerging Issues, General Reinsurance Corp., November 2015.

10 “U.S. Department of Transportation Releases Policy on Automated Vehicle Development,” US Department of Transportation, May 30, 2013.

11 Kingdollar.

12 Daniel Fagnant and Kara M. Kockelman, Preparing a Nation for Autonomous Vehicles, Eno Center for Transportation, October 2013.

13 Keith Naughton, “Driverless Cars May Cut U.S. Auto Sales 40%, Barclays Says,” Bloomberg Technology, May 19, 2015.

14 “New Car Sharing Economy Disrupts Automotive Industry: ABI Research Predicts 400 Million People To Rely on Robotic Car Sharing by 2030,” ABI Research, March 14, 2016.

15 “Who Is Responsible for a Driverless Car Accident?,” BBC News, October 8, 2015.


Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author’s employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

Written by:  Robin Olson, CPCU, CRIS, ARM
Personal Lines Insurance
February 2017

 

Renters insurance comes in handy when the unexpected happens. From a house fire to a break-in, it’s important to know that your personal items are covered when it matters most. What’s more, covering your potential liability is equally as crucial. If you’re sued because of negligence or something completely out of your control, like a party guest breaking an ankle in your driveway, renters insurance can be your saving grace. Many insurance companies offer substantial coverage at an affordable rate, but there are still several things to consider before starting a policy. As a licensed insurance agent, I’ll share answers to five common – yet critical – questions about renters insurance. Your renters insurance checklist:

1. Who needs renters insurance?

Most landlords require proof of insurance before a new tenant moves into a home or apartment; making renters insurance a foregone conclusion in most cases. Since you aren’t buying the place you’re moving into, the property owner wants to make sure that you will be able to pay for any damage that may occur while you’re occupying their space. A wild party or overflowing sink can cause significant damage to a structure, which can lead to astronomical repair bills that most renters just can’t cover out of their own pockets. Requiring renters insurance is the easiest way for a property owner or landlord to ensure that their investment is covered if the tenant causes major damage during the lease. This means that the tenant’s liability is covered, as well.

Even if you find yourself in a living situation that does not require renters insurance, maintaining coverage is still a good idea. If you are a dog owner, for example, your furry family member can open you up to a significant risk of a lawsuit if they were to bite someone. The truth is that all dogs bite, no matter how docile, and this fact alone is a prime reason to cover your liability. The same can be said for children, who are your responsibility wherever they may go until they become adults. When you begin to realize how much exposure you face on a daily basis, it’s not difficult to comprehend the value of protecting yourself against a lawsuit.

renters insurance for apartment

2. Are all renters insurance policies the same?

Nope. Outside of liability, it’s also important to cover the items you’ve spent hard-earned money on to fill your home. If you were to lose everything in a fire, would you be able to replace all of your personal property out of pocket? The answer for most people is a definitive “no.”

While renters insurance does provide coverage for personal property, it’s important to understand how you would be compensated in the event of a claim. You choose the amount of personal property coverage on your policy so you need to have an understanding of how much money would be required to replace your belongings in the event they are damaged or stolen.

Renters policies cover personal items in one of two ways: actual cash value (ACV) or replacement cost.

  • Replacement cost coverage means that your policy would pay to replace your items (like a camera) with a new, comparable version.
  • Actual cash value takes depreciation into account so the amount you receive in the event of a claim depends on the age or condition of the item (the same way your car insurance company would value your vehicle in the event of a total loss).

The main thing that consumers need to understand about the two valuation types is that replacement cost policies generally cover your items at a higher amount than one that uses ACV. The premium for a replacement cost policy is a bit more expensive, however, so it’s important to consider how much it would take to replace your personal items before you decide which option is right for you.

3. Should you make an inventory of your personal items?

Renters insurance allows the flexibility for you to choose the amount of coverage for your personal property. In the event of a claim, though, you will have a much easier time getting compensated for the things you lost by having an inventory of your belongings.

Without proof of exactly what you had before incurring a loss, your insurance company may not agree to cover all of your personal property.

