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  1. Eat Dessert First

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    By Ken Hager, COO

    My father used to tell us all of the time, “Life is uncertain; eat dessert first.” As kids, we really didn’t understand the meaning behind those words, but we were willing to embrace them no questions asked! Mom, however, had other ideas and said your father is talking about an idea, a principle, that you’ll understand someday.

    As I approach the 40th anniversary of my high school graduation, I understand the concept completely. I was talking with a fellow graduate recently, and he was telling me they were looking to have a banner made up in honor of all those who have passed too soon. “Ken, you wouldn’t believe how long that list is and some of the names on it.” Unfortunately I would and do, as I have come to understand the concept many times over in the recent past.

    Most recently, my best friend Joe DeFino passed away from ALS, more commonly known as Lou Gehrig’s disease. Awareness of this disease was raised with the Ice Bucket Challenge in 2014. When that challenge started, neither Joe nor I had any idea of the impact the disease would have on his life, eventually taking it. Joe was an avid outdoorsman who loved camping, hanging around a fire pit, and competing in 5K charity runs. Joe handled this disease with grace and a certain determination to get the most out of life while he still could.

    For Joe, life was certain. He knew he had a very limited time to enjoy everything he loved one last time. I took him to one last Yankee game, twice to see a Grateful Dead tribute band and to local parties around the neighborhood. We went to the Jersey Shore and the restaurants along the shore. With every trip we took, I realized that, for him, this would more than likely be his last time doing something that he loved.

    His friends and I arranged to continue our annual camping trip the week before Thanksgiving and to modify our activities to meet his needs. Joe went the first year with leg braces and a cane and sat around the fire pit laughing and singing along with his friends. We eliminated the Saturday afternoon hike, but otherwise, we did all the usual things, and Joe made his infamous Dutch oven peach cobbler dessert. The next year, he and his friends were determined to allow him to enjoy one last trip, and we moved from tents to cabins and took him in his hospital bed and wheelchair. It was hard to fathom how quickly he had deteriorated over a year’s time. The third year was this past November, and he was no longer capable of going no matter how hard we tried.

    Joe’s passing and his limited time to enjoy the things he loved all of his life made me think often of my dad’s words, “Life is uncertain; eat dessert first.” What he was telling us was that for most people, you don’t know when your time will come.  The end can be swift and unrelenting or slow and agonizing. Don’t wait until it’s too late to make time for the people you love or the things that you love to do. Enjoy the little and the big things every day, take a moment and reflect on the good and bad things in your life and celebrate the good.

    It’s all too easy to get caught up in life, in the addicting passing of time, in staring at your phones or tablets or television or other distractions. If you find yourself in a panic because you left your cell phone home and feel disconnected from the world, I submit to you that this is the time to actually reconnect to the things that matter. Take a moment to look around you and let yourself relax. Smile at a stranger, help somebody for a moment. It could be as easy as holding a door open or helping somebody carry a package or, God forbid, letting somebody get in front of you on the highway.

    You will often hear me speak of finding your passion and making it a part of your life. Do something this week that you love but haven’t found time to do recently. When you reconnect with your passion, all aspects of your life including your career will be improved. The little things in life will become larger if you allow them to. Life is uncertain; eat dessert first!

    Joseph DeFino passed away on June 1, 2018, and is survived by his wife, Chris, and his two sons, Zachary and Josh.

     

  2. Why is Trade Credit Protection Critical?

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    By Gwenyth Luu, Director – Commercial Lines

    Every business owner knows that they need to have insurance policies in place to cover their risks and liabilities. Some even have policies covering situations in which their supply lines or logistical capabilities become compromised, with the intent of keeping the business running. What happens, however, if your biggest customer defaults on payments and your company suddenly loses a huge chunk of revenue? That is a question that many CEOs and business owners, unfortunately, do not ask themselves until it is too late. Those that do ask that question often don’t have a good answer. So what can be done to avoid that situation?

    Trade Credit Insurance exists precisely for those situations. These policies are better known to companies who do business internationally or are located outside of the United States, but such policies are becoming more and more popular here as well. Credit insurance allows companies to protect their domestic and international accounts receivable against unexpected bad debt loss due to insolvency, protracted payment (i.e., slow payment) from customers, and political risk.

