Hurricane Season can be a time of turmoil for property owners and real estate professionals alike. The short-term effects of a hurricane can occur both before and after a storm.
Before a Hurricane
Between June 1st and November 30th, Florida enters Hurricane Season, and real estate professionals should be aware of possible restrictions regarding securing insurance for a home purchase. If there is a named storm (typically a Tropical Storm, Hurricane Watch, or Warning) that develops and is threatening our area, most insurers will temporarily close for new policies until the threat passes. In other words, a buyer won’t be able to obtain insurance. This has the potential to impact a home’s closing. If the buyer is financing the home purchase, their lender typically won’t grant a loan commitment without homeowner’s insurance. To prevent this, it is critical to advise buyers to look into securing their insurance as soon as possible, and before the closing date. Buyers should contact their insurance agent and purchase a policy as early as possible during Hurricane Season.
In addition, standard homeowners’ policies typically exclude the peril of flood. All properties are located in a flood zone. Realtors should advise buyers to seek guidance from a local insurance advisor to perform a flood zone determination and confirm if the property is located within a Special Flood Hazard Area.
Recently, there have been numerous legislative and rate changes for flood policies by the National Flood Insurance Program (NFIP). Most recently, FEMA implemented Risk Rating 2.0 thereby transforming a pricing methodology that had not been updated in 50 years. As of April of this year, all policies are now subject to the new rating methodology. Current NFIP rates are not grandfathered in; however, if a buyer confirms the seller has an existing NFIP flood policy, a new policy can be written using the seller’s Glide Path. The seller will need to provide a copy of their current policy Declarations page; the minimum information needed includes the flood insurance carrier, policy number, expiration date, and original policy date. We recommend confirming the seller has a flood insurance policy in place through the NFIP and obtaining a copy of that policy which will enable the buyer to obtain preferred pricing for their new flood policy. If the seller does not have a flood policy in place, in addition to coverage through the NFIP, new home buyers can purchase their coverage through Private Flood markets which have been competitive for a good number of property owners in our area.
Even policy information from the seller for the property may not always be reliable due to flood zone changes and rating errors. It is best to consult an experienced Florida insurance professional at the very start of the due diligence process with any property, to get an accurate flood insurance quote and explanation of flood zones.
After a Hurricane
Insurance carriers carefully review properties for prior losses and open claims and will inspect homes after a new policy is placed, as well as spot-check the home over the life of the policy. In most cases, homes with existing damage are uninsurable if repairs are not made prior to the home closing or in a timely manner following the closing. All insurance carriers will require photos of the affected damaged areas, contractor receipts, and any applicable permits to show that the repairs have been completed. It is not uncommon for insurance carriers to cancel coverage if issues are discovered that were not disclosed on the application. It is important to understand that overall, it is very challenging to bind a new policy for a home that has an open hurricane claim.
Following a catastrophic hurricane or other natural disaster, insurance companies may struggle to keep up with higher-than-expected losses, and subsequently, homeowners may see increases in rates. Average home insurance rates have risen in every state in the last decade, mainly due to natural disasters, and Florida’s average rate is the highest in the nation. Florida tends to have most of its damage caused by hurricanes, such as Hurricane Irma, which hit the state in September 2017 and caused $11.1 billion worth of damage, with the vast majority of that to homes.
No area in the country, or arguably the world, has a stretch of coastline as expansive and hurricane-prone as Florida. This susceptibility to hurricanes puts homeowners and insurance companies in a risky situation. Real estate professionals should always advise homeowners to seek the advice of a local insurance agent on coverages needed. Just as insurance companies have different contracts by state, the contracts can also vary greatly within a state. A local agent will be able to help navigate through these differences and identify the bigger gaps in coverage/contracts.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in home and homeowners insurance, car and auto insurance, boat and yacht insurance, property insurance, umbrella insurance, valuables insurance for fine art, jewelry, wine, and more. Navigating insurance requires an experienced and trusted insurance agent who understands your high net worth risks and exposures. Gulfshore Insurance services Naples, North Naples, Port Royal, Park Shore, Pelican Bay, The Moorings, Naples Beach, Marco Island, Bonita Springs, Sanibel Island, Captiva, Fort Myers, Sarasota, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
Cyberattacks are increasing in the construction industry. These attacks can shut down business operations, cause reputational damage and result in costly litigation and fines.
