Elliot Bartz, Author at Mighty Oak Insurance Services

August 23, 2021August 23, 2021

Indoor Grow Insurance

As recreational and medical cannabis has grown to enjoy more legal status at the local and state level in the last decade or so, the industry has grown from a relatively small, largely underground status into a multi-billion dollar economic engine. From dispensaries to indoor grows, new businesses are cropping up all over the place.

More and more entrepreneurs and individuals are entering the Cannabis industry in various services and sectors, from industrial scale cannabis farming to wholesale brokering to retail and refinement. Inevitably, insurance questions arise as businesses are formed and business relationships take shape.

Up until very recently, the insurance industry lagged significantly behind the explosive growth of the cannabis industry. While many carriers still refuse to do anything cannabis related, we have cultivated a crop of insurers that specialize in Cannabis risks of all types, sizes and market share. We have developed our expertise in this field through meticulous research and experience with different types of businesses – expertise that you deserve as you work to bring your business online, or grow it to the next level.

Here are some of the industry sectors that we specialize in:

Medical Dispensaries
Recreational or Combined Med/Rec Dispensaries
Cannabis Tour Businesses
Cannabis Industry Consultants
Edible Manufacturing
Oil Concentration Manufacturing
Harvesting Contractors
Indoor Grow Insurance
Outdoor Grow Operations
Potency and Purity Laboratories

Give us a call so we can get you what you need to get rolling.

June 17, 2021June 17, 2021

Lawyers: Have you experienced a frivolous lawsuit in your legal practice?

Many businesses and professionals face frivolous lawsuits as a result of their work, but lawyers probably face this more than anyone else. The source of these lawsuits can be unpredictable, and without insurance you could be left with tens of thousands of dollars in legal defense bills paid out of pocket. With the proper insurance, though, you can rest easy, knowing that you won’t have to come out of pocket to defend yourself from frivolous lawsuits.

What are some examples of frivolous lawsuits that lawyer’s professional insurance would cover?

You lose a case due to no fault of your own, but your client feels that you lost the case due to ‘incompetence’ or some other unsubstantiated error. They file a complaint against you with your State Bar. This situation can cost thousands or even tens of thousands of dollars in your own defense. You must pay to defend yourself even if the complaint is dismissed – insurance will cover these disciplinary defense proceedings, often without a deductible.
You share an office with another attorney, and they are sued by one of their former clients over a business transaction that did not meet their expectations. They sue you as well, claiming that you were also their attorney since you shared an office with their actual attorney. This can also cost tens of thousands in defense costs which would be covered by insurance – it also helps to get something signed by clients of another attorney that you share space with stating that you are not representing them.

The problem is, that sometimes after an insurance company covers you for such a frivolous claim, they will cancel, non-renew or increase the price of your insurance policy. At the end of the day, these carriers are looking to make a profit, and if they pay a claim they might view you as a bad bet, even if you fixed the problem (perhaps you stopped sharing an office with another attorney).

This problem is compounded by the fact that your claims history follows you and affects your eligibility for insurance elsewhere. Solving this problem requires a broker that has specialized access to and experience with certain insurance carriers that have a higher risk tolerance.

If you find yourself in a situation where you’ve faced a frivolous lawsuit (with or without insurance), and you now want to acquire insurance for the first time or replace your canceled or more expensive policy, reach out to Mighty Oak.

We specialize not only in lawyer’s professional liability but also professionals with a claims history.

May 27, 2021February 13, 2024

How to Properly Insure a Building Under Construction

Many property owners are unaware of the fact that major construction is excluded from their standard insurance policy. This is true for homes, commercial buildings, and mixed use properties. If an owner wishes to renovate their property, changes must be made to the insurance policy, since the standard property policy most likely excludes any and all claims pertaining to a building under construction. In fact, many of these policies contain exclusions so strict that even if something unrelated to the construction damages the property during the remodel, it results in a denied claim. Let’s examine the following policy language from a standard homeowners insurance policy:

More likely than not, any loss would probably be at least indirectly related to the construction/renovation. In most cases it might be difficult to prove that a loss had NOTHING to do with renovation/construction, even if that is in fact the case. For example, if a kitchen fire breaks out in a building under construction, the presence of construction materials in the home may cause the fire to spread more rapidly an destroy the home. In this situation, the policy language above may be used to exclude coverage altogether, and thereby render the insurance policy worthless. During a period of construction, an owner must make sure to get a (temporary) insurance policy that is specifically designed to account for a building under construction.

So, what is the alternative? A Builders Risk (also referred to as a Course of Construction) policy is the answer. This is a type of packaged property and liability insurance policy that accounts for the risk posed by a construction project. Properties under construction often have higher risk for fires, theft/vandalism, water damage, and even risk of falling objects injuring people or property. A Builders Risk policy accounts for these risks. These policies also account for both the existing structure and the cost of the building materials on the property, whether on the premises or in transit.