    These policies cover either all or the majority of your receivables, so you won’t need to get a separate policy for each customer. Claims can be filed when customers become insolvent or after a preestablished amount of time (in the event of a slow payment).

    There are many advantages to trade credit insurance:

    • Safeguard one of your largest assets— protects against a devastating loss to your accounts receivables
    • Support your sales goals—expand into new and unfamiliar markets much more comfortably by extending large lines of credit than you might normally offer
    • Strengthen your credit risk management controls—credit insurance allows you to cap exposure to bad debt losses

    Let’s consider a couple of scenarios which make evident the value of this type of policy:

    A manufacturing company seeks to expand its sales with customers but isn’t comfortable offering higher internal credit limits. This company could turn to a Trade Credit Policy in order to cover its customers and, thus, increase credit limits, grow revenues, and deliver more profits.

    A wholesale chemical and materials company secured its receivables with Trade Credit Insurance, which allowed them to provide more transparency to its lenders and, thus, gained the ability to improve their lending terms.

    Utilizing economic studies and informational databases, you can determine how creditworthy your customers may be before you extend to them. That will preemptively alleviate some of your risk, allowing the policy itself to take care of anything that slips through the cracks.

    With coverage in place, you can conduct business as usual with the added benefit of value credit analysis and collection services. Don’t let a client default put your company at risk. Take proactive action and find out whether your company could benefit from a trade credit policy today.

     

  3. Remarketing Your Insurance

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    By Ryan Hager, Assistant Vice President – Commercial Lines

    If I’ve heard it once, I’ve heard it 1,000 times. I’m sitting across the table from a prospective client who wants me to quote their insurance. They want me to go back and go to the marketplace (and approach the same markets their current broker has approached) and bring back a customized proposal that is slightly less than what they are paying now. They see this process as an opportunity to show my value.

    What most people are shocked to learn is that this is the least important part of my job and the least effective way to save money. Before you stop reading because you think I am out of my mind (I am, but just not with this), you need to understand how an insurance company comes to their final pricing. There are a few different categories that dictate your final pricing, and only one or two of them is within your control. The factors that are out of your control include the state of the marketplace, global losses, reinsurance costs, your industry and the values of what you are insuring. What you can control are your losses and the way you are marketing your program.

    Does your current plan to lower the cost of your insurance go any further than remarketing your insurance? If you are currently relying on this method to control your premiums, I can guarantee you that, yes, you are currently overpaying on your insurance. The only way to take control of your insurance program is to do two things:

    1. Install Controls
    2. Change the Process

    By installing risk management programs unique to your company’s risk, you will mitigate the insurance company’s exposure to claims, which allows them to be more aggressive in their pricing. The only investment involved with implementing these loss control programs is the time associated with implementing them. Not only will the company benefit from implementing these programs by looking at their bottom line, but at the end of the day, the employees benefit from working in a safer work environment that allows them to return home in the same condition they left it in the morning.

    Once you develop and implement the controls needed to help mitigate risks in your workplace, it is time to change the process in which your insurance is marketed. Unfortunately, gone are the days when my grandfather would take an underwriter out to lunch and get a deal done on a napkin. With the advancement of technology, knowledge has become power when it comes to an insurance company’s underwriting guidelines. As a result of this, it is imperative to start the renewal process at least four months prior to expiration and to provide underwriters with a detailed narrative of what controls have been implemented that warrant lower premium rates. When you are marketing your insurance in this fashion, you are putting yourself in the driver’s seat, whereas previously, you were put in a position of being beholden to the marketplace and its rates. Implementing these measures is the only way to see a significant change in the value of your insurance program.

     

  4. Proactively Thinking

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    By Ken Hager, COO

    What does it mean to be proactive? Being proactive requires advanced thought and preparation, something that many of us don’t take the time to implement. Why is being proactive more important than being reactive? Which one do you classify yourself as?

    I like the Dictionary.com definition of proactive:

    “1) serving … to control an expected occurrence or situation, especially a negative or difficult one; 2) anticipatory.”

