Author: inswebkit

Managing Diversity – What An Employer Needs To Know

“Managing Diversity” is a critical human resources function for organizations large and small.  All too often, though, executives and managers lose sight of what diversity means from a legal and moral perspective, and the message then gets lost in the translation when it comes to the rank and file employee.

In 1997 the Department of the Interior identified diversity for its workforce as a crucial issue and provided the following definition of diversity for its own management purposes:

“The term ‘diversity’ is used broadly to refer to many demographic variables, including, but not limited to, racial, religious, color, gender, national origin, disability, sexual orientation, age, education, geographic origin, and skill characteristics…  Managing diversity is a comprehensive process for developing a workplace environment that is productive for all employees… The term ‘diversity’ is also used narrowly in employment recruiting and retention efforts to refer to race/national origin, gender, or disability…”

The EEOC (US Equal Employment Opportunity Commission) is the federal watchdog that oversees compliance for legislation such as Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, religion, sex and national origin.  Discrimination complaints filed with the EEOC have been on the upswing over the past four years, going from 77,444 in 1999 up to 84,442 complaints in 2002.  Small businesses with as few as fifteen employees are subject to Title VII, but determining who qualifies as an employee for the purposes of Title VII and other federal legislation is a tricky proposition and should be determined through consultation with an attorney or by researching the legislation directly.

Title VII is not the only federal law that applies to employment discrimination cases.    For example, the Immigration Reform and Control Act of 1986, the law that created the I-9 requirements for employers, also furnishes protection against discrimination because of national origin or U.S. citizenship. It applies to any employer with at least four (4) employees. The Civil Rights Act of 1866 (42 U.S.C. 1981) forbids employment discrimination because of race or color and applies to any employer, even if there is only one employee.

State laws such as the Texas Commission on Human Rights Act of 1983 (Texas Labor Code, Chapter 21) also apply to employment matters, so it is important to be aware of the complex patchwork of laws that may or may not apply to any employment situation.

The national jury-award median for employment-practice liability cases, which includes discrimination and retaliation claims, rose 44% in one year – from $151,000 in 1999 to $218,000 in 2000 – according to Jury Verdict Research’s ® report, Employment Practice Liability: Jury Award Trends and Statistics – 2001 Edition.

Though these facts and statistics point to the growing need for employers of all sizes to carry Employment Practices Liability Insurance (EPLI), the news is not entirely negative.   According to Risk and Insurance (online at www.riskandinsurance.com) there are more than 70 insurers providing EPLI coverage and companies with fewer than 50 employees can expect to pay as little as $5,000 to $10,000 annually for the coverage.   Also, many EPLI policies come with pre-arranged legal services such as hot lines for attorneys versed in employment practices law, often at no additional charge.  Contact us to explore your EPLI options and to find out more about managing diversity in your workplace.

Protect Yourself When Taking on a Remodeling Project

Due to sustained record low interest rates, many homeowners have elected to take on major home remodeling projects.  According to the National Association of Home Builders, approximately 26 million Americans spend more than 180 billion annually on home improvements.   In many cases, however, homeowners are not updating their insurance at the same time, leaving themselves extremely vulnerable.

Making sure you are appropriately insured should begin at the very start of a project.   A contractor should not be hired if they cannot produce their certificate of insurance.   The contractor should provide you with a copy of their certificate, which shows the type and amount of their insurance coverage.  This should include general liability, workers’ compensation and auto coverage, and the policy must be current.

It is equally as important to make sure that any subcontractors that your contractor brings in to the job are similarly insured.  This is particularly important now, as insurance rates for the construction industry have recently risen significantly.  You want to make sure a member of your remodeling team didn’t choose a coverage lapse over a premium increase.

When you choose to take on a remodeling project yourself, you must review your own coverage for liability and property damage issues, particularly when bringing in subcontractors to help with the work.  As the homeowner, you may be liable if they are injured during the scope of your project.  Even if your current policy covers any injuries related to the renovation, we often recommend that homeowners carry umbrella liability coverage, which would cover a claim beyond normal limits.

In addition to liability issues, it is key to increase your homeowner’s coverage based on the added value to your home.  Kitchen and bathroom renovations are the most common and tend to be quite costly.   They also substantially increase the value of a home.

