How would a $4.4 million loss affect your company? That’s the average cost of a data breach, according to IBM. Although data breaches have many causes and can affect businesses in any industry, tech companies are particularly vulnerable to recent cyberattacks targeting the technology supply chain. However, major losses aren’t inevitable. With a proactive and adaptive approach, tech companies can control their data breach risks and mitigate losses.

Tech Company Data Breaches

Data breaches involving tech companies can result in hundreds of thousands or even millions of compromised records. For example, PKWARE says 766,000 customers were affected by a data breach involving Motility Software Solutions, caused by malware, while a data breach involving Oracle Cloud compromised approximately 6 million records.

In some attacks, tech companies are a means to an end. A 2025 report from Intel 471 explains that extortion groups are targeting supply chains because it’s more efficient, scalable and profitable than going after individual organizations. By targeting a software provider or other vendor, cybercriminals can bypass cyber defenses and gain access to many downstream victims.

A recent incident involving Salesloft and its customers show just how serious supply chain cyberattacks can be. According to FINRA, threat actors stole OAuth authentication tokens and then used them to access customer environments. They succeeded in accessing Salesforce, Google Workspace and some Slack integration and were able to exfiltrate sensitive information. More than 700 organizations were ultimately affected by the attack. The attack targeted weaknesses in the Salesloft Drift chatbot, and it’s believed the attackers may have obtained tokens from previous phishing or social engineering attacks, allowing them to bypass multifactor authentication.

How Tech Companies Can Prevent Data Breach Losses

Data breaches can be extremely costly for tech companies. Beyond the direct expenses associated with investigating an incident, resolving the problem, and notifying those affected, tech companies may also face significant reputational damage and loss of trust. The good news is that robust, multilayered cybersecurity practices can prevent data breaches and mitigate losses.

1. Take precautions against non-hacker risks. Not all data breaches stem from cyberattacks. Some are the result of technical issues, such as vulnerabilities in API or cloud storage, or human error.
2. Consider the human element. Many attacks start with phishing messages, and now that cybercriminals are using AI, these messages can be more targeted and more realistic than ever before. Worker training can help with the identification of phishing messages, but training alone may not be enough. Other security measures, such as flagging external messages and requiring multifactor authentication, provide another layer of protection.
3. Continually up your defense. Secure configurations and cyber intrusion detection systems can help tech companies stay secure, but as attacks advance, defense measures need to advance, too. Right now, AI is giving companies a more effective way to monitor for and respond to threats. IBM says companies that use extensive AI in security lose $1.9 million less compared to companies that don’t use extensive AI.
4. Keep up with new trends in cyberattacks. It’s important to know what tactics cybercriminals are using now so you can be on guard. For example, hackers have been using email bombing or subscription bombing techniques to flood inboxes with emails, making it easy to hide important messages, such as account change notifications, that could alert the victim to a potential cyber breach.

Proofpoint says subscription bombing can flood inboxes with more than 1,500 emails per hour. If you experience an email bombing attack, it may be hiding a more sinister attack.

5. Assess the entire supply chain. Just as a data breach at your company could affect your partners and customers, any data breach involving one of your vendors could affect you. Review your contracts and insurance requirements to determine whether you’re managing your upstream and downstream risks adequately.
6. Main adequate insurance. For tech companies, both cyber insurance and tech E&O insurance provide critical protection. Review your coverage terms, including your limits, sublimits and exclusions. This will help you determine what coverage you have in place for various types of incidents, including ransomware attacks as well as social engineering attacks and data breaches stemming from human error or technical glitches.

Do you have sufficient insurance? Heffernan Insurance Brokers provides insurance for technology companies. Learn more.

Being underinsured can be a costly mistake. Although you may save a little in premiums now, you may pay the price when a loss occurs, and the consequences can go beyond straightforward financial harm.

Here are three ways being underinsured can hurt your business.

Uncovered Losses Can Threaten Your Bottom Line

A single loss can be incredibly expensive. According to Property Casualty 360, data from the 2025 National Small Business Risk Index shows that the average business liability claim has reached $97,200, up 18% since 2022.

Rising litigation costs have been a problem, and some jury verdicts have gone “nuclear” with awards of $10 million or more. A report from Sentry found that 82% of business executives say their business would be unlikely to survive a multimillion-dollar verdict, while 72% of executives acknowledge that increased litigation and large verdicts are a significant problem in their industry.

Delays Can Disrupt Operations

Lawsuits aren’t the only type of loss that can threaten your company’s survival. Cyberattacks, property damage, and equipment failure can force your business operations to stop.

Many business owners underestimate the impact of a disaster or assume it’s unlikely to happen, but disasters are a real threat, and they can devastate businesses. According to the U.S. Chamber of Commerce Foundation, most small businesses think they’re ready for a disaster, but only 26% actually have a business disaster plan. Recovery can take much longer than many business owners expect. After a disaster, roughly one-third of small to medium-sized businesses took at least six months to recover.

If you have appropriate insurance coverage, you can use it to get back to normal business operations as quickly as possible, while business interruption coverage can help make up for the losses. Without coverage, you’ll have to figure things out on your own, and that can take significant time.

A Poor Defense Strategy Can Harm Your Reputation

Liability insurers don’t just help with your litigation costs; they also help with your defense strategy.

