Author Archives: heinchon

Technology makes doing business easier, but what are the risks?

It is hard to believe how anything in business got done without today’s technological advances.  In the past we had to rely on the US Mail, phones and more recently, the fax machine to get information from one person to another.  Now in the age of instant communication, we have email, text messages and the ever important Facebook post to get our messages across.

With all the advances in technology, we are able to get more done in less time, and in many cases, with fewer people, than ever before.  While our technology changes and improves, have you kept up with the new risks your business faces?  

A phrase that comes up with increasing frequency is “Cyber Liability”, but what exactly is that and should you as a business leader be concerned?  Cyber Liability is essentially the exposures faced by companies from their online activities.  Once thought to be only needed by the “dot coms” of business, any company that routinely uses the internet as a business tool has new risks for loss such as:

  • A hacker breaking into your network and stealing sensitive customer information
  • A virus on your computer network shuts down your operations, leading to a loss of revenue
  • An employee posts negative comments about your biggest competitor on Facebook and you are sued for defamation of character

Evaluating exposures to loss and developing a plan to mitigate the risk is a critical service that Texas Associates Insurors provides for our clients.  Insurance policies may be a big part of your overall risk management plan, but if those policies haven’t kept up with the changing times, you may be more exposed than you know.

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What is your Work Comp Experience Mod telling you.

For most companies, Workers Compensations Insurance is the largest expense in their overall Insurance Budget.  Most feel that there is nothing they can do to lower their Work Comp premium short of letting employees go.  They rely on the old, tired expression, “it is what it is”. 

A big factor in calculating the final price of a Work Comp policy is the Experience Modification Factor, also know as “The Mod” or “The Ex-Mod”.  In Texas, most companies go through a process called “experience rating”.  Experience rating is a mathematical analysis of a company’s payroll and losses which result in a number called the “Experience Modification Factor”, the higher your mod, the more premiums you pay, and of course, the lower your mod, the less premiums you pay.  For example, if a company has a mod of 1.20, in calculating their final premium a 20% additional charge will be added.  Conversely, a company with a mod of .80, in calculating their final premium, they will see a 20% reduction.

While most of us would rather not get involved with the math behind the experience rating formula, it does contain some important concepts that business owners and managers should understand.  

The basic math in calculating your mod is taking your actual losses and comparing them to your expected losses.  The more your actual losses are compared to your expected losses, the higher your mod. 

Actual losses are the claims your company actually files with insurance company.  Expected losses are determined by statistics reported by insurance companies to an organization gathering workplace injury data.  This injury data is then used to determine what a company is expected to pay in employee injury claims for a particular class of employee.  Expected losses are obviously higher for construction workers than they are for office workers. 

If your  mod is 1.0, this means your actual losses are the same as your expected losses.  While some may feel this is the perfect score, it in fact means that your company is average.  It is like getting a “C’ on your report card or shooting par on the golf course.  You may be pretty happy with this but it is still only average.

Just like improving your report card from a “C” to an “A” or your golf score from par to under par, to improve your mod from 1.0 to something lower, you’ll have to take some additional steps.   Analyzing your claims to determine what is causing your losses is a great first step.  Once you understand what is happening, then you can take additional steps to improve your situation through loss control and loss prevention activities.

Texas Associates Insurors has the professionals with the unique tools to help you understand your Work Comp Experience Mod and put you on the road to improving it.  Contact us now to get started.

Condominium Insurance

One can hardly miss the dramatic changes the Austin Skyline has seen in the last 5 years.  Most, if not all, of the towering buildings erected in that time have been condominium projects.  Developers must have done their homework and decided more people are going to be moving to these types of developments, rather than the traditional single family home.  I wonder if those moving to these developments understand the different insurance needs they will have. 

With a condominium, the condo association purchases a master policy that covers your unit’s building, common areas and the unit owners’ collective liability.  However, this policy does not provide protection for the following:

  • Your personal belongings in and around the unit
  • Your personal liability in the event of a lawsuit
  • Your improvements to your unit
  • Additional living expenses if you have to move out during repairs

Some additional options for you to consider:

  • Personal Articles – your high valued items, such as jewelry, furs and collectibles
  • Loss Assessment Coverage – pays your share of an assessment charged against all unit owners after a covered loss under the association master insurance policy

Another concern is how a condo association defines what property is the association’s and what property is a unit owner’s.  The condo by-laws and condo association declarations will spell out, in great detail, what each party is responsible for.  These documents can be confusing and difficult to understand, and you will need some help to make sure that, when you buy your own insurance, you are protecting all you own in your new unit.  Your Trusted Advisor, like those at Texas Associates Insurors, can help you navigate this dangerous area and help protect your investment.

If you’re thinking about owning a piece of the new Austin Skyline, call our office first so we can discuss solutions to the personal risks you may face.