Homeowners should use caution not to over-insure themselves.  Don’t increase your insurance based on the cost of the remodel.  You should determine how much it would actually cost to rebuild your home with the added improvements.  This replacement cost is the amount that needs to be insured.  The cost to remodel also includes tearing out old materials.  Therefore, in some cases, the cost difference to rebuild the home may be less than the actual renovation cost itself.

The most important item to consider is to contact your insurance agent to increase your homeowner’s limits before, not after, a renovation project.  This will ensure that you are covered should any fire or damage occur during a renovation.

Understanding the Role of Loss Mitigation Insurance

Loss Mitigation Insurance transfers an unknown or unwanted exposure from one company to an insurance company for a price. LMI caps what would otherwise be an unknown amount and is particularly effective if the company with the liability is in the process of merging or being acquired.

Employers of all sizes can benefit from a LMI policy. The coverage helps risk managers dispose of costly litigation that could damage the bottom-line and impair their ability to complete a refinancing arrangement. Before LMI, when an uncertainty in a merger or acquisition came up, both sides walked away until the lawsuit or financial impediment was resolved.

One solution used in such cases required the seller to deposit funds into an escrow account to cover the estimated losses from the claim or lawsuit. This tied up capital and there was no guarantee that the amount deposited would be enough to cover the final settlement. With a LMI policy, these problems can be resolved and the transaction put on track again.

LMI Takes Many Forms

There are several ways in which LMI programs can be structured. LMI can be underwritten to apply either in conjunction with, or independent of other insurance in force, such as Directors and Officers liability or general liability. For example, a deal to merge ABC Company with XYZ was delayed because of XYZ’s concern over the catastrophic exposure for a potentially adverse judgment against ABC. ABC arranged for a LMI policy to be written which responds if the loss exceeds the limits of ABC’s existing liability insurance. LMI relieved ABC of a potentially damaging award and the merger proceeded.

Another example of how a LMI policy helped solve a legal problem within a rigid time limit involved a consumer products company that was in the final stages of buying a company in an Eastern European country. The target company had been involved in litigation with a former employee regarding a patent and though most of the complaint had been dismissed, and a damage analysis of the remaining counts showed potential damages to be minimal, the purchasing company was reluctant to move forward. Further, the acquiring company’s option to purchase the Eastern European company was to expire in less than three months.

Although the investor wanted to exercise its option to purchase the company within the time limit, the patent litigation would not be resolved before that date. Also, the investing company was unfamiliar with the legal system in the target company’s country, which caused further concern. The solution: a LMI program was purchased by the target company that would cover excess losses from future settlements of the patent claim and the acquisition was completed before the time limit expired.

 

Premium Commitment

The size of the premium for a LMI policy depends on a combination of the risk analysis by the underwriter and the policy’s structure. Most LMI contracts are structured so the policy’s limits are never reached. If the policy is not breached, there is no claim. Because the risks covered by LMI policies usually have lengthy tails, it takes a long time for them to be settled, which permits insurers to realize investment gains from collected premiums.

Although LMI has only been written for a little more than five years, premium volume has skyrocketed from zero to more than $500 million annually in this time. Insurers are writing more of this coverage because underwriters have become more experienced in determining the extent of the exposure as well as drafting and pricing the appropriate policies.

An insurer’s willingness to underwrite LMI depends on the state of the insurance market and the availability of reinsurance. If the insurance market hardens, insurers have less access to the capital to support their underwriting efforts. In a soft market, insurers seek out opportunities to expand premium volume and are more willing to write LMI.

Insuring Your Vacation Rental Car: How to Prevent Being Over or Underinsured

While most people take the time before a vacation to research the best rates on rental cars, they generally forget to research insurance coverage for their rental car ahead of time. This can lead to costly mistakes either by being underinsured or by purchasing too much coverage.

To prevent either of these scenarios, car renters should spend a few minutes before a trip to make sure they are adequately insured.  Your insurance company will inform you as to what coverage on your own car applies to rental cars.  Generally when renting a car for pleasure, your personal auto coverage applies to the rental car.  However, if you don’t carry comprehensive or collision coverage, you will not be protected if your rental car is stolen or damaged in a collision and you should consider purchasing the rental company’s collision damage waiver.

When paying for the rental with your credit card, the company and/or bank which holds the credit card may also provide coverage.  Call the 800 number on the back of your card for more information.  Generally credit card insurance benefits are secondary to personal insurance policies and any insurance offered by the rental car company.  Be sure to ask for a written copy of the credit card company’s insurance coverage information.