For small and medium-sized business owners, lawsuits can be scary and confusing. If you can’t launch a good defense, you may end up being held liable when you shouldn’t be, and that can lead to substantial costs as well as damage to your reputation. There may also be times when you proceed with a costly legal process, when a settlement might have been a better option. Once again, this can be very damaging to your company’s reputation.

How Do Businesses Become Underinsured?

Businesses sometimes become underinsured when their policy terms are misaligned with their risk exposures, resulting in coverage gaps. For example, a standard general liability policy excludes pollution claims. That may be fine for some types of businesses, but in some industries, the lack of environmental coverage can be disastrous.

Underinsurance can also occur when policies fail to keep up with business growth. The terms that worked fine for you five or ten years ago may no longer be adequate if your business has hired more employees, increased its revenue or expanded into new operations.

In some cases, business owners may intentionally choose to go underinsured as a cost-saving strategy. This is essentially like gambling with your business. Eventually, you’re bound to experience a loss, and the decision to skimp on coverage will come back to haunt you.

What to Do Instead

When budgets are tight, businesses may be tempted to cut corners on insurance coverage, but that’s a risky move. Instead, it’s important to verify that you have appropriate coverage for your risks. Since your exposures can change over time, this requires regular reviews of your coverage.

If insurance costs are budgetary issue, you can work with your broker to find solutions. This may involve taking on a higher deductible or structuring your coverage differently. It could also involve managing your risks in a way that makes your company more attractive to insurance underwriters.

Heffernan Insurance Brokers can help you secure cost effective coverage for your business. We tailor insurance packages for a wide range of business types and budgets. Learn more.

Cannabis is big business. According to Markets and Markets, the cannabis market was worth approximately $72.83 billion in 2025, and it’s expected to reach $125.76 billion by 2030. But while increased demand is fueling growth, the industry is also vulnerable to losses. Strong risk management is crucial at every stage.

Protecting Your Cannabis Grow Operation

Cannabis grow operations involve risks to both the crop and the workers who handle the crop.

Natural disasters are a major threat. Excessive rainfall, hard freezes, and hail can all damage crops. Wildfires also pose significant risk, and the fire doesn’t necessarily have to burn the crop to result in losses. Smoke taint can affect the smells, flavor and appearance of cannabis, and smoke from fires involving chemicals can result in more serious contamination. ABC 11 says cannabis growers were worried about smoke taint after the 2020 wildfires. Research published in Science Advances shows that hot temperatures and extreme fire weather are on the rise, so cannabis growers and other growers may face this problem more in the years ahead.

Hot weather also impacts workers. The Milken Institute School of Public Health says that nearly 28,000 worker injuries are linked to hot weather every year. Injuries increase when the heat index reaches around 85 degrees F. Some states, including California, have recently enacted worker safety standards.

Aside from heat, pests are an issue, and pesticides can also become a problem when the crop becomes contaminated. In late 2025, marijuana was recalled from close to 300 dispensaries in Colorado due to unsafe pesticide levels, according to CBS News.

How can cannabis growers protect themselves? Prevention is crucial. For example, growers can develop and implement a heat illness prevention plan to protect workers from heat-related injuries. A strong insurance package that includes responsive workers’ compensation coverage and marijuana farm insurance or hemp crop insurance is also a critical part of risk management.

Protecting Your Cannabis Manufacturing Business

Once cannabis moves to the manufacturing stage, it faces a new set of risks.

Worker safety is still a key issue, and indoor workers can also suffer from heat-related illness. Workers in cannabis manufacturing are also frequently exposed to cannabis dust that can have negative health effects.

According to the Missouri Independent, a consultant experienced an asthma attack that triggered a heart attack after a lab technician mishandled a vacuum and blew marijuana dust into the air. A jury awarded him $3 million.

Research published in the Journal of Occupational and Environmental Medicine finds that cannabis industry workers are vulnerable to work-related asthma. At least 30 cases have been identified, including two fatalities.

Product liability and safety issues are also a serious exposure during manufacturing. In addition to the risk of pesticide contamination from the growing phase, cannabis can become contaminated with mold or mildew during production. Labeling mishaps are also serious given the nature of the product.

How can cannabis manufacturers protect themselves? In light of increased awareness surrounding work-related asthma risks, companies may need to assess their ventilation and personal protective equipment policies. Strong workers’ compensation, product liability and product recall coverage are also key.

Protecting Your Assets During Transportation

Transit is a risky phase in any industry, and cannabis distributors need to manage collision risks. Cargo theft is also a growing problem. According to CargoNet, cargo theft losses reached $725 million in 2025, and Cybersecurity Dive says that cybercrime groups have been working with organized crime groups to orchestrate cargo theft.

How can cannabis distributors protect themselves? Driver safety is key, and companies can support safety on the road through strong hiring and training practices, as well as the use of telematics and driver monitoring technology. Security is also important, especially at warehouses and truck stops, where CargoNet says most cargo theft incidents occur, as well as cybersecurity. Distributors can also protect themselves with robust insurance that includes cyber and crime coverage as well as fleet coverage.

Protecting Your Cannabis Retail Business

Cannabis dispensaries have emerged as a common target for thieves. In many attacks, the thieves use a car to ram into the building so they can gain access to the product and cash inside. In one recent example, KLEW News says a car crashed into a dispensary near Pullman around 2:20 in the morning. The suspects, who appear to have stolen some product, were not located.