Background
The construction industry is an appealing target for cybercriminals. This is due to a number of factors, including:
- Reduced cyber preparedness—The construction sector remains largely unregulated with regard to cybersecurity and privacy. As a result, cyber preparedness hasn’t been prioritized by many in the industry. In fact, according to an IBM study, 74% of construction organizations aren’t prepared for a cyberattack.
- More desirable data—Construction firms store large amounts of sensitive business data and personal information, making them lucrative targets for cybercriminals. If this data is improperly accessed, it may result in reputational damage, regulatory fines and related lawsuits.
- Increased adoption of technology—Many of the devices used by construction companies to increase workplace efficiencies (e.g., asset tracking, machine control and worksite security) are vulnerable to cyberattacks.
- Elevated third-party exposures—Construction companies frequently work with multiple vendors or third-party contractors, increasing their cyber exposures. After all, a data breach within any one of these partnered companies could result in widespread cyber losses.
Advisen data shows cyber losses in the construction industry have risen since 2010, with the most dramatic increase occurring in 2020. The decrease in 2021 is likely due to a data lag and therefore may not be representative of an actual decline in cyber losses.
The spike in 2020 may be partially due to an increase in cyberattacks overall. According to the FBI, cyberattacks increased 400% in 2020.
Top Cyberthreats
Cybercriminals use a variety of methods to attack construction enterprises. Here are the most common types of cyber losses in construction:
Unauthorized contact or disclosure is the most common type of cyber loss in construction, accounting for 44% of recorded losses. These losses include any event in which information is exposed to unauthorized parties. Malicious data breaches and ransomware attacks account for 30% and 10% of the remaining cyber losses, respectively.
While ransomware attacks currently only represent the third-most frequent type of cyber loss in construction, such attacks are a growing concern. In fact, a recent survey found construction was the top industry targeted by ransomware in 2021.
Cyberattacks in the construction industry most frequently originate from attacks on company servers, according to Advisen data. Telephone communications and emails are the second- and third-most frequent sources of cyber losses in the construction industry.
Personal identifiable information (e.g., names, Social Security numbers and driver’s license numbers) are targeted in 60% of cyberattacks in the construction sector. Personal financial information and personal health information are targeted in 36% and 4% of cyberattacks in the industry, respectively.
Notable Losses
Notable cyberattacks on construction enterprises in Advisen’s database include:
- Bird Construction—In 2019, Bird Construction was allegedly targeted by MAZE cybercriminals. The hackers stole 60 gigabytes of data, including Social Security numbers, banking details, names, email addresses and health information.
- Bouygues Construction—In 2020, cybercriminals allegedly breached the server of Bouygues Construction. As a result, the entire company network was shut down. The cybercriminals allegedly stole 200 gigabytes of data and demanded a $10 million ransom.
Between response costs, potential ransom payments and associated fines, cyberattacks can quickly cost millions of dollars in damage.
Risk Mitigation Strategies
Although cyberthreats are prevalent, there are steps construction companies can take to minimize their risks. Here are some strategies for companies to consider:
- Conduct training. Educate employees on how to recognize potential cyberattacks. Provide clear instructions for employees to follow if they believe a cyberattack has occurred.
- Prioritize supply chain management. Identify the risks of working with external organizations. Consider creating legal contracts with contractors and third-party businesses to address cyber risk management.
- Have a plan. Develop and practice a cyber incident response plan. This should include identifying an internal and external response team, clarifying roles and responsibilities of key team members, and anticipating critical business continuity measures and workplace safety issues.
