Don t Leave Your Risk Home Alone During the Holidays

Transcription

1 Don t Leave Your Risk Home Alone During the Holidays Lockton s Risk Elves Prepare Safeguards Against Wet Bandits and Other Holiday Hijinks December 2015 Lockton Companies Twenty-five years ago, George H.W. Bush became President of the United States, Nintendo started selling the GameBoy, crowd surfing officially became a noun in the Oxford English Dictionary, and a gallon of gas cost 97 cents. Perhaps most notably, we were also introduced to what happens when a boy wishes his family would just disappear... and due to a counting error, that s exactly what happens. The adventures of the McCallister family when son Kevin is left Home Alone also illustrate some of the risks that businesses can face during the holidays. What was true 25 years ago is also relevant today. This hilarious film never fails to entertain with all of Kevin McCallister s shenanigans and the Wet Bandits mishaps. However, some of the funny scenes also bring about some serious risks that can arise during this holiday season. While families know not to intentionally leave their kids home alone over the holidays, it is also crucial that businesses don t leave their risks to fend for themselves either. CONTRIBUTING ELVES Shaylee Bushner Andy DiOrio Grace Hageman Holly Hepting Daniel Kusmin Sarah McKittrick Luke Norville Peter Rasmussen Mary Reed Jennifer Richey Nick Senta Cameron Van Dyke With acknowledgements to Home Alone (1990) A team of Lockton Elves have you covered with several solutions to help address possible risks when your business is closing down and is left home alone during the holidays. L O C K T O N C O M P A N I E S

2 #1 CLAIM SCENARIO Knock-knock. It s your friendly neighborhood police officer checking in on your safety this holiday season... or is it? In the chaotic evening before the McCallisters head out on their Parisian adventure, Harry, posing as a police officer advising homeowners to lock up, learns important information to help the Wet Bandits in their attempt to rob the McCallisters home. Just like Peter McCallister unwittingly gave private information to a seemingly trustworthy source, you too are at risk of divulging personal information. However today, unlike in 1990, many of our risks are exposures in the form of social engineering fraud. Social engineering fraud occurs when individuals, thinking they are complying with genuine requests, make an online payment to illegitimate sources. Many of these BEWARE OF SOCIAL ENGINEERING FRAUD instances now come disguised as too good to be true holiday deals that are exactly that. Spam s offering crazy discounts pose as reputable brands you know, but in fact they are online scams to collect information such as your address, your credit cards, or even your bank information. Coverage Applicable: Social Engineering Because of the growth in online transactions, the threat of social engineering fraud is greater now than ever before. However, in recent years there have been an increasing number of options in the market to mitigate these losses through insurance solutions. Social engineering fraud coverage can be endorsed onto the crime policy, and the standard limit for most markets is $250,000, with limits dependent upon clients internal controls. Peter McCallister is lucky he didn t live in today s age of increased cybercrime threats; otherwise, he would have been at risk to lose a lot more than just his home stereo system. 2

3 December 2015 Lockton Companies #2 CLAIM SCENARIO The holidays are upon us, and your refrigerator and pantry are filled and ready for the big family dinner. However, the last thing you want to do on Christmas Eve is cook a meal for your extended family like the McCallisters. So how about pizza? Unfortunately for the pizza delivery boy, ice, snow, and other winter conditions (oh, and inconveniently, placed statues) can be not only a nuisance but also an insurance risk. Coverage Applicable: Auto Liability In order to cover suits brought against you resulting from an employee driving their personal vehicle for business (such as pizza delivery), local businesses need to have the appropriate insurance coverage to respond in excess of the employee s personal auto policy. Often, clients will use limits of $1 million to cover liability and physical damage to third parties for $1 MILLION LIMIT IS COMMONLY USED FOR AUTO EXPOSURES their auto exposures. Don t leave your employees out in the cold making those winter deliveries; be sure your insurance is in the holiday spirit with generous limits and an endorsement to include employees as insureds on your policy. #3 CLAIM SCENARIO Kevin is enjoying his time home alone eating a healthy hodgepodge of marshmallows, ice cream, and chocolate syrup. Unbeknownst to him, lurking in the corners are the mischievous Wet Bandits. To their surprise, they run into a more-than-capable 4-foot-2-inch, extremely cute security guard named Kevin McCallister. The rest of the neighborhood was not as fortunate as the McCallister home, and their assets were taken. Adequate theft coverage will be necessary for these families and your business as you shut them down for the holidays. Coverage Applicable: Theft The Wet Bandits could do a load of damage to the beautiful McCallister home. Property coverage will assure the family they have coverage for their stolen items. The theft limitation will provide up to $2,500 for their watches, furs, and jewelry. Knowing the McCallisters, this will not be enough. To make sure their assets are fully protected, they will need to find coverage elsewhere. This is where Lockton s experts would recognize the McCallisters need a commercial articles coverage form added to their package policy. This ensures the family will have a wonderful claim result even though they left their 8-year-old son 4,130 miles away. 3