How can dispensaries protect themselves? Strong security and physical barriers to prevent crash-and-grab attacks can provide some protection. Robust workers’ compensation and property insurance are also essential.

Is Your Cannabis Company Protected?

Shifting regulation and legal status can complicate matters for cannabis companies, but Heffernan Insurance Brokers offers quality cannabis insurance you can count on. We cover growers, manufacturers, distributors, testing labs and retailers as well as other ancillary businesses, such as medical marijuana physicians and marijuana conventions. Learn more.

Tax season is here, and both individuals and businesses will be busy gathering forms and filling out paperwork. While you’re focused on maximizing your deductions and meeting the April 15 deadline, also watch out for tax-related risks and common tax scams.

File Early to Protect Yourself

If you wait until the last minute to file your taxes, an identity thief might beat you to it.

Tax-related identity theft is a common and growing problem. In a common scam, someone files a fraudulent tax return using another person’s Social Security Number and then claims the refund. When the victim eventually tries to file a real tax return, they can’t because a return has already been filed and a refund has already been issued.

One of the best ways to protect yourself from tax-related identity theft is to file your taxes early in the tax season. The longer you wait, the more time scammers have to swoop in and steal your refund.

Get an Identity Protection PIN

Another way to protect yourself from tax-related identity theft is to get an Identity Protection PIN (IP PIN) from the IRS. If you have an IP PIN and someone tries to file a fraudulent tax return using your Social Security Number or Individual Taxpayer Identification Number, they will be unable to do so without the IP PIN.

If you already have an online account with the IRS, you can get your IP PIN through your account. If you don’t have one yet, you can create one. In addition to being the easiest way to get an IP PIN, your IRS account also gives you access to tax records, payments, balances and more.

For your protection, the IP PIN changes each year. You can find your new IP PIN by logging into your IRS account and looking at the Profile tab.

Be Cautious When Sending Payments or Information

In California, MyNews4 says the Douglas County Sheriff’s Office patrol deputy found more than $507,000 in stolen mail, including many personal checks addressed to the IRS. The thieves stole the mail by putting a device with rat trap glue into the opening of a mailbox and then pulling out the device.

Mail thieves may target letters headed to the IRS because they know there’s a wealth of personal information inside, including names, birthdates and Social Security Numbers. There may also be checks that they can alter in order to drain money from your bank account. The FBI says mail theft-related check fraud is on the rise, with reports of check fraud nearly doubling from 2021 to 2023. Refunds from the IRS may also be intercepted by mail thieves.

Checks left in residential mailboxes overnight or in USPS collection boxes after the last collection of the day are particularly vulnerable. If you need to mail checks or paperwork containing sensitive information, do so directly from inside the post office.

Sending and receiving payments electronically may be safer, but make sure you’re using a secure network and trustworthy tax filing companies.

Watch Out for Imposters

The IRS doesn’t want you to pay tax debts using Amazon gift cards or bitcoin transfers.

Fraudsters often pose as IRS employees and threaten arrest or fines to force victims to act quickly. Don’t fall for it. If someone calls you demanding immediate payment, it’s safe to assume it’s a scam. That’s simply not how the IRS operates. You can always hang up and call the IRS directly at 833-678-7020.

Scammers may also pose as tax professionals. If someone offers to do your taxes for a low rate and promises a big refund, it could be a scam. Do research to ensure any tax professionals are legitimate.

Take Immediate Action if You Are a Victim

If you believe you have been a victim of a tax-related scam or fraud, it’s important to take action as quickly as possible to minimize the damage.

If you suspect that someone has used your information to file fraudulent tax return, you can report this to the IRS by completing Form 14039. This can be done online or by mailing or faxing a paper form to the IRS. You can also report IRS impersonation scams to the IRS and to the FTC.

Heffernan Insurance Brokers is here to help you manage your risks. If you have any questions about risk management, identity theft protection, or cyber insurance, contact us.

Are your units habitable? When landlords and property managers don’t maintain properties and fix issues promptly, they can be hit with habitability lawsuits, and juries have been handing down large awards. In addition to increasing landlord liability, the litigation trend is also affecting landlord insurance coverage.

Trends in Habitability Lawsuits

Tenants may sue landlords for failing to maintain habitable properties. When these lawsuits occur, they can involve multiple tenants and span years of residency, contributing to complex and costly litigation.

Not every lawsuit makes the news, but there are several news stories of recent habitability lawsuits.

• More than 200 tenants brought a lawsuit against an apartment complex in Colorado alleging long-term uninhabitable conditions. According to CBS News, a jury awarded tenants a 31.42% rent reduction for those who lived in the complex from late 2018 through mid-2022.
• A jury in Kansas City awarded $40,000 to a tenant. According to the Kansas City Defender, the tenant says she dealt with a rat infestation, sewage backup, and other problems for months. She withheld rent due to the conditions. The landlord initiated legal action to recover the unpaid rent, and the tenant countered with habitability claims.
• A Nevada jury has awarded $6.6 million to three tenants. According to Multifamily Dive, the tenants say they lived in an apartment unit for three months, and during that time, toxic mold stemming from unfixed leaks negatively affected their health. One of the tenants, a child, experienced an asthma attack and had to go to the hospital.

CRC Group says California juries have been handing down larger awards, sometimes seven figures, in habitability cases. Insurers have responded by adding exclusions that reduce their risk. As a result, landlords may have difficulty securing coverage for claims related to certain habitability hazards.

