Insurance to protect your legal liability for hauling property of others, in your case other people’s vehicles. Current

1. On-Hook Cargo Coverage Analysis Findings Recommendations • Insurance to protect your legal liability for hauling property of others, in your case other people’s vehicles. Current Coverage • Policy is designed for a trucker hauling goods for hire and not for a towing operation. • Currently no coverage for automobiles, trucks, trailers, or motorcycles • Steps we have taken to resolve… • Covered property includes vehicles and trailers and any property on or in vehicles or trailers • Set a per vehicle cargo schedule ranging from $200,000-$500,000. • Secure insurance on a towing specific cargo policy.

2. Agreed Value Analysis Findings Recommendations • By adding the Agreed Value Clause to • the policy the coinsurance clause is • completely eliminated. The insurance • company and the insured agree on the • value of buildings and contents up • front so that in the event of a loss the • claim will be paid in full. • Current policy includes a 90% coinsurance clause on the Weedsport location. Claim Scenario

3. Employment Practices Liability Analysis Findings Recommendations • EPL insurance protects an organization • from liability claims arising from the accusation of • wrongful termination, wrongful harassment, and • wrongful discrimination. • Facts • A private company is five times • more likely to have an EPL claim • than a General Liability claim. • Nearly 75% of all litigation against • corporations in the US involve an • employment dispute. • 65% of employers who have fired an employee have been the subject of a discrimination lawsuit • The average cost to defend an EPL claim is $150,000 and the median award is $250,000 In addition to protecting your organization from employee driven EPL claims, we recommend to include 3rd party EPL which protects your organization from claims arising from outside parties such as customers, vendors, independent contractors,

4. Fellow Employee Exclusion Analysis Findings Recommendations • The fellow employee exclusion states that liability • coverage will not be provided to the insured entity or • their employees for any injury that one employee • causes to another. • Facts • The current liability policy excludes coverage for injury that one employee causes to another. • Gap is exposed when injured passenger sues driver of vehicle for negligence. • Company is always named in the lawsuit In our program the “Fellow Employee” exclusion does not apply if the bodily injury claim results from an accident in a vehicle you either own or hire.

5. Business Income – Extra Expense • Benefit • The benefit of having “Any Loss • Sustained” on your policy is almost • immeasurable. When people think of a • loss they always think of how the • insurance will replace what was lost, • but often do not realize the continuing • expenses of the business that will go on • whether money is coming in or not. Analysis Findings After a loss occurs businesses are often forced to temporarily close. During this time of restoration expenses continue, and often rise. Business Interruption & Extra Expense insurance protects a business’ expenses and net profits until the business is fully restored to pre-loss condition. The current policy provides a shared policy limit of $10,000 for both Business Interruption and Extra Expense Action Taken • In the event of any sort of catastrophic • loss $10,000 would not provide nearly • enough insulation to your bottom line. • We have structured the new insurance • program to cover “Any Loss Sustained” • for Business Interruption or Extra • Expense.

6. Spoilage • Benefit • Increasing the spoilage coverage to $50,000 has doubled the amount of insurance protection from one of the most common perils in the grocery business. Analysis Findings Coverage for your perishable goods in the event of either a utility service outage or the breakdown of equipment is not included in your property limit. Coverage for perishable goods can be found in the spoilage coverage extension. The current spoilage limit on the policy is $25,000 per occurrence. Action Taken • Given the values of perishable stock in your store we felt that increasing the spoilage limit to $50,000 per occurrence would better insulate your balance sheet from risk.

7. Medical Payments • Benefit • Minimizing a loss will do two important • things, first the loss will not have nearly • the impact on your claim history, making • insurance more affordable over the years. • Secondly the claim will be settled • quickly so that your time is not wasted in • long and drawn out proceedings. Analysis Findings Medical Payments is an extension of the General Liability policy that offers a set amount of money to settle a claim out of court. The money is intended to handle the claimant’s medical bills along with minimal pain and suffering for which the insured is assumed negligent. For example if someone slips and falls in the store, the insurance company will offer them the preliminary amount of money in exchange for not prosecuting. Action Taken The current policy excludes Medical Payments all together. We have included a limit of $5,000 per occurrence in our program. The idea behind this extension is to control a loss before it gets out of control. Before taking the $5,000 the claimant must sign a waiver that holds the store harmless to further law suits from this matter.

