hm - Aug13 - cover.indd - National Hardwood Lumber Association

INSURANCE
CORNER
COVERING THE NECESSITIES
By Kevin Mershimer, Regional Manager for Lumbermen’s Underwriting Alliance (LUA)
Presenting Sponsor
of the 2013 NHLA
Annual Convention
& Exhibit Showcase
Welcome to the Insurance Corner! The Insurance Corner will attempt
to answer questions concerning business insurance related topics and
how best to handle them.
The first topic of discussion is sparked by NHLA Vice President, Pem
Jenkins of Turnbull Lumber who asks the question, “What coverage
does my business need”
Unfortunately, every insurance related question usually is returned
with the same answer, “It depends”. Every business is unique and
every company is engaged in a variety of activities to generate income
including: installation, renting warehouse space, hauling goods for
others, etc. The question is best answered by an insurance agent very
familiar with your particular operation. However, I can explain the
standard insurance policies (while not all encompassing) that cover most
companies and give a general overview of what each one covers.
Excellence
in every drop
Coverage Needed
1. Property – Property covers loss to buildings and contents of the
buildings listed on the policy. There are things that are covered such
as: inventory, buildings and contents and there are perils that they are
covered for such as: theft, fire, lightning, wind, etc.
a. Boiler – While a company may not have a boiler, boiler/
equipment breakdown coverage may still be desired. With many
of today’s machines being computer aided, the breakdown of
HVAC units is costly to repair, especially without insurance
coverage. This also covers explosion of pressure vessels and
damage from electrical surges.
b. Business Income – This coverage provides payment for ongoing
expenses and any profits the business was making while the
company was out of business from a covered cause of loss to the
property. Off-site utilities can also be elected in case of loss of
power to the property, again from a covered cause of loss.
c. Stock in Transit – This covers stock on company vehicles while
being shipped. Usually included in the property program, but
limits and deductibles vary.
i. Product that is hauled by one company on behalf of another
for a fee (example; backhaul) needs to be endorsed to the policy.
d. EDP – Covers costs associated with computer systems and
installation. Some policies even cover viruses and server issues
with a lower deductible than the property deductible. Electronic
data processing is sometimes a throw-in under the property form,
but usually carries the property deductible with relatively low limits.
A separate EDP policy is suggested.
e. Inland Marine – Coverage for work or materials away from the premises.
i. Installation Floater: Materials and work performed at the job site.
ii. Tools Floater: Tools that leave the property
iii. Mobile Equipment: Forklifts, loaders that leave the property.
These can also be covered under the business personal
property, but carry the property deductible.
2. Casualty coverage – The following coverage refers to damage to
third parties or employees.
3. General Liability
a. Covers the operation from injuries to the general public. For
example: Slips and falls on the parking lot, log yard, etc.
b. Covers the business from issues arising from work conducted.
For example: Cabinets that the company installed fall and
hurt someone.
c. Covers the business for injuries caused by a product the business
manufactured. For example: A defective rocking horse hurts a
small child. (The business may just be a supplier to the
manufacturing co.)
d. A business may need a logging and lumbering endorsement,
which is often excluded.
16 AUGUST 2013 HARDWOOD MATTERS WWW.NHLA.COM