Gulfshore Insurance > Gulfshore Blog

Commercial Lines Client Alert Florida Governor Signs Condo Safety Bill 1

The Florida legislature’s special session held recently resulted in new laws aimed to promote condominium building safety. Senate Bill 4D passed the House of Representatives and Senate each, and was signed into law by Governor Ron DeSantis on May 26, 2022.

Under the new legislation, Florida will require statewide recertification of condominiums three stories or more in height as a response to the Surfside building collapse. The legislation includes a framework for:

  • “Milestone” building inspections as structures reach 30 years old and every 10 years thereafter. For similarly situated condominium buildings that are within 3 miles of a coastline, the milestone inspection must be performed when the structure reaches 25 years, and every 10 years thereafter.
  • Mandatory reserve study and funding for structural integrity components (building, floors, windows, plumbing, electrical, etc.).
  • Removal of opt-out funding of reserves for structural integrity components.
  • Mandatory transparency—providing all owners and residents access to building safety information.
  • Clear developer requirements for building inspections, structural integrity reserve study, and funding requirements prior to transition to the residents.
  • Engagement of the Florida Department of Business and Professional Regulation and local municipalities to track condominium buildings and the inspection reporting.

The legislature has provided a two-year period of compliance for many of the requirements. Despite the two-year period, associations will have to ultimately comply with some of the requirements, their board of directors and members should not delay strategizing how these changes will be implemented. Condominium associations should consult with legal counsel and other professionals (including insurance advisors, accountants, reserve study professionals, and architects and engineers) as they begin implementing these new laws into practice to receive guidance on the funding, contracting, and scheduling of work to be performed.

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.

Personal Lines Florida Governor Signs Property Insurance Reform Bill

On May 26, 2022, Florida Gov. Ron DeSantis signed a bipartisan property insurance bill to provide some relief to consumers facing rising insurance costs within the state. This bill, known as Senate Bill 2B, is one of the most significant forms of legislation passed in an effort to alleviate ongoing challenges across Florida’s property insurance market. Specifically, the bill was implemented to help reduce rising insurance costs, increase claim transparency and limit the number of frivolous lawsuits that have contributed to elevated expenses. Keep reading to learn more about the bill.

Pro-consumer Measures
The legislation within Senate Bill 2B provides $2 billion in reinsurance relief through the Reinsurance to Assist Policy program to benefit policyholders over the next two years. The bill requires insurance companies to file a supplemental rate filing once enrolled in the program to provide relief to policyholders.

Through this bill, Florida homeowners can receive grant funding to help make their homes more durable against storms, thus minimizing potential property claims stemming from storm damage. This initiative is being accomplished through the $150 million dedicated to the My Safe Florida Home Program. This program gives consumers the option to retrofit their homes for hurricanes and receive subsequent premium discounts.

Also, under the bill, insurance companies are no longer allowed to deny coverage based solely on the age of a policyholder’s roof if it is less than 15 years old or determined to have only five years of life left. Furthermore, the bill requires annual reporting of the average premium discounts for participating Floridians by the Department of Financial Services.

Claims Transparency Changes
Senate Bill 2B also restricts insurance companies from denying claims without communicating sufficient reasoning to policyholders. In other words, insurance companies will have to provide ample reasoning whenever they deny or partially deny a
claim going forward. This change will help consumers have better access to valuable information throughout claims process. In addition, the bill requires insurance companies to provide policyholders with adjuster reports in a timely manner.

Anti-fraud and Legal Reforms
Senate Bill 2B also is intended to disincentivize frivolous lawsuits. In particular, the bill limits attorney fees for property insurance claims and insurancerelated cases; such fees are one reason insurance companies have had to increase their rates. Litigation costs have increased and, therefore, insurance companies’ expenses for claims involving lawsuits have risen. By limiting attorney fees, the bill seeks to minimize overall litigation costs for insurance companies and, in turn, help lower rates for policyholders.

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.

Personal Lines Firework SafetyWith the Fourth of July holiday approaching, many people are preparing for gatherings with family and friends. All too often, however, Independence Day backyard celebrations can end up with a trip to the hospital for firework-related injuries.

The National Fire Protection Association (NFPA) says that roughly 18,500 fires are started annually by fireworks. Even a simple backyard sparkler can heat up to 2,000 degrees Fahrenheit.

If you choose to use fireworks at home, follow these tips to keep your holiday safe and fun:

Keep them outside. Never light fireworks inside, and always keep them far away from dry grass, plants, and other flammable objects.

Never point fireworks at others. Make sure your fireworks are not aimed at any people, animals, or property.

Take fire precautions. Keep a full bucket of water or a garden hose nearby and ready to go in case you need to douse the fireworks or anything they may ignite. Make sure you know where the nearest fire extinguisher is located.

Take a look at your outfit. Make sure you’re not wearing loose clothing when using fireworks.

Move back. When you’re lighting the fireworks (always one at a time), make sure no part of your body is directly above the device.  As soon as it is lit, move a safe distance away.

Douse them when done. Once a firework is done burning, soak it with water from the bucket or the hose before throwing it away. If one of your fireworks doesn’t seem to be working properly, do not pick it up or try to light it again. Douse it with water and then throw it away.

Protect pets. Provide a safe place indoors for your pets to stay during the festivities. Consider turning on the television to help drown out the pops and bangs from fireworks nearby.

If you have any questions or concerns, please do not hesitate to reach out to Gulfshore Insurance, we are here to make sure you have a fun and safe holiday weekend.

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.

PRS Realtor Insight Addressing Hurricane Season Insurance ConcernsHurricane 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.

Commercial Lines Cyber Losses in Construction Are on the Rise

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.


Cyber Losses in Construction












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:

cyber losses by type

 

 

 










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.

losses by source

 

 













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.

losses by info targeted














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.