What’s the best way to inventory your property?

I recommend a multi-faceted approach. It is impractical to save every receipt for every purchase you make; storing receipts can be cumbersome and there is a risk that they could be lost in the event of a fire.

A simple fix would be to snap a picture of your receipts and save them to a Google Drive or Dropbox. This also allows you to access those receipts from any device with internet access even if the original is rendered unusable. And for items which you no longer posses a receipt, taking a video of your belongings makes them easily identifiable. It’s also a good idea to update the video or pictures of receipts and personal items as you add them.

making a renters insurance checklist

4. What other coverage does renters insurance include?

Medical

Medical coverage is offered on most renters policies to pay for injuries that a guest may suffer at your residence.

Imagine your friend trips on your lawn during your backyard BBQ and breaks his leg. Ideally, your guest won’t want to file a lawsuit against you, but he probably doesn’t want to pay for expensive emergency room bills either.

Fortunately, the medical coverage on your policy will normally pay for those costs as long as this person isn’t a member of the household. This can help your friend avoid having to pay the deductible on his medical insurance and also help you avoid a potential lawsuit.

Loss of use

One last coverage that renters policies offer, and one of the most important in my opinion, is loss of use. Also referred to as “additional living expense” coverage, loss of use is intended pay for expenses that arise when you aren’t able to stay in your home or apartment after a covered loss.

If you suffer a fire or a break-in, you may not be able to stay at your residence until repairs are made. Loss of use coverage pays for things like hotel stays and even food expenses if your place becomes unlivable due to a covered loss. This coverage can vary by provider so it’s a good idea to account for an extended stay when determining how much coverage is right for you.

5. What makes renters insurance more or less expensive?

  • A cap on certain categories of personal items: While your belongings are generally covered by renters insurance, it’s important to note that certain pricier items, like jewelry, golf clubs, or other collectibles, have a cap on the amount you can claim after a loss. If you own high-dollar items, it’s a good idea to ask your agent about how this policy would protect those things if you file a claim.
  • Sharing a policy with a roommate: Sharing a policy might split coverage in half, but you should consider having each renter living in the same residence maintain his or her own policy to avoid a decrease in coverage limits. This is especially true if you have some of your own expensive items to cover as previously mentioned.
  • Your deductible: Just like with car insurance, a personal property claim is subject to a deductible. While a higher deductible will result in lower rates, the difference in premium is often not significant and you need to make sure you can easily afford to pay it if you have to file a claim.
  • Your dog: However unjust this may seem, insurance companies do discriminate against certain dog breeds because of the potential liability exposure. It’s a good idea to mention the breed of your dog(s) to your agent so they can quickly let you know whether or not they can insure you with a specific company. Lying about the breed of your pet simply to procure coverage can lead to a denial of a claim, especially if your dog is involved.

First and foremost in your renters insurance checklist is the answer to whether or not you should have it, and the answer (whether you’re required to carry it or not) is a resounding “yes.” The potential benefits far outweigh the costs, and the peace of mind alone can make the cost of the policy worth it.

Not all renters policies are the same so it’s important to ask the agent providing a renters insurance quote as many questions as necessary to make an informed decision. The worst time to find out that you aren’t covered is after something serious has happened.

And as always, shopping with as many companies as possible will result in the best coverage at the best rate.

We’ve all experienced it…you come around a corner, or turn onto a street, and you see it…too late…a POTHOLE!

You brace for impact as it rocks your body and your car…ouch!

As roads go through a constant process of freezing, thawing and heating up, and then freezing again through the year, it leads to cracking, and when you add water to the mix, it’s a perfect recipe for potholes.

It’s bad news for cars, though, because potholes can damage your tires, wheels and even your suspension. Here are some tips on how you can avoid them or at least minimize the damage – as well as what to do when you can’t.

Steering Clear of Potholes
According to the Michigan Department of Transportation, the best way to avoid hitting potholes is by using common sense:

  • Drive at safe speeds so you have time to react.
  • Keep your car in good working order.
  • Look out for puddles, which can hide potholes.
  • Take particular care at night, when it’s harder to see.