When Is a Unit Uninhabitable?

Habitability standards can vary by jurisdiction, depending on the state and local laws in place. To determine exactly what is required, landlords and property managers should review all relevant laws.

Common habitability standards may include the following:

• The unit and common areas must be free of pests and mold.
• The plumbing system must function, so tenants have access to running water, and there must be a functioning toilet.
• The electrical system must function and be up to code.
• A functioning heater and/or air conditioner may be required.
• Units may require working smoke and carbon monoxide detectors. Landlords may also be required to provide working fire extinguishers.
• The common areas must be free of garbage, and tenants must have access to adequate garbage bins.
• Structural Integrity. The unit and common areas must be structurally sound with no hazards.
• Water Intrusion. The unit must be free of water leaks.

What Rights Do Tenants Have?

Tenant rights vary based on state and local laws. However, in many jurisdictions, tenants have a right to a habitable living space and prompt repairs.

If the landlord or property manager does not make repairs or address habitability issues, the tenant may have the right to withhold rent or deduct the cost of repairs that they have paid for themselves. This is highly dependent on the location and the relevant laws.

For example, in Los Angeles County, repairs are considered urgent if they pose a health or safety risk, such as a broken heater during the winter, bad electric wiring, infestations, or a lack of hot water. Urgent repairs must be handled immediately. If the landlord fails to address urgent repairs immediately, the tenant has several options, including moving out, withholding rent, deducting the cost of repairs from rent, or suing the landlord.

How Can Property Owners and Managers Protect Themselves?

For property owners and managers, allegations of uninhabitable conditions can be costly, resulting in lost rental income and legal expenses. Insurance exclusions could also leave landlords without coverage for certain types of claims.

Property owners and managers can protect themselves by doing the following:

• Make sure tenants can always reach someone for emergencies. Water leaks, burst pipes, broken heaters and other urgent problems don’t always happen during regular business hours. Tenants should have an easy way of reporting emergencies.
• Respond to issues promptly. Urgent issues require immediate attention.
• Keep records. In case there are any disputes, keep detailed records of all repairs and maintenance, as well as logs of tenant requests and your response.
• Know your responsibilities. Specific requirements vary greatly, and new rules can create additional requirements. For example, Los Angeles County recently passed an ordinance establishing new cooling requirements in rental units. Review the laws and keep up with changes.

One more tip: make sure you have solid landlord insurance. Heffernan Insurance Brokers provides customized real estate insurance to protect your properties. Learn more.

From its complex supply chain to the importance of high safety standards, the nature of the food industry creates unique risks.

Consider the following scenarios:

• A mix-up causes a product to be mislabeled, and as a result, allergen information is not disclosed correctly. The product needs to be recalled, which involves notifying consumers and stores, collecting and disposing of the product, and issuing refunds. The company is also facing multiple lawsuits and the risk of a class action lawsuit.
• A food manufacturing company does not receive a shipment of wheat required for production because the vendor has experienced a major natural disaster. As a result, the food manufacturer cannot make its product or fulfill its contractual obligations, resulting in significant profit loss.
• An important piece of equipment at a meat processing facility breaks down unexpectedly. As a result, production is down by 30%, and there is a risk of spoilage due to the backlog, resulting in significant profit losses.
• A truck transporting cooking oil to grocery stores is involved in a collision. The truck turns over, and the shipment spills onto the highway and into a nearby creek. In addition to the damage to the truck and the lost shipment, the company is now facing environmental cleanup costs.
• A hacker poses as a customer and succeeds in diverting a large shipment. The shipment is stolen, and the actual customer is demanding the shipment they paid for. Now the company is out the value of the shipment and needs to appease an angry customer.
• A food manufacturer sends shipments to a long-term customer, but the customer stops paying. While trying to recover payment owed, the customer suddenly declares bankruptcy and shuts down. Now the food manufacturer must absorb the cost of the shipments with no way to recover payment.

Specialized Food Industry Insurance

A standard commercial insurance policy has exclusions and restrictions that can leave food companies exposed to uncovered losses.

Do you have sufficient coverage for risks related to the following?

• Food contamination. When food is tainted with bacteria, mold, allergens or other contaminants, food companies are tasked with managing food recalls, and they may also face regulatory action and litigation. In addition to substantial direct costs, companies may also face brand damage and indirect expenses. An experienced broker can help you secure robust coverage for product liability, product recall and brand rehabilitation, as well as excess limits.
• Supply chain disruption. Food manufacturers can suffer losses when vendors fail to deliver on time, or when customers do not pay for deliveries. An experienced broker can help you obtain trade credit and contingent business interruption coverage.
• Cyberattacks and crime. Criminals sometimes use social engineering tactics to divert shipments or payments, and NPR says hackers and hijackers have been working together to steal cargo. An experienced broker can help you ensure adequate crime and cyber coverage with comprehensive social engineering protection.
• Equipment malfunction. Standard property insurance does not include coverage for equipment breakdown. For food manufacturers that rely on expensive machinery to continue essential operations, a lack of coverage can be risky. An experienced broker can help you secure equipment breakdown coverage.
• Pollution liability. General liability insurance typically excludes pollution and environmental liability claims. Although pollutants often involve things like petroleum products, toxins, and industrial materials, certain food items, grease, and food-borne contaminants could also contribute to pollution claims. An experienced broker can help you acquire pollution liability insurance.

