PRACTICING RISK TRANSFER IS SMART BUSINESS

"Risk transfer" means making contractors who work for you responsible for their own negligence and mistakes. For example, if you hire an installer to set a manufactured home for your customer, and a faulty installation results in damage to the house or injury to its occupants, you not only want the installer to fix the problem, you want them to protect you. Examples of independent contractors hired by community managers and retail centers include installers, transporters, a/c suppliers, electricians, tree trimmers, plumbers, landscapers, road maintenance companies, and home foundation companies.

Ensure that your contractors take care of you by putting yourself in a legally strong position. Here’s how to do it. First, make sure that you use written contracts with all your contractors. Contracts should say what you expect the contractor to do for you and should require the contractor to both defend and indemnify you in the event a demand is made by a third party due to the contractor’s work. Second, require that all contractors provide you with a “certificate of insurance” that names you as an additional insured on their general liability (and workers comp and auto, if applicable) insurance policy. Third, keep a file for all contractors that work for you that includes the contract and certificate of insurance for at least five years after the contractor ceases work for you. In the longrun, these business practices will save you a bundle of time and effort.

Updated on: 08/09/2008

STEALTH AUTO LIABILITY

Most of our manufactured home community and retail center operators don’t own a corporate vehicle or drive their own vehicles as a revenue generating part of their business. Nevertheless, most still have some auto liability risk. Examples include owners or employees using their own vehicles to go to the bank, pick-up supplies, take customers to see property, etc. Any accident involving either a company owned vehicle or a vehicle owned by another while being used on a company-related task will result in your company’s involvement in any resulting accidents.

You can manage this risk by doing the following things: First, limit who can drive on company business. You don’t want every Lloyd and Harry driving all over town under your corporate banner. People love to sue business owners. Second, make sure you have either a corporate auto insurance policy or hired/nonowned auto liability coverage on your general liability insurance policy.

Updated on: 08/09/2008

INSURANCE CLAIM CORNER

If you have replacement cost coverage and one of your insured manufactured homes is damaged due to a covered peril such as wind, hail, or fire, you should expect to be paid for the reasonable cost to repair your home less your insurance deductible. If you have actual cash value cost coverage, you would be paid for the reasonable cost of repair, less both depreciation and the deductible. If you are not happy with your insurance adjuster’s estimate, you should then seek an estimate by a third party. If the third party’s estimate is higher, contact your adjuster and go over the discrepancies.

Updated on: 08/09/2008

IT’S THE WINDY SEASON! WHAT SHOULD I DO?!?

First, take an inventory of all your property that could be damaged in a major storm (buildings, contents, signs, fences, pool houses, utility poles, equipment, tools, etc.). Next, compare that list to the insured property list provided with your insurance policy.

Updated on: 08/09/2008

SIMPLE STEPS FOR PLANNING FOR AN EMERGENCY

A recent report by a national small business council revealed that 80% of the small businesses significantly damaged by a major storm or other calamity that didn’t have a disaster recovery plan failed within a year of the disaster. As for those that did have a disaster recovery plan, only 20% failed. Here are five simple steps to creating a viable disaster recovery plan:

• Create a detailed key contact list. Include employees’ home and cell numbers, utility suppliers, your insurance company and agent, and key contractors such as debris removal companies, carpenters, electricians, and plumbers. Call and secure help right away;
• Document all your property and possessions with either pictures or a video. This information will be invaluable in the event of a major storm;
• Electronically back up all your computer data regularly. Keep the back-up media or tape off premise;
• Have a back-up place from which to operate. Many businesses now have mutual agreements to temporarily assist the other in the event one’s place of business is unusable for some time;
• Visit with your Account Manager to discuss the coverage you have and might need in the event of a disaster.

Updated on: 08/09/2008