    The opposite, of course, is to be reactive: waiting for things to occur before responding, or behavior that is not internally motivated but manifests in response to a situation or the actions of others. Let me give you a few quick examples of why proactive activity is the better choice, although most people by default seem to be reactive.

    As I explained in an earlier article in this publication, I am a boater/fisherman who loves being out on the water as often as possible. The only problem with being involved in water activities is the real possibility that you may find yourself in a situation beyond your control that could very well be life threatening. I like to travel anywhere from 20 to 125 miles offshore in pursuit of my passion. As I often tell my crew members, make sure we have everything we could possible need for this trip as there aren’t any convenience stores out there that we can run into and pick up supplies. In a situation like this, you definitely want to be proactive and think of every possible need that may come up ahead of time and make sure you have it — and, when possible, a spare — on board.

    I always tell Nelson, who works on my engines, “If it needs to be done, just do it. You don’t even have to ask me.” The last thing I want is to be 120 miles offshore, have an engine failure, and not be able to get back to shore just because I put off doing a recommended service.

    I had just such a situation this past September when my crew and I decided to go to Block Canyon to hunt down tuna, about 140 miles away from the dock. We fished all afternoon and throughout the night and into the late morning of the next day, with the intent of leaving right after lunch to be home by dark.

    We didn’t make it. About 125 miles from home, I lost a transmission on one of my engines. Instead of being able to travel 30–35 mph to return home, we could only go 7 mph. What should have taken us 4 1/2 hours ended up taking us 15 hours (this after being on the water for 28 hours).

    Naturally, as we plodded along, the wind started to build and the seas kicked up waves to 10-footers. We didn’t have the ability to run out of the way. It was a very unpleasant 6 hours of the 15-hour return trip. We made it home — tired, aggravated, extremely late, but safe.

    The next day back at the dock, I went over all of our pretrip arrangements and all of our preparations to see what we could have done differently. Turned out we had plenty of supplies, food, water, and everything else we needed to spend an extra day out there, so that worked out. What I hadn’t done was give any thought to spot-checking or servicing the transmission. It had never occurred to me.

    When the transmission guy came to the dock to repair the one transmission, I instructed him to replace it on both engines. “But why would you do that if the starboard transmission is working and hasn’t demonstrated any problems?” he asked. I explained that I was a firm believer in proactive measures, and since both transmissions were installed on the same day and had an equal amount of hours on them, it was only a matter of time before the other one decided to go as well.

    After he replaced the port transmission and then double-checked that I still wanted to go ahead with the starboard one (after showing me the invoice for the cost of the port one), I still gave the go-ahead. Once he took it apart, he called me immediately and said, “It turns out that was a great thought on your part.” This transmission had the same wear problem as the other, and it was a matter of days or weeks at the most before I would have found myself in the same situation.

    The original repair and aggravation were a result of my reactive thinking, but the second replacement was proactive. By being proactive, I saved myself and my crew from being caught offshore and limping home again, possibly being caught in God-knows-what conditions. Being proactive saved me time, aggravation and possible additional costs by treating a potential problem before it became an actual issue.

    It’s the same thing with everything we take on in life, much like a conscious decision that JGS Insurance made as a company a few years back. My brother Vinnie and I sat around a table and reviewed our entire operations as a company. We realized that we had been a very reactive entity, both internally as well as externally to our customers. As a result, we weren’t prepared for situations that we could have or should have been ready for. We were losing customers and business due to a lack of forethought and doing business the same way for over ninety-five years.

    We made the decision to completely change the way we do business and put into place proactive services for our customers. We developed time lines and service plans that extended from eighteen months to five years in some circumstances. We retrained our employees and brought on additional professionals to help us implement our vision. We are still early in the change process, but to date, our customers and our employees have a greater sense of satisfaction and accomplishment than when we just reacted.

    If you want to experience the difference between reactive thinking and proactive planning, reach out to one of the professionals here at JGS. We would be happy to sit down and discuss our services and how we can help you adjust your planning and outcomes.