8. Electronic Data Processing Equipment • Benefit • We have included a limit of $35,000 for • computer equipment and hardware that is • damaged by an EDP type loss. We have • also included $5,000 of extra expense • coverage for any additional cost you • incur while trying to repair or replace the • damaged equipment. Additionally we • have included a limit of $5,000 intended • to replace any damaged or stolen laptop • equipment on or off the premises. Analysis Findings The contents of your building is insured from fire, wind, hail, etc. The problem with insuring electronic equipment only from these types of catastrophic risks it is much more sensitive to wide array of perils. EDP coverage extends insurance coverage for electronic equipment to include electrical or magnetic disturbance, along with changes in temperature or humidity, and mechanical breakdown. Action Taken The current insurance program provides no additional coverage for electronic equipment. In your case this could mean cash registers, computer systems, scales, camera equipment, scanners, and even security alarm systems.

9. Utility Services Deductible Analysis Findings Recommendations Based on the simple calculations to the left. The total cost of the claim is $50,000. The current Travelers policy has a 48 hour time element meaning it will pay $30,000 of the claim and the hospital will pay $20,000. We have worked to lower the deductible from 48 hours to 24 hours, thus saving the hospital $10,000 or 1/5 of the claim in this scenario. • The Travelers policy provides a $1,000,000 of insurance coverage for a time element utility services claim. This coverage will reimburse the hospital for any extra costs, expenses, or loss of income that a loss of utility service will cause. Claim Scenario A winter ice storm causes a power outage throughout the community for a total of 5 days. Two things happen right away. • Back up generators begin producing the power necessary to run the hospital. • Patients are diverted to a nearby facility temporarily until full service is restored to the hospital. • For the sake of simplicity, let’s say that the bottom line cost to the hospital above and beyond normal expenses is $10,000 per day until full restoration.

10. Electronic Data Processing Equipment Analysis Findings Recommendations • The Travelers policy provides • $5,000,000 for damage to EDP • equipment, which may or may not be • ample. To avoid the potential • catastrophic EDP claim we have • extended the EDP coverage to the • entire policy limit of $39,192,025. • Another aspect to EDP coverage is the • burden of cost that falls onto the • organization to recover information • that is lost. This additional expense is • not covered whatsoever by the • Travelers program. We have secured • a limit of $500,000 to fund the research • and recovery of data lost. • “EDP Equipment insurance provides an additional set of perils covered exclusively for electronic equipment such as phone systems, laptops, computers, back up drives, fax machines, copiers, etc.” • Special Perils • In addition to the normal perils for which property insurance will respond, EDP coverage also provides protection from: • Electrical or Magnetic Disturbance • Changes in Temperature or Humidity • Mechanical Breakdown

11. Equipment Breakdown Valuation Analysis Findings Recommendations • Details on Mechanical Equipment • Main Building Generator – 1972 • Cleaver Brooks Steam Boiler (2) – 1972 • 200T-York Absorption Chiller – 1972 • All Penthouse Equipment, Ventilation fans – 1972 • SNF Systems – 1987-88 Policy Wording • Equipment Breakdown insurance provides repair or replacement coverage for three types of occurrences: • Electrical Arching • Mechanical Breakdown • Steam Explosion • HFC and Travelers have included a caveat in the policy that eliminates the replacement cost valuation and replaces it with an Actual Cash Value clause for all equipment greater than 25 years of age. By utilizing ACV as the form of valuation Travelers would only pay the depreciated value of the equipment rather than the full cost to replace the item. Our Equipment Breakdown coverage provides full replacement cost coverage for all equipment, not just those items less than 25 years of age.

12. Employee Benefits Liability Analysis Findings Recommendations • Protects the employer against claims by employees or former employees resulting from errors or omissions made in the administration of the employee benefits programs. Facts on EBL • Protects an organization from liability arising out of managing: • Group Life & Health • 401K or Pension Plans • Worker’s Compensation • Unemployment Insurance • COBRA We have included a limit of $1,000,000 in liability protection for any claim surrounding EBL.