Are you confident that your broker is knowledgeable about every aspect of food industry risk? Does your broker have access to the best markets and rates for your industry?

Heffernan Insurance Brokers offers insurance and risk management programs designed for food industry businesses, including growers, packers, manufacturers and distributors. In addition to standard commercial coverage types, such as auto, property and general liability, we can help you secure specialty food industry insurance that meets the needs of your operations.

Learn more.

Could uncovered risks disrupt your school? A robust insurance program can help your school manage its risks and stay focused on providing a quality education.

Insurance for Religious Schools

Religious schools require thoughtful, comprehensive insurance programs that may include:

• Property Insurance
• General Liability Insurance
• Abuse and Molestation Insurance
• Educators Professional Liability Insurance
• Employment Practices Liability Insurance
• Auto Insurance
• Cyber Insurance
• Workers’ Compensation Insurance
• Directors and Officers Insurance

While some of these policy types are standard for organizations in any industry, religious schools may require specific policy terms to cover their unique risks adequately.

Religious School Risk Scenarios

To see why religious schools can benefit from specialized insurance programs, consider the following risk scenarios:

• A teacher shares her political views with her students, and some of these views run counter to the religious teachings of your organization. After several parents complain, you decide not to renew the teacher’s contract. The teacher then sues for wrongful termination and discrimination.
• A student is assaulted by another student while on a field trip. The parents sue your school for failing to provide a safe environment.
• A student is bullied by several classmates. Most of the bullying mainly occurs outside of school hours, largely online, so your school does not intervene. The parents sue the school for failing to keep the student safe.
• A large storm hits the region. Your school is located in an old building that predates many modern code requirements. The building is severely damaged, and it will have to be brought up to code during repairs, adding to the total costs.
• A former student files a lawsuit accusing a teacher of inappropriate conduct and abuse. The teacher in question no longer works at the school, and you’re unsure of how to approach your defense.
• A ransomware attack targets your school. Critical files are encrypted, and this interferes with daily operations. Even worse, sensitive student files have been exposed, and some of the families plan to sue the school for failing to keep the records safe.

Why Insurance Coverage Deserves Another Look Now

Adequate insurance coverage is always important, but current factors make it essential to give your policies a thorough review.

• Increased Frequency and Severity of Natural Disasters. Schools in historic buildings may be particularly vulnerable to damage from storms and fires. If your school is not in compliance with newer codes, also consider purchasing ordinance or law coverage to pay for the extra costs associated with bringing your building up to code during repairs.
• Political and Social Upheaval. From debates over gender ideology to political disputes, this is an especially contentious period, and schools are often caught in the middle. Policies regarding pronouns and preferred names, bathrooms, and sports team eligibility may come under scrutiny.
• Statute of Limitations Reform. New state laws make it easier for victims of childhood abuse to seek justice years later. This has greatly increased the risk of lawsuits alleging abuse and molestation. As a result, insurance is harder to find and more expensive to buy right when coverage is needed the most.
• Cyber Risks. Rapid adoption of technology among both schools and students has led to a new host of risks. Ransomware attacks and data breaches are only part of the problem. Schools could also face lawsuits over cyberbullying among students.
• Rising Litigation Costs. When lawsuits occur, they are increasingly expensive. There are several reasons for this, including rising defense costs and a growing tendency toward massive jury awards.

Is Your School Managing Its Risks?

Religious schools face many of the same risks as larger, public schools, but they often lack the resources that could help manage these risks and defend against claims. At the same time, the religious nature of these schools can add complexity to certain issues, increasing the risk of liability claims.

Heffernan Insurance Brokers can help religious schools manage their risks. We offer an insurance and risk management program that caters to the needs of the education sector, including religious schools. We’ll work with you to help you secure the coverage you need with the specific policy terms that will provide protection if you ever face a claim. Learn more about insurance for religious schools.

Are hidden risks threatening your hospitality business? Running a hotel or restaurant can be lucrative, but it can also be risky. You’re managing a significant workforce, welcoming the public onto your premises, and dealing with sometimes-sensitive issues related to food and accommodations – there’s a lot of room for things to go wrong. Are you certain you have everything under control?

What Risks Do Restaurant and Hotel Owners Face?

Restaurants and hotels face a wide range of risks. Some common claims include:

• Workers’ compensation claims stemming from back injuries, burns, and other worker injuries.
• Property damage from fires, storms, or vandalism.
• Third-party liability resulting from slip-and-fall incidents, foodborne illnesses, and other customer injuries.
• Employment practices lawsuits arising from allegations of wrongful termination or other employment actions.

However, these risks represent just the tip of the iceberg. Other hospitality risks could also threaten your business, and if you’re not prepared for them, they can be especially damaging.

1. Customer Discrimination Allegations

Employees aren’t the only ones who can file lawsuits alleging discrimination. Customers can also make claims against businesses, and these lawsuits are surprisingly common.

For example, a customer could claim that your business violates the Americans with Disabilities Act (ADA) because it is not wheelchair accessible, does not provide wheelchair accessible restrooms, or does not provide an accessible website. That last category of litigation is on the rise, according to Fisher Phillips, which says that plaintiffs’ lawyers have been accusing publicly available websites of being inaccessible to users with disabilities.