     

  5. Foreign Supplier Verification Program

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    By Gwenyth Luu, Director – Commercial Lines

    Americans want assurances the food they’re consuming is safe. It’s estimated that 15 percent of the country’s food supply, including half of fresh fruit, 20 percent of vegetables, and up to 80 percent of seafood that’s consumed in this country is imported. Until the recent passage of the Food Safety Modernization Act (FSMA) — which was designed to overhaul the safety of the US food supply — there were few assurances that the food products being imported from foreign suppliers were safe. In addition to creating new standards for foreign suppliers, FSMA imposes new requirements on all domestic food companies as well.

    FSMA was first enacted in January 2011 in response to the estimated 48 million Americans, or 1 in 6, who are struck with foodborne illnesses each year. This leads to approximately 128,000 hospital stays and 3,000 deaths, according to data from the Centers for Disease Control and Prevention. That’s why strict food import requirements have been implemented by the Food and Drug Administration (FDA) to ensure significant food safety improvement on both domestic and imported food products.

    FSMA has led to huge changes to the nation’s food security and safety. The FDA has shifted its focus from addressing foodborne illnesses from reaction to prevention.

    One of the new requirements under FSMA is that, beginning on May 30, 2017 (with only some exceptions), domestic importers of human and animal foods are required to develop and implement a Foreign Supplier Verification Program (FSVP), designed to verify that all food products entering the United States satisfy US safety standards.

    Companies purchasing food from overseas must identify and evaluate known or foreseeable hazards for the foods they import to ensure that their suppliers are controlling for any biological, chemical and physical hazards which are reasonably likely to occur. Biological hazards include such things as parasites and disease-causing bacteria; chemical hazards include things such as pesticides, drug residues, toxins, illegal food dyes or additives; and physical hazards include things such as plastics, metal shavings or glass shards.

    Any food processor or importer bringing food into the United States from overseas must follow specific processes to import these food products. In all cases, importers will be required to review and assess their suppliers’ food safety programs to ensure that their suppliers are adequately controlling for known hazards. Depending upon the risk of the product at issue, these efforts might also involve doing third-party audits on the foreign supplier.

    Such audits might include a walk-through of a food processing site, reviews of good manufacturing practices, an assessment of a supplier’s quality control programs, the foreign company’s recall plan and other things to ensure the foods that are reaching the United States are safe for consumers.
    Although there isn’t an insurance product available to ensure that your FSVP will be compliant with the regulatory requirements, there are insurance products available to protect you in the event that you or a supplier is forced to conduct a recall for product contamination or other reasons. JGS Insurance can help you assess your company’s relative food safety risk and design the product recall insurance policy that is right for your situation.

    With that said, there are other ways to manage risk as well. The risk of any potential recall decreases dramatically if a company can achieve and also maintain compliance with the new FSVP regulations. JGS Insurance has partnered with industry experts, such as Food Industry Counsel LLC, the only legal and consulting firm in the world which advises the food industry exclusively. In addition to obtaining or enhancing your recall insurance coverage, take advantage of this opportunity to let the experts help you develop and implement a FSVP program that will withstand regulatory scrutiny. Adopting this strategy can help you reduce and then control your risk substantially.

     

  6. Association Funding

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    By Ross Rutman, Assistant Vice President – Habitational

    Is your Association properly funded? Most likely it is not! Funding Community Association operations is the most vital responsibility of every Association Board, yet so many Associations struggle with this. Proper oversight of day-to-day operations as well as long-term projects provides peace of mind to the owners and the Association that there will be adequate funding to run the community effectively. Businesses in New Jersey are required to respond to a data breach quickly

    Board members have a fiduciary responsibility to make sure Association funds are properly allocated. A logical and realistic budget must be created using actual expenses and Reserve Study guidelines. A Reserve Study is a report (typically completed by a specialist or an engineer) that takes a deep dive into all aspects of an Association and its responsibilities, especially large-scale issues such as roof replacement, road paving or other large expenditures. A Board might see a domino effect if they fail to get a Reserve Study in place or if the study is not followed or updated as time goes on. Association property runs the risk of falling into disrepair, which may result from a Board’s bad management or lack of oversight on the community.

    Typically, maintenance fees are allocated to paying everyday/reoccurring expenses or major repairs/replacements. There are basically two types of funds you will deal with in your Association. The day-to-day operations should be taken care of by your operating fund. The large-scale or long-term projects are handled by the reserve fund. Consider how this setup is similar to how you most likely use your household checking and savings accounts.