- Purchase proper insurance. Speak with a trusted insurance professional to secure sufficient coverage for cyber losses.
Conclusion
Cyberthreats have become increasingly common among construction enterprises. As such, proper risk mitigation strategies are necessary to reduce the risk of costly cyberattacks. For more information on reducing cyber risks, contact us today.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
On April 29, 2022, the IRS released Revenue Procedure 2022-24 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2023. The IRS is required to publish these limits by June 1 of each year.
These limits include:
- The maximum HSA contribution limit;
- The minimum deductible amount for HDHPs; and
- The maximum out-of-pocket expense limit for HDHPs.
These limits vary based on whether an individual has self-only or family coverage under an HDHP.
Eligible individuals with self-only HDHP coverage will be able to contribute $3,850 to their HSAs for 2023, up from $3,650 for 2022. Eligible individuals with family HDHP coverage will be able to contribute $7,750 to their HSAs for 2023, up from $7,300 for 2022. Individuals age 55 or older may make an additional $1,000 “catch-up” contribution to their HSAs.
The minimum deductible amount for HDHPs increases to $1,500 for self-only coverage and $3,000 for family coverage for 2023 (up from $1,400 for self-only coverage and $2,800 for family coverage for 2022). The HDHP maximum out-of-pocket expense limit increases to $7,500 for self-only coverage and $15,000 for family coverage for 2023 (up from $7,050 for self-only coverage and $14,100 for family coverage for 2022).
Action Steps
Employers that sponsor HDHPs should review their plan’s cost-sharing limits (minimum deductibles and maximum out-of-pocket expense limit) when preparing for the plan year beginning in 2023. Also, employers that allow employees to make pre-tax HSA contributions should update their plan communications for the increased contribution limits.
HSA/HDHP Limits
The following chart shows the HSA and HDHP limits for 2023 as compared to 2022. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.
Elizabeth Flores is a Client Executive at Gulfshore Insurance and a trusted advisor to organizations in developing competitive, cost-effective benefit plan solutions that set employers apart from their competitors. She works with CFO’s and HR Directors to develop strategic plans that will achieve desired outcomes for their benefits programs. Comments and questions are welcome at eflores@gulfshoreinsurance.com
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in employee benefits insurance including group medical, dental, vision, life insurance, short and long term disability, voluntary life, employee assistance programs, wellness programs, individual life insurance, and more. Our insurance and risk management advisors are experts can provide valuable services including benefits plan design and administration, human resources support, funding options, compliance assistance, benefit administration, and enrollment services. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
On April 12, 2022, OSHA launched its National Emphasis Program (NEP) for protecting workers from heat hazards in indoor and outdoor workplaces. Through the program, OSHA will conduct heat-related workplace inspections before workers suffer preventable injuries, illnesses or fatalities. The NEP is effective on April 8, 2022, and will remain in effect for three years unless canceled or extended by a superseding directive.
NEP Background
The NEP establishes heat priority days when the heat index is expected to be 80 degrees Fahrenheit or higher. On those priority days, OSHA will:
- Initiate compliance assistance in the targeted high-risk industries; and
- Continue to investigate any alleged heat-related fatality/catastrophe, complaint or referral regardless of whether the worksite falls within a targeted NEP industry.
The NEP encourages employers to protect their workers from heat hazards during heat priority days by providing them with access to water, rest, shade, adequate training and acclimatization procedures for new or returning employees.
High-risk Industries (Appendix A)
The NEP targets over 70 industries that present a high risk for heat hazards. OSHA identified these industries based on Bureau of Labor Statistics and OSHA report data, which finds that high-risk industries exhibit the following:
- High numbers or incidence rates of heat-related illnesses;
- An elevated number of days away from work or high numbers of severe cases of heat-related illnesses;
- The highest number of heat-related general duty clause violations and hazard alert letters over a five-year period; or
- The highest number of OSHA heat inspections since 2017.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
Of all businesses that close down following a disaster, more than 25 percent never open their doors again. While there’s no way to lower the risk of a natural disaster from hurricanes, there are critical measures that can be taken to protect your company’s bottom line from nature’s fury. A disaster plan and adequate insurance are keys to recovery.