2. Food Allergies

If a dish is contaminated with E. coli or salmonella, that’s obviously bad news, but what if it’s “contaminated” with common allergens, such as eggs, soy, or wheat? According to Food Allergy Research & Education (FARE), food allergies are on the rise, with the prevalence of food allergies among children increasing by 50% between 2007 and 2021. Approximately 10% of adults have a food allergy, and some can be lethal.

Unfortunately, food allergies aren’t always taken seriously. If a restaurant or hotel worker states that an allergen is not present in a dish, but it is, the business can be held liable, and lawsuits are common.

In one recent example, WDW News Today says a woman is suing Walt Disney World over allegations that the staff at a restaurant at the park ignored her life-threatening allergy. She experienced an allergic reaction after eating a salad and had to spend three days in the hospital.

In another case, Newsweek says a man is seeking up to $1 million in a lawsuit against Whataburger after the restaurant allegedly served him a burger with onions despite his request to leave onions off due to his allergies.

3. Liquor Liability

For restaurants and hotels, liquor sales can be a major source of revenue. If they’re not careful, however, liquor sales can also be a major source of liability.

Serving underage patrons is an obvious problem, and it can land hospitality businesses in hot water, exposing them to fines, risking their liquor license and possibly even leading to criminal charges. Overserving is another risk. Many states have dram shop laws that can hold bars, restaurants and other businesses liable for injuries or deaths that occur after overserving someone.

Lawsuits are fairly common. In one case, Long Island Press says a family is suing two restaurants accused of overserving a man who went on to cause a crash that killed two teens.

4. Cyberattacks

Restaurant and hotel owners are likely aware of the rise of cyberattacks, including phishing scams, ransomware and data breaches, but they may still be underestimating their exposures.

Hotels and restaurants typically store sensitive information, including financial records, so they are prime targets for data breaches and ransomware. Many hotels and restaurants also rely on computer systems for operations, so a cyberattack could make it impossible to take orders, make reservations, check in guests, or even lock and unlock rooms. According to Bitdefender, a resort in Austria decided to get rid of smart locks after it was hit by ransomware three times in a less than a year. While its systems were down, the resort was unable to issue new room cards.

According to NBC News, a cyberattack against MGM Resorts resulted in losses of around $100 million. While attacks against huge companies tend to make headlines, hackers also target smaller businesses.

Are You Covered?

Even if you have standard insurance, coverage gaps could leave you exposed to hidden risks. Heffernan Insurance Brokers provides insurance designed for the hospitality sector, including hotels and resorts. Learn more about our specialized risk management and insurance programs for hotels and restaurants.

Did you know that February is Heart Health Month? All the hearts you see for Valentine’s Day serve as a good reminder to think about your actual heart. This time of year, many people are in new health plans, so it’s also a good time to review the plan benefits that can support heart health.

A Death Every 34 Seconds

The CDC says that heart disease is the leading cause of death for men and women. In 2019, more than 900,000 people died of cardiovascular disease in 2023 in the United States, accounting for one out of every three deaths. A person dies an average of every 34 seconds from heart disease.

Heart disease is also expensive. The CDC says heart disease was responsible for costs totaling around $418.9 billion from 2020 to 2021. This includes healthcare services, medicines and lost productivity due to death.

What Is Heart Disease?

Heart disease is also known as heart and blood vessel disease or cardiovascular disease. According to the American Heart Association, it includes several health problems, many of which involve a build-up of plaque in the walls of the arteries, a condition known as atherosclerosis, which can cause a heart attack or stroke.

Some people have a higher risk of heart disease. For example, the CDC says people with diabetes have twice the risk of developing heart disease, and the longer you have diabetes, the greater your risks. However, you can take steps to reduce your risk.

How to Reduce the Risk of Heart Disease

Whether or not you have an elevated risk of developing heart disease, you can reduce your risk through lifestyle changes and healthy habits.

• Exercise regularly. The CDC says adults need at least 150 minutes of moderate-intensity exercise a week, plus two days of muscle-strengthening activity.
• Get a good night’s sleep. According to the National Institute of Health, experts recommend seven to nine hours of sleep a night for adults.
• Quit smoking. Smoking increases your risk of heart disease significantly, so quitting is one of the best things you can do for your health.
• Limit your alcohol consumption. Alcohol also increases your risk of heart disease, so drinking in moderation (or not at all) can reduce your risk.
• Eat heart-healthy foods. The National Institute of Health recommends eating fruits, vegetables, whole grains, fat-free or low-fat dairy, protein-rich foods, and oils and foods high in monosaturated and polyunsaturated fats. Limit salt, saturated fat, added sugars and alcohol.
• Maintain a healthy weight. You can use the CDC’s BMI Calculator to see if your weight is considered healthy.
• Some stress is normal, but chronic or excessive stress can contribute to your heart disease risk and make it harder to stay healthy.

Using Your Health Benefits to Protect Your Heart

Your health plan may include benefits that can help you stay heart-healthy. Some common benefits include:

• Smoking Cessation Programs. Quitting smoking can be hard, but treatments and programs can increase your chance of success, and your health plan may cover the costs.
• If excessive stress is interfering with your health, counseling may help. Check your health plan for coverage.
• Sleep Treatments. If you’re unable to get a good night’s sleep, it may be because of sleep apnea or other health problems. Talk to your doctor and check your health plan for coverage.
• Diabetes Screening. The CDC says 98 million Americans have prediabetes, putting them at a greater risk of developing diabetes and heart disease, but most of them don’t know it. Knowing you have prediabetes can empower you to make changes to lower your risk, so screening is important, and most health plans cover it.
• Heart Disease Screening. Your doctor may recommend blood pressure tests, cholesterol tests, and other tests to determine your risk and whether you need to take medication or make lifestyle changes to lower your risk. Check your health plan for details, but most plans cover preventive screenings.
• Your doctor may recommend certain medications to manage your risks and improve your heart health. Check your health plan for coverage.