    Operating fund: This fund is used to pay for the services that help carry out the day-to-day operations of the Association. These include but are not limited to the following:

    • The most expensive contracted services such as landscaping, snow removal, property management and lifestyle services, pool expenses, general maintenance of common areas, security services, and of course insurance.
    • Office expenses (paper, toner, postage, etc.)
    • Accounting
    • Utilities
    • Legal Fees

    The actual fees for one year will be a good indication of the next year’s proposed budget. Of course, it’s wise to keep expenses to a minimum and focus on necessary costs and actions.

    Reserve fund: This fund is used for large-scale or long-term projects, such as replacement and/or repair of Association property. This money typically has strict criteria for how it can be used based on Association rules and regulations and bylaws. The best way to look at the reserve fund is to understand that it is used to pay for expenditures that do not occur on an annual basis. Please keep in mind there could be hundreds of such projects, and every Association is unique, however, some examples of reserve fund uses are:

    • Roof replacement or painting of common buildings (i.e., condominiums, clubhouse)
    • Work on amenities, such as the community pool
    • New playground equipment
    • Fence replacement for common areas
    • Major landscaping projects
    • Construction or major renovations for road and sidewalk projects

    Remember to check your Governing Documents and Reserve Studies!

    As a Board member you have several important roles. But if you start with proper funding, the other tasks will certainly come more easily. It is important to have money set aside for major expenditures. Although a special assessment may still be required, in many cases they can be avoided. Keep in mind all the potential issues that take place along the way; some are predictable while other issues like to catch us by surprise. If we fail to plan, we plan to fail, especially when dealing with Association funding!

     

  7. That Sunny August Day That Changed My Life

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    By Ryan Hager, Assistant Vice President – Commercial Lines

    It was your typical Florida morning in the month of August. It was so hot and humid that when you left the safety of the air-conditioned car, the heat hit you like a wall. It was only 7 a.m., and that was not a good sign of what the weather had in store for the rest of the day. For two weeks every August, I would have this daily battle with Mother Nature as I attended camp at the PGA Center for Golf Learning and Performance. For the entire year leading up to it, I would look forward to the golf camp. Just as important, was getting to stay the two weeks with my grandparents and spending quality time together.

    Just like we had every morning, my grandfather was driving me up I-95 to Port St. Lucie where I had eight hours of working on my golf game ahead of me. My grandfather always preached the importance of being early, no matter what. This meant that we left every morning around 7:10 a.m. to drive to a facility twenty minutes away for a camp that didn’t start until 8 a.m. If you tried telling him that this was a little over-the-top, then he would leave a whopping five minutes later. Like every other sixteen-year-old, I would struggle getting up in the morning and wanted to wait until the very last millisecond to get up and leave. This morning was no different than any other morning, I was half asleep in the car ride to camp; what I didn’t realize was that I was about to have a conversation that would change my entire life.

    At this point in my life, I lived and breathed golf. I was the first one on the course and the last one off. During the frigid Jersey winters, I would set up a net in my garage and hit at least 300 balls a day. As a result of my passion for the game, I was interested in seeking a career in the golf industry as a teaching professional. It may not have been the most stable career choice, or one that would have provided me with the best quality of life, but nevertheless it was the path I was set on taking.

    We had just turned onto I-95 when my grandfather looked over at me and asked that I promise him one thing: give JGS a shot. After all, he began his role as President of JGS in 1962 where he stayed for over 34 years! My grandfather spent a career pitching JGS to clients and industry professionals, and on this summer day, he was now making the pitch to his grandson. He discussed the ability to work with my family, the endless opportunities, and the chance to be a part of something great. The request was simple. I didn’t have to force myself into a career that made me miserable; rather, just work at my family’s business for a summer and consider it as a viable career path. One thing was made clear from the beginning: no matter what decision I made, I would always have his support behind me. Eight months later, I walked into JGS for the first time as a summer intern. Much has changed since my grandfather was President; JGS has grown from a handful of employees to over eighty; we have been recognized by our peers as a top-100 brokerage in the country; and we continue to innovate our practices. However, there are some things that have not changed at JGS. We are still a family-owned business in an industry that has been dominated by the big guys acquiring the independent voice.