Once this research has been conducted you should have a clear idea if you need additional coverage through the rental car company.  Costs and coverage varies from state to state, however, renters generally have the following products available to them:

Collision/Loss Damage Waiver
Costing between $9 and $19 per day, this “waives” financial responsibility for theft or damage to a rental vehicle other than for accidents involving such factors as speeding or driving while intoxicated.

Liability Insurance
While rental companies by law must provide a minimum of liability insurance; the coverage is usually so low that it does not provide enough protection.  Supplemental liability insurance costs between $7 and $14 a day for $1 million in liability coverage.

Personal Accident Insurance
For $1 to $5 per day, this offers you and your passengers coverage for medical bills resulting from a car crash. Your health insurance or auto policy personal injury protection may provide adequate coverage.

Personal Effects Coverage
For $1 to $4 per day, this insures against theft of items in the car.  Your home or renters insurance policy may also provide this protection.

Sarbanes-Oxley Act Changes Rules for Privately-Owned Businesses

Responding to a number of scandals involving fraud at publicly owned companies, the U.S. Congress in 2002 enacted a new law intended to make undetected fraud less likely to occur.  The law applies only to public companies, mainly those whose securities are registered in accordance with the Securities Exchange Act.  Even so, experts predict that it will have an enormous impact on private companies as well.

Among the changes many businesses, public and private, will undergo are creating mechanisms for fraud whistle blowing by employees, adapting to a different relationship with their external auditors, upgrading internal financial controls, becoming much more aggressive at preventing fraud, and improving audit committee accountability.  This magnitude of change is why the Sarbanes-Oxley Act has been variously described as “a paradigm shift” in how companies do business and “a whole new way of thinking about corporate governance.”

Some of the most notable of the act’s requirements include:

  • Management must certify the accuracy of their companies’ financial statements.
  • Management must attest to the effectiveness of their internal financial controls.
  • Outside auditors must attest to the accuracy of management reports.
  • The internal audit committee must have independence and must include financial experts.
  • Steps must be taken to improve fraud detection and prevention (e.g., an employee hot line for reporting fraud, training about fraud, a written corporate anti-fraud policy).
  • Auditors must proactively look for material misstatements in financial reports, evaluate opportunities to commit fraud, and maintain a skeptical attitude to the company’s reports.

 

Some experts predict that more private companies will fall under new rules similar to or the same as Sarbanes-Oxley as states enact new laws and apply them to private companies doing business in the state.

Many banks and insurance companies are demanding a higher standard of action to prevent fraud and are closely examining a borrower or insured’s fraud prevention efforts.  Private companies that deal regularly with banks and insurance companies, and those that are potential acquisition targets, might find that they must comply with new rules even though they are not required to do so by law.  While previously a banker’s only concern was whether they would get paid, now they are more likely to be concerned with whether management has done enough to avoid the risk of financial mismanagement.

Insurers, too, are engaging in increased oversight.  Prices are going up on coverage in every area of financial fraud and mismanagement risk. Underwriters are reviewing private companies’ financial statements much more carefully and sometimes require interviews to obtain additional explanations.

Customers, clients, professional services providers, and business partners of privately held companies want to avoid the spotlight of scandal and may insist on adherence to the principles of Sarbanes-Oxley.

Private company directors are also likely to push for stricter fraud-prevention efforts in light of a recent federal court decision that will hold them responsible for fiscal misconduct by company management under a standard of due care and loyalty just as directors of public companies are.  In Pereira v. Cogan, et al. (294 B.R. 449, S.D.N.Y. 2003) the judge ruled that directors at bankrupt Trace International Holdings Inc. failed in their responsibilities by allowing Marshall Cogan, Trace’s chairman and controlling shareholder, to drain company funds by drawing excessive compensation, loans, and dividends.  Significantly, the Trace directors were found to have violated their fiduciary duties irrespective of whether Mr. Cogan’s self-dealing actions were the result of, or enabled by, board action.

The court noted that, during the period in question, the Trace board held no meetings and that, when it acted, it did so by written consent.  The directors argued that they should not be liable, since they had not taken any action nor played any part in the improper transactions. But the court rejected this idea, noting that directors have a duty to be informed of significant corporate expenditures and to disapprove of those that are not in the best interest of the corporation or its shareholders.

It will be years before the full effects of this new climate of corporate financial accountability will be realized.  For many private companies, as for public ones, the likelihood is that there will be little choice but to change some of their practices and to spend more to prevent fraud and other financial mismanagement.