4 #4 CLAIM SCENARIO It was a cold, winter day when the Wet Bandits broke into the McCallisters neighbors house. Not only did they rob the house, they made sure to leave behind their signature calling card: stuffing a towel in the kitchen drain and leaving the water running to flood the house. Coverage Applicable: Vandalism What can happen to your business when you close for the holidays? Criminals, like the Wet Bandits, may take this opportunity to vandalize your property. Vandalism is commonly covered by business and personal property policies up to the policy limit. WATER DAMAGE LIMITS SHOULD BE IN LINE WITH BUILDING AND PERSONAL PROPERTY LIMITS Additionally, pipes can freeze and burst, and drains can back up to flood your house or business. Many policies exclude coverage for these kinds of losses. Business and personal property policies exclude coverage for water leaking from pipes caused by freezing unless you maintain heat in your building or shut off the water supply. All businesses can benefit from buying back backup of sewers and drains coverage on their property policy. Not only do these provide coverage for water damage risks when you are home, they also provide coverage when your business is left home alone. You will want to make sure that any property that could be damaged by frozen pipes bursting or drains backing up is insured. Limits for both of these coverages should equal your building and personal property limits. For example, if your building and personal property limits are $2 million, you will want to have coverage with limits up to $2 million. 4

5 December 2015 Lockton Companies Tis the season for slips and trips. #5 CLAIM SCENARIO After one too many glasses of eggnog, or even none at all, a last-minute customer expedition to get a toothbrush approved by the American Dental Association, or Harry and Marv coming to fix your plumbing, $5,000 TYPICALLY COVERS MEDICAL PAYMENTS FOR SLIPS AND TRIPS can turn into a not-so-merry-christmas lawsuit after they fall on your premises. Winter weather conditions produce frequent ice accumulation, and regardless of how often Old Man Marley throws salt on the sidewalk, you still run the risk of being held liable. Coverage Applicable: General Liability When a customer is injured on your premises, the general liability policy can respond and pay medical payments regardless of fault. This Christmas gift promotes goodwill on your behalf, in an attempt to avoid lawsuits. Medical payments are limited per person typically up to $5,000, but may be increased. In the event that a lawsuit does ensue, there is applicable coverage for defense costs and bodily injury for which you may be held liable. The combined amount of bodily injury and medical payments are subject to an each-occurrence limit shown in the policy. However, the cost for legal defense against a claim or suit is typically outside the limits of insurance and will be covered until each occurrence limit is exhausted in the payment of judgments. Keep in mind, you may want to foil a burgling attempt by icing the steps, but if the act is intentional, you may be paying out of pocket. CONCLUSION The holidays can be enjoyable, but can they also be treacherous if they involve burning the top of your head with a blow torch, smashing your face with an iron, being knocked out by a paint can, or driving a nail through your foot. Businesses cannot always count on Old Man Marley from next door to arrive just in time with his trusty shovel to knock out the Wet Bandits or eliminate your risk. However, these types of coverages can provide you with the right options to ensure your risk is never left home alone during the holidays. 5

6 Our Mission To be the worldwide value and service leader in insurance brokerage, risk management, employee benefits, and retirement services Our Goal To be the best place to do business and to work RISK MANAGEMENT EMPLOYEE BENEFITS RETIREMENT SERVICES Lockton, Inc. All rights reserved. Rev. 07/28/15 g\white paper\2015\holiday parody\holiday pardy-dec15.indd#13927