Leasing Real Property

Landlord and tenant both have major insurance related concerns in negotiating real property leases. Major areas that should be addressed in the lease include:

• Responsibility to third parties for bodily injury or property damage
• Responsibility to each other for bodily injury or property damage, including damage to the leased property and its use value
• Responsibilities and rights in the event of damage to or destruction of the leased property

Relevant provisions are not limited to the “insurance” section. Your insurance advisor needs to review the entire lease to identify both those exposures that can and should be insured and those that cannot. Provisions labeled “damage or destruction”, “indemnification,” “subrogation,” or “environmental” are only a few examples.

The parties respective bargaining positions - or the abilities of their attorneys - may determine who wins and who loses most of the battles on the “fine print”. There are no such things as a “standard lease” or “standard provisions”.

Don Way
CEO

Individual Health Policies Cost Insurers Less than Group

Health insurers spend less on patients with individual policies than those with employer-sponsored plans, according to a new study by The Henry J. Kaiser Family Foundation. However, patients with individual policies typically have higher out-of-pocket expenses than their counterparts who purchase plans through their employers.

Individual health policies may carry low premiums but people need to understand that sometimes the plans are inexpensive because they don’t offer very rich benefits, said Gary Claxton, a vice president at the foundation and author of the study. Individual plans may have a higher deductible, copay or coinsurance, or may not cover certain services such as brand name prescriptions. Additionally, you must qualify for an individual policy and if you have certain medical conditions you may be declined coverage.

The study found that an insurer spends an average of $756 annually on an individual between the ages of 18 and 34 who has bought his own policy but spends $1,174 on a person in the same age range in an employer-sponsored plan. Similarly, insurers spend an average of $942 annually on a person between the ages of 35 and 49 with an individual plan compared to $1,622 on someone in the same age range with an employer-sponsored plan.

Workers Comp Costs Continue to Fall

The Oregon Consumer and Business Services Department has put out its biennial chart on national workers’ comp rates and California no longer has the highest rates in the nation. Alaska is No. 1 in 2006 with a rate of $5.00 per $100/payroll. California is at $4.13 per $100/payroll and 166 percent of the national median, but trending down.

Foreign Travel

Do you have:

• employees that travel internationally
• employees stationed in foreign countries
• employees that attend international trade shows
• employees that perform service or repair work overseas

For minor exposures, simple and inexpensive endorsements to your domestic insurance policy may suffice. For more extensive exposures, special coverage is required.

2006 National Workers' Compensation Premium Rate Rankings

The Oregon Consumer and Business Services Department has put out its biennial chart on national workers’ comp rates and California no longer has the highest rates in the nation. Alaska is No. 1 in 2006 with a rate of $5.00 per $100/payroll. California is at $4.13 per $100/payroll and 166 percent of the national median, but trending down.

2006 Ranking	2004 Ranking	State	Index Rate	Percent of Study Median	Effective Date
1	2	Alaska	5.00	201%	January 1, 2006
2	1	California	4.13	166%	January 1, 2006
6	3	Florida	3.32	134%	January 1, 2006
10	18	New York	3.15	127%	October 1, 2005
12	5	Ohio	3.00	121%	July 1, 2005
17	14	Texas	2.64	114%	January 1, 2006
20	23	Illinois	2.69	108%	January 1, 2006
30	26	Nevada	2.36	95%	January 1, 2005
36	35	Washington	2.17	88%	January 1, 2006
42	42	Oregon	1.97	79%	January 1, 2006
51	52	North Dakota	1.10	44%	July 1, 2005