Is Your Car a Thief Magnet?

Everybody loves driving a nice car; but not everybody is willing to pay for one.  It is possible that a potential thief may be coveting your car even as you read these words. However, you don’t have to be left vulnerable. The savvy car owner knows that taking a proactive approach can lessen the likelihood of a vehicle being stolen.

The National Insurance Crime Bureau (NICB) is a non-profit organization whose mission is to fight insurance fraud and vehicle theft for the benefit of its member insurance companies, their policyholders, and the general public. As part of their public awareness campaign, they compile an annual list of the top ten most stolen cars. The list for 2003 by make, model, and model year included:

  1. 2000 Honda Civic
  2. 1989 Toyota Camry
  3. 1991 Honda Accord
  4. 1994 Chevrolet Full Size C/K 1500 Pickup
  5. 1994 Dodge Caravan
  6. 1997 Ford F150 Series
  7. 1986 Toyota Pickup
  8. 1995 Acura Integra
  9. 1987 Nissan Sentra
  10. 1986 Oldsmobile Cutlass

The NCIB also discovered through its research that in 2003, 1,260,471 motor vehicles were reported stolen at an estimated value of over $8 billion. Since recovery rates are only about 65%, that means a tremendous number of vehicles are either cut up for parts, exported to other countries, or reappear as clones, the latest trend in an ever-growing list of fraudulent car schemes.

But the organization doesn’t stop at compiling statistics. It has formulated what it calls its “layered approach” to auto theft protection by putting together some suggestions to make vehicles less attractive to thieves. NICB’s four layers are:

  1. Use common senseand take advantage of what’s already available to youThe first line of defense is to use the anti-theft devices that are standard on all vehicles  – the locks. Always lock your car and take your keys.
  2. Having and using a visible or audible warning device is another item that can abort a potential robbery before it happens.
  3. “Kill” switches, fuel cut-offs, and smart keys are examples of how technology can be extremely effective in stopping a thief in his tracks. Chances are, if your car won’t start, it won’t get stolen.
  4. The more expensive high tech tracking devices can alert you and law enforcement the moment an unauthorized driver decides to take your vehicle. Using one of these items will ensure that the local police will apprehend the car thief.

One final thing to remember about auto theft is that it doesn’t always happen when your car is use. It can happen when you take it to the garage for repair. Always be sure that when your vehicle is damaged, that you take it to a reputable repair shop. It is an unfortunate fact of life that some less than ethical garage owners can see your car as supplemental income by having it “stolen” and cut up for parts.  It is important to know whom you are entrusting your car to so that you don’t end up in the market for a new automobile.

Why Your Company May Need Product Liability Insurance

If your company manufactures any kind of product, from lemonade to engines, computers to clothing, it could easily find itself on the wrong side of a lawsuit by a plaintiff claiming your product(s) caused some kind of injury or damage. In today’s litigious society, it is not even necessary for you to be the manufacturer of the product. Sellers are often sued alongside the manufacturers.

It’s only natural that people want to be safe from injury and property damage whether from food poisoning, getting into an auto accident due to tire failure, or having the foundation of their home crack, but how do protect your company from liability? The answer may be with product liability insurance.

Most liability claims are covered as part of your company’s commercial general liability (CGL) policy. However, products that are particularly likely to lead to liability may be handled separately. As part of a sound risk management program, you should know well in advance how your current coverage would respond to such claims.

The CGL policy covers any bodily injury and property damage occurring away from your business premises that happens as a result of your product or completed work. If a product is consumed on the same premises, such as food served in a restaurant, the policy provides coverage once the insured has relinquished possession of the product whether the injury or damage occurs on or away from the premises.

The standard policy excludes damage to the product when the damage was caused by some part of the product itself or faulty workmanship in its manufacturing. For example, one small part in a complex, expensive piece of equipment may fail and cause tremendous damage to that equipment. If the part that fails was purchased from an independent subcontractor, the insurer of the manufacturer of that part would cover damage to the equipment. By contrast, if the manufacturer of the expensive equipment itself produced the piece that failed, the damage is not insured under the CGL policy.

