{"id":1877,"date":"2015-11-10T21:49:08","date_gmt":"2015-11-10T21:49:08","guid":{"rendered":"https:\/\/gillespieinsuranceservices.com\/?p=1877"},"modified":"2015-11-10T21:49:08","modified_gmt":"2015-11-10T21:49:08","slug":"what-is-insurable-and-what-isnt","status":"publish","type":"post","link":"https:\/\/finfrockweb.com\/gis\/risk-management\/what-is-insurable-and-what-isnt\/","title":{"rendered":"What Is Insurable and What Isn’t?"},"content":{"rendered":"

There are two types of business owners\u00a0that exist. \u00a0I talk to my clients and potential clients every day and I know this.<\/h4>\n

There is the type that wants to cover\u00a0their business from\u00a0things that are insurable and the other type that wants to cover their business from things that are uninsurable. \u00a0Neither of these groups is better, smarter, or more successful than the other; it just so happens they have different worse-case scenarios that keep them up at night.<\/p>\n

So what are those things that are insurable and those things that aren’t? \u00a0To know the answer, we have to start by knowing what insurance covers in the first place. \u00a0Insurance protects against risks. \u00a0This may seem obvious, but what type of risks? \u00a0There are six\u00a0classes:<\/p>\n

    \n
  1. Juridical<\/strong>: risks arising from a jury’s or judge’s decision. \u00a0Example:<\/em> you are a business owner and have been parking your cars on the neighboring parking lot for ten years. \u00a0The owner of the parking lot sues you claiming that you owe him $10,000 in parking fees. \u00a0The judge agrees.<\/li>\n
  2. Political<\/strong>: risks arising from changes in the law or governmental reinterpretations or changes in governmental policy. \u00a0Example:<\/em>\u00a0you are a successful winery with an award winning Merlot. \u00a0The newly elected government, under pressure of the puritanical majority, reinstates Prohibition. \u00a0You can no longer sell your Merlot.<\/li>\n
  3. Economic<\/strong>: risks arising from operations, marketplace, financial marketplace, or entrepreneurial activities. \u00a0Example:<\/em> you are a dairy farmer. \u00a0The price of milk gets so low, due to competition from Canadian dairies, that you cannot afford the hay to feed your cows of your milk revenues.<\/li>\n
  4. Legal<\/strong>: risks inherent in compliance or arising from statutory liability. \u00a0Example:<\/em> You are a granola manufacturer that has had a few too many employee workplace accidents. \u00a0Your Xmod has increased beyond 125%\u00a0and the State of CA requires you to pay a TICF fine. (By the way, the TICF fine was suspended, so this won’t happen any more).<\/li>\n
  5. Social<\/strong>: risks arising from public relations, loss of reputation, cultural problems, or social direction. \u00a0Example:<\/em> You are a high profile restaurant\u00a0owner and made a “funny” but “offensive” joke on Twitter. \u00a0Everyone boycotts your store causing a 20% loss in revenues.<\/li>\n
  6. Physical<\/strong>: risks arising from property, people, or information. \u00a0Example:<\/em> you own a commercial office complex that crumbles after an\u00a0earthquake strikes. \u00a0Your tenants sue you for the loss of their property claiming that you had failed to retrofit the building.<\/li>\n<\/ol>\n

    It may surprise you that most of the categories\u00a0on that list are uninsurable. \u00a0In fact, only item 6 – Physical Risks – are insurable<\/strong>.<\/p>\n

    Your insurance, whether it be General Liability, Workers Comp<\/a>, Employment Practices Liability<\/a>, Auto<\/a>, or a Property policy covering your buildings and belongings, are ALL insuring you only for Physical Risks<\/strong>.<\/p>\n

    Whether your worse-scenarios visions are those that result from Type 1 through Type 5 Risks, or Type 6 Risks, knowing what insurance covers you for – and doesn’t cover you for –\u00a0can help avoid an unpleasant insurance surprise one day.<\/p>\n

    \n","protected":false},"excerpt":{"rendered":"

    There are two types of business owners\u00a0that exist. \u00a0I […]<\/p>\n","protected":false},"author":3,"featured_media":3310,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[8],"class_list":["post-1877","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-risk-management","tag-risk-management"],"_links":{"self":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/1877","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/comments?post=1877"}],"version-history":[{"count":0,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/1877\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media\/3310"}],"wp:attachment":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media?parent=1877"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/categories?post=1877"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/tags?post=1877"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}