    This year I will mark my fifth year at JGS, and even though my grandfather is no longer with us, I still feel his influence every single day. I am honored to be able to work with one of his former clients, a client for whom he and my father traveled to Maryland every summer to present their insurance renewal. Last year’s annual drive was different, for the first time it was myself and my father driving down to Maryland to present that long-time client’s insurance renewal. When I think back to that day I can’t help but think about that one sunny day in August with my grandfather that changed my life.

     

  8. Atypical Umbrella Claims

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    By Ken Hager, COO

    Do You Have Enough “Sleep Insurance”?

    I am often asked what is the proper insurance limit a company should purchase: $1,000,000? $5,000,000? $10,000,000? Or perhaps no umbrella at all? What do you think a proper limit should be? There is no easy way to answer that question, and one size definitely doesn’t fit all. Think about this question, pick a number, and write it down now before you read the rest of this article. To help you make that very personal decision, I thought it appropriate to discuss what an umbrella is and what it isn’t and share some unusual claims that we have experienced through our umbrella program.

    An umbrella in simplest terms refers to additional limits (known as excess limits) of liability insurance to protect you from catastrophic claims. An umbrella will typically afford you higher liability limits over your primary liability policies, also known as your underlying schedule. It is important that you review all of your liability policies, which may include general liability, automobile liability, foreign liability, professional liability, directors and officers’ liability, employer’s liability, employment practices liability, and perhaps liquor liability depending on your business exposures. A general rule of thumb is when purchasing an umbrella, you list any and all primary liability policies on the “underlying schedule.” If you have a policy, say directors and officers, and it isn’t listed on the umbrella liability schedule, then you will find yourself with a gap or no additional liability limits than the primary policy.

    Why is this important? As I explain to my clients, an umbrella policy is basically “sleep insurance,” peace of mind knowing that in the event of a catastrophe, you have enough dollars to pay against any claims rendered. Most people understand that a bad auto accident can eat through a million dollars of automobile limits pretty quickly, especially if there are fatalities. Many of the claims we see are due to this very issue and is one of the driving (pardon the pun) forces of claims against a business. But if, for example, you are a community association and have a board of directors, you have an exposure that needs to be listed on the umbrella liability schedule for the umbrella policy to be effective. If you have purchased any of the types of liability previously mentioned, then you have already recognized the fact that your company has a real exposure that could affect you at any time.

    Let me give you some atypical umbrella claims—real examples that we’ve paid out on behalf of our insureds—to help you get a better feel for what types of exposures may face your company that you probably never gave a second thought to:

    • Building blew up due to alleged gas leak. Three fatalities. Removal of an oil tank while digging for a replacement gas line caused an explosion. Suit brought against property manager, building owner, PSE&G and contractor. Our insured building owner was found liable for$1.65 million. Underlying policy paid for defense costs and primary limit of $1,000,000; umbrella policy for building owner paid $650,000.
    • Claimant dove into pool and was severely injured. After the incident, local inspectors deemed the pool was indeed unsafe and violated code. Pool was closed. Umbrella paid $1,187,000.
    • Claimant was walking down stairs of insured’s building when railing came off of wall. At the time of the incident, claimant was found to be legally intoxicated from tests taken at hospital. Claimant suffered a broken ankle and leg. Jury found in favor of claimant and was awarded $2.3 million; umbrella paid $1.3 million.
    • Claimant dove into pool and sustained a fractured neck. Allegations of improper depth markings, improper lighting and lack of signage. Our insured was found liable for $3,900,000, of which the underlying policy paid out$1,000,000 and umbrella paid out $2,900,000.
    • Two children in an apartment building were taken to the hospital with alleged mercury poisoning. Insured hired a contractor to replace all of the old thermostats in the building, which had mercury switches. However, instead of following the law with proper disposal methods, contractor placed the thermostats in the dumpsters while the children were outside playing. One of the children got severe mercury poisoning and recovered; the other 13-year-old child suffered permanent physical and mental impairment and will be impaired for life. Building owner’s share of liability was $5,000,000, of which umbrella paid out $4,000,000.
    • Unit owner was burglarized and subsequently shot during the burglary. Allegations of inadequate security, failure to provide safe premises and improper lighting. Claimant awarded $5.2 million, of which the umbrella picked up $4.2 million.
    • Boy on bike struck and killed by vehicle on sidewalk at entrance to association. Father was seriously injured as well. The allegation was obstruction of view and failure to maintain/regulate entrance landscaping and signage at entrance to association. Hedges at entrance way were twice the height allowed by code; stop sign was shorter than required by code. Jury verdict of $12 million, of which association was found 30 percent at fault, property manager 60 percent, and driver of the vehicle 10 percent. Due to the fact that the property manager was listed as an additional named insured on the association policy, umbrella paid $11,870,000.