Every year, thousands of people die of heart disease, but most of these deaths can be prevented. This February, take steps to protect your heart, and spread the word to help others do the same.

Does your health insurance provide the benefits you need to protect your health? Heffernan Insurance Brokers can help you with Medicare and Employee Benefits.

Do you have the insurance you need to protect you from losses? Contractors take on big risks, and without adequate coverage, common disruptions can derail business. Take a moment to review your contractor insurance coverage to ensure you have the right policies to protect your business in 2026.

General Liability Insurance

General liability insurance covers third-party claims involving bodily injury or property damage occurring on your business premises or resulting from your operations. Standard policies also provide coverage for personal and advertising injury claims.

Why do contractors need general liability insurance? Construction sites can be dangerous places, and not all incidents involve workers. For example, someone walking by your operations could be injured by debris. Commercial general liability insurance is a staple of insurance coverage for contractors, and it’s often required by state licensing boards and project managers.

Contractors Professional Liability Insurance

Contractors professional liability insurance (CPL), also known as errors and omissions insurance, is distinct from general liability insurance. It covers claims alleging financial loss stemming from negligent or substandard professional services.

Why do contractors need professional liability insurance? Problems with construction design can lead to major financial losses, making CPL insurance critical for contractors that provide design services. For example, a flaw in design could delay the business opening of a commercial client, leading to lost revenue.

Commercial Auto Insurance

Commercial auto insurance can provide coverage for your vehicles as well as third-party claims involving bodily injury or property damage. A hired and non-owned endorsement adds business liability coverage for when workers use personal or rented vehicles for work.

Why do contractors need commercial auto insurance? A collision can disrupt operation in two ways – first by damaging the vehicle you depend on for work, and second by exposing your company to liability. Whether you’re using vehicles owned by your company, personally owned by workers, or rented, you need adequate commercial auto insurance.

Inland Marine Insurance

Inland marine insurance provides coverage for property while in transit or in off-site storage. It typically provides coverage for many common losses, including fire, storm, theft and vandalism, and can protect your equipment and supplies.

Why do contractors need inland marine insurance? Contractors frequently haul expensive supplies and equipment to different sites. Your commercial auto insurance covers your vehicle, but it doesn’t cover the items you’re transporting.

Workers’ Compensation Insurance

Workers’ compensation provides coverage for work-related injuries and illnesses, including compensation for missed work and medical care. It works on a no-fault basis, meaning workers do not need to sue their employers or prove fault in order to file a claim. As such, it protects the worker by ensuring that compensation is available, and it protects the employer by preventing costly legal battles.

Why do contractors need workers’ compensation insurance? Workers’ compensation is vital in any industry, but it’s especially important in construction, which is a high-risk sector known for a significant injury rate. States typically require workers’ comp for most employers, and there may be special requirements for contractors. For example, California requires contractors to carry workers’ comp coverage whether or not they have employees.

What Else Do You Need?

In addition to the core insurance policies every contractor needs, you may require additional policies. It depends on your business – what you do, who you work with, and where you operate.

Common policies for contractors include:

• Pollution Liability Insurance: Standard general liability insurance excludes pollution or environmental claims, so pollution liability coverage is critical for contractors. It can be added as an endorsement, but you may prefer to secure standalone coverage.
• Builders Risk Insurance: Written on inland marine insurance forms, builders risk insurance is designed to cover property during construction and renovations. It’s essential for projects, but it’s often purchased by the property owner.
• Umbrella Insurance: A series of claims or a single severe claim can wipe out your coverage limits and leave you responsible for the difference. Umbrella insurance bolsters the coverage offered by your underlying policies to provide you with superior protection.
• Cyber Insurance: As contractors become more reliant on computer systems, cyber insurance is becoming increasingly important. If a cyberattack could shut down your operations, or if you hold sensitive data, consider adding cyber insurance to your contractors insurance package.

Contractor Insurance 2026 Review

Contractors insurance is one of the more complicated types of commercial coverage. A broker who specializes in the needs of contractors can help you review your coverage for 2026.

• Do you have the right policy types? In addition to the core policies listed here, you may need other policy types or endorsements.
• Is your coverage structured optimally? It’s important to make sure your insurance is structured optimally to provide robust coverage at the best price possible.
• Is everyone covered? When working with vendors and subcontractors, careful attention must be paid to the contracts and insurance terms.

Heffernan Insurance Brokers offers construction insurance and risk management program for contractors. Learn more.

Mergers and acquisitions represent opportunity, momentum and transformation. They are also milestones involving accelerated risk and increased scrutiny. By understanding and insuring against the risks, you can protect your company, its leadership and your deal value.

M&A Trends

Merger and acquisition activity is increasing. According to Reuters, research from the Boston Consulting Group shows that deal volume hit $1.938 trillion between January and September 2025, a 10% year-over-year increase. This shows that despite some uncertainty regarding U.S. tariff policies and geopolitical conflicts, deal activity is strong.