Essentially, the way that a standard homeowners policy becomes a Builders Risk policy, is with the addition of an endorsement for Builders Risk coverage. Here’s an example of the language, clearly expanding coverage to construction:

For commercial buildings under construction, oftentimes a separate Builders Risk policy will temporarily replace the regular property policy, until construction is complete. Typically, these policies will last anywhere from 3-12 months, and are typically not renewed. Once construction is done, the Builders Risk policy is dropped, and the standard property policy is brought back again. For projects that take longer, such as new construction for larger buildings, longer policy terms are an option.

Many standard homeowners carriers do not offer Builders Risk policies. If this is the case with your carrier, we can help secure you a temporary Builders Risk policy to properly cover your home/building during construction. When construction is complete, we simply cancel the Builders Risk policy and refer you back to your previous insurer or we can make a referral to a trusted colleague.

If your building is severely damaged, or you’ve recently had a property claim, we can help you get your building properly insured. This is true even if the building is currently damaged and you don’t plan to repair it for a while. Here is an article on finding insurance for damaged buildings and buildings with claims.

Reach out if you have questions about construction insurance. We are happy to help!

October 2, 2020April 4, 2024

Insurance for Sensitive Client Data or Information

Businesses that deal in sensitive data or personal information face an array of threats to the safety and integrity of that information. The loss of this information via a breach or hacking incident can lead not only to massive business interruptions, but also delays and potentially crippling regulatory fines. There are myriad new laws that regulate how businesses deal with Personally Identifiable Information (PII), trade secrets, and other sensitive data. Due to this regulatory complexity, a hacking event can be a nightmare for a business owner.

Luckily there is insurance available that can respond in the event of a hack, breach, or other internet-related mishap: Cyber Liability Insurance. Besides the steps that businesses can take to mitigate the risk of a cyber incident on their own, Cyber Liability Insurance is one of the best ways to account for the inherently unpredictable risk that comes with storing or dealing in sensitive information.

Cyber Liability Insurance contains many coverage options that can be tailored to your operation to ensure a good fit. What follows is a summary of the possible coverage options and their applicability:

Information Privacy

Maintaining secrecy and confidentiality around sensitive information is one of the main reasons to buy cyber liability insurance for your business. This coverage can be tailored to help you respond to the loss or theft of this information in a timely manner without having to pay for the entire incident out of pocket.

Available coverages include:

Information Privacy Liability – this pays for your defense and any settlement up to the policy limit as a result of losing sensitive data, trade secrets, PII, etc.

Regulatory Liability – the loss of regulated PII (such as medical records) can carry significant regulatory penalties as well as extensive investigation and court proceedings to determine liability. This coverage pays for your defense and settlement for any actions a regulatory agency might take against you.

Event Response and Management – Most cyber liability carriers offer a suite of services to help make you whole in the event you do suffer a breach that results in the loss of sensitive information. This is essentially a white glove response to assessing what happened, how to fix it, and how to prevent future issues, all paid for by the insurance carrier.

Network Security

In the event that your network is breached by a hacker, you can become a vector for spreading malicious code or other computer viruses to other computers tied to your network or even beyond.

This coverage is usually broken into two pieces: 1) liability coverage in the event your network causes problems for others, and 2) event response and management coverage, very similar to that offered under the “Information Privacy” coverages.

Business Interruption

In the wake of a cyber incident, business operations are likely to be substantially altered while handling damage control and recovery for your clients. This time period can have a big effect on revenue, not only during the recovery process but also for sometime afterward.

Business Interruption is included on most cyber liability policies for just this reason. Furthermore, most policies will pay business income regardless of whether interruption originated in your network/system or if it originated from one of your service providers.

Cyber Extortion

Also known as a “ransomware” attack, cyber extortion is becoming more and more common. This coverage will pay the ransom up to the policy limit, as well as assistance to reduce the possibility of this happening again.

Financial Fraud

Online fraud can take many forms. Cyber Liability policies typically divide the possible forms of fraud into the following two categories:

Social Engineering – the use of deception to manipulate individuals (employees, owners, managers, etc.) into divulging information that is personal or confidential, for the purpose of use in further fraud or personal enrichment.
Computer Fraud – any intentional, fraudulent or unauthorized input, destruction or modification of electronic data by a foreign entity, provided that such fraud causes a loss of funds/securities whether on behalf of your business or any of your clients.

Media Content

The final coverage that is commonly found on cyber liability policies pertains to Media content, which is quite broadly defined.

The Media Liability portion confers coverage in the following situations:

Defamation, libel, slander or tort that causes harm to any person or organization
Infringement of any slogan, logo, trademark, etc.
Copyright infringement, plagiarism, piracy, misappropriation of intellectual property (provided it was unintentional)
Invasion of privacy, including accidental disclosure of private facts or data
Invasion of privacy including trespass, harassment or eavesdropping

The media content coverage also typically pays to restore a firm’s reputation with the public after a cyber incident – something that is very important when a business is trying to restart operations after a serious breach or similar incident.

If you run a business that relies on or deals in sensitive information, trade secrets, PII, HIPAA data or anything similar, then you are at a heightened risk for any of the possible situations outlined in this article.

If you want to know more about how to acquire insurance for sensitive data or information, please reach out to us. There’s never any cost to get a quote and have a discussion about your situation.

Builder's Risk Insurance