Product liability exposure lasts as long as the product is in use. Someone may be injured or damage may result from use of the product years after it was manufactured and the product may no longer be in production. Product liability insurance should be kept in force as long as the products are being used and could cause injury or damage. Partnerships and sole proprietorships are especially vulnerable. These business owners cannot evade personal liability exposure by taking cover behind a corporate shield; thus, they need to take particular care to keep product liability coverage continuously in force. Because of the continued liability exposure, insurers require insured’s to provide detailed information about discontinued products.

The CGL provides coverage for product liability that may arise when products are sold internationally, but only if liability is determined by a lawsuit in the United States, Puerto Rico, or Canada. Since product liability lawsuits are often filed in the country where the alleged injury or damage occurred, any business whose products are sold overseas will need a foreign coverage endorsement added to its CGL policy.

Another type of coverage not provided by the CGL policy is the expense of a product recall, though this can be expensive and severely damaging to a company’s reputation. Separate product withdrawal expense insurance may be available depending on the particulars of your business and its product.

The basic premise of most product liability lawsuits is that the product manufacturer or vendor failed to take appropriate steps to insure the product was safe and sound. It is impossible to eliminate all hazards in connection with many products. No matter what you do, someone could fall off a ladder or burn themselves with a hair dryer, and so forth. To show that you did everything possible to prevent such injuries, it is critically important to communicate with buyers and users of the product about such hazards. The thing to remember is that if there is a lawsuit, your best defense is to prove you took all reasonable measures to assure no one would be injured.

Power Up After the Storm with a Generator for Your Home

Ask any Floridian and they’ll tell you that an emergency generator is like gold after a hurricane. Almost all of us live in a geographic area susceptible to earthquakes, hurricanes, tornados, or ice storms. In each of those disasters, a backup emergency generator can quickly become your most valuable possession.
Generators come in different sizes and types. The larger the generator the more items you can operate at once. You must balance your anticipated needs in an emergency with the cost of the generator.
Generally, there are two types of generators to choose from. The first type is the permanent standby generator. This generator is installed as part of the electrical system in your home or business and provides power directly to the building’s wiring. An automatic switch prevents the generator from “backfeeding” power to utility lines, as well as protecting the generator from damage once power is restored. Permanent standby generators must be installed by a licensed electrician and require inspection from your city or county building department.
The portable generator is probably more familiar to the homeowner. With a portable generator, you can physically move the generator to the location required, and hook up specific items directly to the generator. Most homes require a 5,000-watt generator, which cost between $500 and $3,000, depending on options and quality. You may also opt for a smaller unit, capable of running a few lights, fan, and a television. If you anticipate running a large appliance such as a full-size refrigerator, sump pump, or water-well pump, make sure your generator can start and maintain the item. You do not want to ruin the motor of your appliance because you tried to operate it with a small generator that could not provide the appliance with the proper electrical current.
Before shopping for a generator, evaluate what items you will need in an emergency and the amount of current they pull. Total the watts and look at generators that can operate the amount of wattage you require. If you are unsure, consult the item’s owner’s manual for information on how much wattage it uses. Also, keep in mind the type of emergency you anticipate. If you live in the northeast and expect blizzard conditions, a generator that will safely operate your furnace will prevent frozen pipes, as well as keep you warm. If you live in the coastal south and are planning for a hurricane, you will need a generator that can operate a cooling system, or at least a few fans, as well as your refrigerator. And any home that is supplied by well water will require the well pump to be on a generator if you want to flush the toilet.
As with any household appliance, there are some safety hazards associated with generators. As stated earlier, generators installed as part of your homes electrical system can backfeed current into your home, causing damage to equipment, or even cause a fire if not properly installed. Consult a qualified electrician to install this type of generator. Also, generators burn fuel and must be run outdoors. Generators should never be run in a garage or in any room that connects to the house. Cords to and from your generator should be properly sized to prevent overheating and damage to equipment. By following these straightforward guidelines, you can enjoy heating or cooling, unspoiled food, working bathrooms, and even a little entertainment during an otherwise disastrous situation.

Certificates of Insurance – A Prudent Means to Avoid Costly Claims

More and more companies are hiring independent contractors to handle not only administrative matters, such as benefits and human resources, but also sales and distribution. With this delegation of authority to third-party suppliers comes less direct control over these operations, and greater becomes the need for clients to demand that vendors provide them with timely Certificates of Insurance (COI).