Disaster Recovery Plan
No matter how small or large a business, a business impact analysis should be developed to identify what an operation must do to protect itself in the face of a natural disaster. Large corporations often hire risk managers to handle this task and some companies hire consultants with expertise in disaster planning and recovery to assist them with their plans. But small businesses can do the analysis and planning on their own using these strategies:
- Set up an emergency response plan and train employees how to carry it out. Make sure employees know who to notify about the disaster and what measures to take to ensure safety and limit property losses.
- Write out each step of the plan and assign responsibilities to employees in clear and simple language. Practice the procedures set out in the emergency response plan with regular, scheduled drills.
- Consider the things you may initially need during the emergency. Do you need a back-up source of power? Do you have a back-up communications system?
- Decide on a communications strategy to prevent loss of customers. Post notices outside your premises; contact clients by phone, email or regular mail; and place a notice in local newspapers.
- Protect employees and customers from injury on the premises. Consider the possible impact a disaster will have on your employees’ ability to return to work and how customers can return to your premises, or receive goods or services.
- Compile a list of important phone numbers and addresses. Make sure you can get in touch with key people after the disaster. The list should include local and state emergency management agencies, major clients, contractors, suppliers, realtors, financial institutions, insurance agents and insurance company claim representatives.
- Keep duplicate records. Back-up computerized data files regularly and store them off-premises. Keep copies of important records and documents in a safe deposit box and make sure they’re up to date.
- Even if your business escapes a disaster, there is still a risk that the business could suffer significant losses due to the inability of suppliers to deliver goods or services, or because of a reduction in customers. Businesses should communicate with their suppliers and markets (especially if they are selling to a business as a supplier) about their disaster preparedness and recovery plans, so that everyone is prepared.
- Protect your building. If you own the structure that houses your business, integrate disaster protection for the building as well as the contents into your plan. Consider the financial impact if your business shuts down as a result of a disaster. What would be the impact for a day, a week or an entire revenue period?
- Identify critical business activities and the resources needed to support them. If you cannot afford to shut down your operations, even temporarily, determine what you require to run the business at another location.
- Find alternative facilities, equipment and supplies, and locate qualified contractors. Consider a reciprocity agreement with another business. Try to get an advance commitment from at least one contractor to respond to your needs.
- Protect computer systems and data. Data storage firms offer off-site backups of computer data that can be updated regularly via high-speed modem or through the Internet.
Review Your Insurance Plan
Make sure you have sufficient coverage to pay for the indirect costs of the disaster—the disruption to your business—as well as the cost of repair or rebuilding. Most policies do not cover flood or earthquake damage and you may need to buy separate insurance for these perils. Be sure you understand your policy deductibles and limits.
For a business, the costs of a disaster can extend beyond the physical damage to the premises, equipment, furniture and other business property. There’s the potential loss of income while the premises are unusable. Your disaster recovery should include a detailed review of your insurance policies to ensure there are no gaps in coverage. This includes property insurance, business interruption insurance and extra expense insurance. Even if your basic policy covers expenses and loss of net business income, it may not cover income interruptions due to damage that occurs away from your premises—such as to your key customer or supplier or to your utility company. You can generally buy this additional coverage and add it to your existing policy.
Most business owners are complacent about natural disasters until it happens to them. It’s only when the owner has gone through a disaster that a disaster plan, including purchasing the proper insurance, is usually considered.
Don’t let a lack of insurance coverage or poor planning destroy your business. Contact Gulfshore Insurance to learn more about disaster planning and to determine your best insurance coverage needs.
Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.