    These are just a handful of what we call atypical claims that most people wouldn’t contemplate when deciding on whether or not to purchase an umbrella and, if so, for what dollar amount. Unfortunately, we have multiple claims for inadequate security, obstruction-of-view claims, quadriplegic pool accidents, trip-and-falls and other atypical as well as typical claims. As a result, we always recommend that clients price out limits and purchase the highest affordable limit that they can budget for. Our umbrella program that we manage nationwide can offer from $1,000,000 to $100,000,000 in limits at very reasonable prices.

    Now please take a look at the number you wrote down when you started to read this article and compare it to the number currently in your head. Is it the same? We hope that your company never faces tragedies like the ones outlined here, but we recommend you prepare yourself adequately just in case. Do you have enough “sleep insurance”?

     

  9. Meeting Minutes: The Most Important Minute of the Day

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    By Ross Rutman, Marketing/Producer

    Community association board meetings—(where important homeowner matters are discussed and decisions are made)—contribute to the success of community associations. Since board meetings result in significant decisions that impact community members, it is necessary to record these decisions in official board meeting minutes. These minutes serve as a historical record and provide pertinent information to the community. Recording accurate minutes can also prevent potential litigation risks for Association directors and officers.

    What are board meeting minutes?

    Board meeting minutes are a written record of the official actions taken by an Association’s Board of Directors during scheduled meetings. The minutes document the topics discussed and record the decisions voted on during these meetings. There are two sets of minutes: one for closed sessions (Board members only) and another for open sessions (those that include homeowners). The minutes can also serve as a reminder of what was previously discussed to avoid rehashing old business.

    What is the purpose of board meeting minutes?

    There are two main purposes of board meeting minutes:

    1. They inform members of decisions that impact their community association.
    2. They can serve as evidence in the case of a lawsuit against the Association.

    For Board members, meeting minutes are valuable evidence that the Board made decisions in good faith and carried out its fiduciary duties to the Association.

    What should be included in board meeting minutes?

    Board meeting minutes should be easy to read and include only essential information. Most importantly, members should be able to understand what Board actions were taken and approved. At a minimum, the minutes should include the following:

    • Name of the Association
    • Date and time of the meeting as well as the location
    • Names of all Board members, noted as present or absent
    • Names of guests in attendance, including those invited to speak
    • Whether or not a quorum was present
    • All Board actions taken
    • Signature of the Board secretary or other official qualified to sign
    • Supporting documentation, if applicable

    It is generally the Board secretary’s responsibility to record and certify the minutes. Keep in mind that all of the Board directors and officers may be held liable if the minutes are falsified or embellished. It is best for the person recording the minutes to be someone other than a Board member since focusing on the task of taking minutes could potentially take this member out of important discussions.

    After the meeting, the open session minutes should be made available to all Association members, whether by mail, email, or posting the minutes in a common area or on a community website. A printed copy of the minutes should be kept in the Association’s Board minutes book. An electronic copy should also be retained.

    What should not be included in the board meeting minutes?

    Meeting minutes do not need to be a transcript; rather, they should be a summary of the meeting. Avoid recording the following:

    • Names of homeowner members present
    • Every conversation that took place, especially those that lead to unnecessary discussions
    • Owner comments during the meeting, especially of a confidential or sensitive nature

    Boards should discuss confidential or sensitive information, including delinquencies, in the closed session. Minutes that contain sensitive information should be kept separate from open session minutes.

    Meeting minutes are a valuable communication tool and may be used as evidence during a lawsuit. Contact me today for additional resources to manage and protect your Association.