The COI proves that the insured (the third party) has purchased the insurance coverages as required by the outsourcing client. But, the COI also states that the holder of the certificate has no legal right to be covered by the insurance described in the COI, nor does it amend, extend or alter the represented coverage. The COI only shows that the outside contractor has the insurance coverage as explained on the certificate. This protects the business that has contracted with the third party against liability for negligence caused by the independent contractor up to the limits of the policy.

It is the responsibility of the independent contractor to provide the COI to the client that has hired the firm. Usually a COI is prepared by an agent/broker with a copy sent to the insurance company and the client for whom the third party has contracted to perform certain functions.

The COI contains the name of the insured, the name of the insurance companies issuing the policies as stated on the COI, what specific coverages are contained in the insurance policies issued to the insured, and various descriptions of normal policy terms, exclusions and conditions.

Most often COIs are obtained for commercial general liability to provide protection from liability arising out of the insured’s premises or operations, products and completed operations. Usually, a general form will provide broad, standardized coverage terms. In cases, where the coverage is more complex and of a higher risk, manuscript forms of a COI can be written specifically by or for an insurance company. These manuscript COIs should be reviewed carefully for the scope of coverage being provided.

There are two types of general liability forms — claims-made and occurrence. The trigger that compels the policy to respond is the main difference between the two forms. In the occurrence policy, occurrences are covered that take place during the policy period, no matter when a claim is reported. A claims-made policy requires that the occurrence take place during the policy period and the claim be reported during the policy period. Most COIs use the occurrence form for all independent contractors as claims-made policies limit coverage.

But simply having a COI in hand does not always mean that the independent contractor has the insurance coverage. A prudent practice is to have a system to audit, review and correct the certificates to reflect the provisions in the contracts. Some clients establish an auditing program in house, while others have the insurance agent or broker manage the program as part of their fee arrangement. This cost depends greatly on the workload.

The consequences of not monitoring COIs of a third party can be costly for the firm that hired the contractor. Consider this sobering example. A business hired an independent contractor to provide distribution service for the company. An employee of the vendor had a serious car accident, and soon afterwards, the contractor ceased business. When the employee began submitting workers’ compensation claims, there was no coverage — the contractor had never maintained that insurance. Unfortunately, the company had not insisted on a COI from the independent contractor to verify this coverage. Casting about for payment of the claim, the court ruled that the vendor’s employee was a statutory employee of the company that hired the contractor. The workers’ compensation claims have totaled more than $100,000 with more to come.

This is just one of many chilling cases of companies that have been caught with unexpected losses that came from not requiring proper COIs from independent contractors and auditing them to make sure they remain current and reflect the actual coverages held by the insured.

Protect Your Possessions with an Electronic Home Inventory

Having a homeowner’s insurance policy is not enough to thoroughly protect all the possessions in your home.  Only by documenting your goods and updating the list on a regular basis, can you ensure you have enough insurance, settle claims faster and substantiate losses for income tax purposes.  The process of creating a home inventory may sound overwhelming, but technology has made it quite simple.

A traditional home inventory is a basic list of all belongings along with receipts to substantiate their value.  Camcorders and digital cameras have added much dimension to home inventories.  Video taped inventories are especially useful as you can narrate along with the video.

To create a video home inventory, walk through every room of your home and pan around the room with the camera.  Don’t forget to open drawers and closets to record and describe what items are there.  Whenever you can, note where you bought each item and its make and model.  Make sure to categorically include toys, music CDs and even clothing and linens, as the cost of replacing these items can be substantial.  Take particular note of expensive items including jewelry, furs and collectibles that may require additional insurance.

In addition to documenting your possessions electronically, make sure that you keep copies of supportive records including sales receipts, purchase contracts and appraisals.  Also, record the serial numbers for major appliances and electronic equipment.  Serial numbers usually can be found on the back or bottom of these items.

Follow the same steps when creating a digital photograph home inventory except make written notations about the items.  Whatever form your home inventory takes, take steps to ensure you store it properly.  Either print out the files or burn a CD.  Keep a copy in a safety deposit box or have a friend store it.   Keeping only one copy in your house will serve no purpose if your home is severely damaged by a fire or other widespread disaster.  The same is true if your sole electronic home inventory is wiped out through a computer hard drive crash.

In addition to annually updating your home inventory, it is important to update to include newly acquired items.  The Insurance Information Institute has created Home Inventory Software that is free to the homeowners and renters.  The “Know Your Stuff – Home Inventory Software” is available at www.knowyourstuff.org.  The software includes a customizable room-by-room list of possessions and can also store electronic images.