Never swerve suddenly into an occupied lane to avoid a pothole, however. That can create an even worse situation than driving through a pothole in the first place.

What if You Can’t Avoid One?
Sometimes you just don’t have a choice – you’re going to have to drive through a pothole. The Michigan DOT recommends slowing down as you approach the pothole, then letting off the brakes before you hit it. This helps your vehicle absorb the impact better. And take the pothole with your wheels straight, because hitting it at an angle can cause additional damage.

Even if you have to hit a pothole, having a well-maintained car can lower the likelihood of damage. So keep your tires inflated properly, and make sure your suspension and steering are in good shape, too.

Who Pays for the Damage?
Okay, so you’ve hit a pothole. Is your car damaged? If it feels different when you drive it (for example, pulling to one side), or you can see that your tires or wheels have been affected, get the car checked out.

The good news is, you probably won’t have to pay for repairs – or the full amount, at least – if you have collision coverage. That typically will cover pothole damage, subject to your deductible. But you should check with your independent insurance agent to discuss your specific situation.

Prevention is the often the best medicine – and that holds true for the damage potholes can cause. So use caution on the roads, be on the lookout for hazards, and follow the tips above to minimize the impact potholes have on you this season!

Home improvement: It’s a never-ending process for many people, and for those of us who aren’t necessarily handy, it can be a hassle, too.

But there are plenty of simple maintenance tasks and other improvements you can handle to make your home safer – whether you’re handy or not. And you won’t have to break out the power tools (or any tools at all in some instances) or worry about getting in over your head.

Water Works
You need running water in your home – but not water running in your home, if you know what we mean. Even minor leaks can cause major problems, from higher water bills to damage requiring costly repairs (maybe even the kind you can’t tackle yourself). Here are some easy ways to make sure your water stays where it should:

  • Check your appliances. They’re the most common source of water leaks in homes, so it’s worth taking a look at least once a year to check for problems. And the hoses that come with your washer and dishwasher can mean big trouble – they break down over time. Look for kinks and cracks, and replace if needed. Consider using reinforced hoses, too; those with steel braiding or mesh won’t hold up forever, but they’re stronger than rubber or plastic.
  • Watch the pressure. Water pressure that is set too high can cause pipes, hoses and water lines to leak or burst. Inexpensive gauges are available at home-improvement stores to test your pressure.
  • Consider installing water sensors. These can alert you to a leak or other problem soon after it occurs – some can even send messages to your smartphone.

Keep Your Family (and Your Guests) On Their Feet
Millions of Americans – many of them older adults – are injured in falls each year. About 2.5 million were hurt in 2013 alone, according to the National Safety Council and the Centers for Disease Control and Prevention. Look around your home. Should you make some of these fixes?

  • Reduce clutter. Everything from small pieces of furniture to area rugs can pose a hazard, so make sure they’re in appropriate places and out of the way if possible.
  • Add stability to stairs. Make sure stairways have sturdy rails, and maybe even non-slip strips, particularly outdoors.
  • Let there be light. It’s hard to walk safely when you can’t see obstacles or potential trouble spots. Make sure your home is well-lit, and don’t forget night lights, too.

Give Everyone Some Air
Pollution isn’t just an outside thing – the air in your home can be unhealthy, too. But helping people breathe a little easier isn’t hard when you follow these steps:

  • Test the air (and your detectors). Make sure you have working carbon-monoxide and smoke detectors and test them regularly. Also, consider testing your home for radon, a naturally occurring radioactive gas that can be dangerous over time.
  • Check your filters and ducts. Keeping your furnace filter and air ducts clean will keep your air cleaner as well. And consider adding some of nature’s air filters: plants.
  • Keep your home clean. Dust doesn’t just build up on the furniture – it ends up in the air as well. Regular cleaning means cleaner air (just be sure to use safe products).

Home improvement doesn’t have to mean a kitchen remodel or finishing the basement. Making your home safer, in fact, just might be the best improvement of all.

For a no-cost, no-obligation quote, contact us here.