13. Vacancy Limitations Analysis Findings Recommendations • “The building has been vacant for a couple of years, at first we were going to demolish it to make room in the parking lot, however now we have been thinking about renovating it and bringing back our former tenants.” Policy Wording • Business Liability has been granted only for the vacant land itself, and not for the actual building. • Wording from Policy: If the building where loss or damage occurs has been vacant for more than 60 consecutive days before that loss or damage occurs, we will not pay for any loss or damage surrounding: • Vandalism • Sprinkler Leakage • Glass Breakage • Water Damage • Theft or Attempted Theft • Any other loss not excluded will be discounted by 15%. Vacant properties may attract trespassers, arsonists, thieves, or other criminals. Copper thieves target vacant buildings, especially those that are not secured and without power. Fires in vacant buildings have become a matter of increasing concern. In 2003-2006 fire departments responded to nearly 31,000 structure fires in vacant buildings per year. These fires resulted in $642 million in direct property damage per year. Given these alarming statistics and the great deal of risk a Vacant building can place on your organization, we have set Up a separate policy that solely covers the 148 Front Street Property.

14. Cyber Liability Analysis Findings Recommendations • If a database of customer information goes down, how will that affect your ability to conduct business as usual? • What cost would it present to your organization if you needed to notify every customer, whose information is in your system of a breech? • How is your organization protecting your network of information from the outside world? • How will you react to any HIPPA violations as a result of a security breech. • A cyber liability policy will • react to all of the above • scenarios and more. • “We will begin integrating customer payment options and merchandise sales into our website” • Facts • Recent state laws require companies that have experienced a security breach to notify all customers that could be affected, even if the information has not been used. This could mean credit card information, health records, social security numbers. • To notify customer’s about a breach on average will cost $15 per customer. • There will be a new federal cyber notification law put in place at some point in the near future.

15. Notice and Knowledge of Occurrence Analysis Findings Recommendations • Limit Claims Reporting responsibilities to key people only, if those key people are unaware of the claim, there is no liability to report. • Exact Wording in New Policy: Notice of an “Occurrence” or of an offense which may result in a claim under this insurance shall be given as soon as practicable after knowledge of the “occurrence” or offense has been reported to an insurance, loss control, or risk manager or administrator designated by you to give such notice. Knowledge by other employee (s) of an “occurrence” or of an offense does not imply that you also have such knowledge. • “I would hope very much that if one of my employees saw something they would tell me…” Case Study Company ABC had several retail stores throughout the state. One afternoon while entering the store Jane Doe slipped and fell, she quickly rose brushing herself off. She chuckled to the seemingly concerned employee in the parking lot at her own clumsiness. Several months elapsed before she went to see her physician about some pain in her lower back. Ms. Doe and her physician realized that the back pain is a direct result of her fall in Company ABC’s parking lot. Ms. Doe needs to undergo some quite severe surgery and faces some long term health risks. She notifies the corporate headquarters of Company ABC that she will be bringing suit. Company ABC reports the claim to it’s insurance company, but the claim is denied for failure to report an occurrence.

16. Employment Practices Liability Analysis Findings Recommendations • “We recently had to fire an employee over a controversial issue” • “Not certain how long the EPL coverage has been in place” • Facts • A private company is more likely to have an EPLI claim than a General Liability Claim • Almost 75% of all litigation against corporations in the US involve an employment disputes • 65% of employers who have fired an employee have been the subject of a discrimination lawsuit • The average cost to defend an EPLI claim is $150,000 and the median award is $250,000. • Increase Limits to Meet Risk of both Legal Fees and Settlement • Allow STPT to select counsel that is interested in maintaining reputation.

17. Blanket Coverage Per Location Aggregate Analysis Findings Analysis Findings • A blanket limit is a single limit of insurance • that covers multiple locations and items under • one amount of insurance. • Facts • Blanket coverage is crucial for any business with more than one location. • Adding blanket coverage has no additional cost. • Increase limits for increases or redirecting of inventory. • Unless otherwise specified when a business owns • more than one location the aggregate limit of • liability insurance is shared across all locations • Facts • The current liability policy has not been endorsed to include a per location aggregate • By endorsing a per location aggregate you are doubling your coverage across the board.