Much of the activity occurred in the third quarter of 2025, when Deloitte says the U.S. M&A market experienced a dramatic turn. The value of deals rose by 56%. Heading in 2026, Deloitte calls for deal making optimism in light of these figures.

For the individual businesses navigating deals, mergers and acquisitions represent an exciting opportunity to supercharge growth. However, a deal can also be a perilous time, with a heightened risk for litigation from investors, employees, competitors and other parties.

D&O Risks

Merger and acquisition activity is often associated with D&O risks, and for good reason. Statements and disclosures are subject to close scrutiny, and allegations of misrepresentation or breach of fiduciary duty are common. Although the risks are fairly well known for public companies, private companies can also face D&O exposures during dealmaking.

Insurance Considerations: Prior to a merger or acquisition, talk to your broker to discuss your D&O insurance needs. It’s important to secure coverage that protects activity leading up to the deal as well as actions that take place after the deal. Consider how the common change in control provision affects your coverage and whether you have adequate tail coverage.

Employee Risks

Joining two companies is a little like joining two families – although the union is exciting, conflict is common, and people don’t always get along. The two workplace cultures may clash, and this may lead to allegations of a hostile work environment, resulting in lawsuits. When employees are made redundant, wrongful termination lawsuits are also possible.

Insurance Considerations: Employee practices liability insurance provides important coverage for lawsuits alleging discrimination, harassment, wrongful termination and other similar employment-related claims. Prior to a merger or acquisition, review your coverage. Also consider whether you need to increase your limits. A larger company has more employees and a greater risk of litigation as a result.

Compliance and Regulatory Risks

Prior to a merger or acquisition, companies may face antitrust challenges. However, the regulatory scrutiny does not end there.

After a merger or acquisition, a myriad of compliance-related issues may emerge. You may have locations and employees in new states, resulting in new state laws that your company needs to navigate. You may uncover regulatory issues with the company you’ve joined, for example, with regard to employee benefits administration. The bigger a company is, the more complex regulatory compliance can become.

Insurance Considerations: Prior to a merger or acquisition, discuss your risks with your broker and determine whether your coverage is sufficient. In addition to D&O insurance, you may need employment practices liability insurance and fiduciary liability insurance, as well as coverage for exposures such as intellectual property claims.

Cyber Risks

There are two key issues to consider when looking at cyber risks after a merger or acquisition: the technology platform and the culture. To minimize cyber risks, you need both a secure technology platform and a culture that prioritizes cybersecurity. Otherwise, data breaches, successful phishing attempts, ransomware, and wire fraud are all very real threats. If the company you’ve joined doesn’t follow best practices, your data – and your reputation – could be in jeopardy.

Insurance Considerations: Cyber insurance has become more and more important as the line between technology and essential operations blurs. A merger or acquisition is a good time to review your cyber policy. Coverage terms vary, so pay attention to any limits, exclusions or restrictions in your coverage. Also consider how the merger process will impact your coverage and whether you’ll have sufficient protection throughout.

Merger and Acquisition Insurance Needs

While there could be countless other insurance implications depending on the details of your deal, these four implications are common to most deals. Regular insurance reviews can help your coverage keep up with your exposures. If your company is growing, and especially if you’re headed toward a merger or acquisition, it’s a good time to check your coverage. Heffernan Insurance Brokers can help you review your coverage and create an insurance program customized to your needs. Learn more.

As we enter the new year, nonprofit leaders face an environment of rapid change and rising complexity. Tight budgets, emerging funding sources, evolving AI regulations and mounting litigation will influence the risk landscape. Is your organization prepared to navigate with confidence? Let’s dive into the four key nonprofit risk trends to watch in the year ahead. 

Trend #1: Tight Operating Budgets  

Increased demand for nonprofit services combined with funding pressures may result in tightening budgets. 

Inflation and job losses have put pressure on families. According to the Bureau of Labor Statistics, unemployment climbed to 4.6% in November 2025. At the same time, changes in political policy could leave many people without the benefits they depend on. When the government shutdown threatened SNAP benefits in November, ABC News says food banks saw a surge in demand, and demand remained higher even after benefits were restored. Stricter SNAP requirements and expiring ACA subsidies could lead to even higher demand for nonprofit services going forward. 

Unfortunately, economic uncertainty can also prevent people from making donations. According to an AP-NORC poll conducted in early December, only 18% of people say they have already donated and plan to do so again before the end of the year, while 30% say they have not donated and do not plan to do so. 

Tight budgets can put strain on nonprofits, which many have to cut corners, reduce services or make do with a smaller staff, resulting in greater risk. For example, delayed repairs could put a nonprofit at risk for property damage, while a smaller staff could increase the risk of mistakes.  

Trend #2: Bitcoin Donations 

Many nonprofits will be happy to accept donations in any form. However, the rise of cryptocurrency donations can create complications. 

According to The Giving Block, global cryptocurrency donations have reached $2 billion in the five years leading up to 2024, with substantial growth in 2024. 

By accepting bitcoin and other cryptocurrency donations, nonprofits can tap into this trend, and they may receive funds that donors aren’t willing to give in any other way. At the same time, market volatility means these donations could rise or fall in value quickly, making it difficult to budget and causing accounting challenges. Other risks can involve proper storage of funds and the threat of losing access to cryptocurrency wallets.  

#3: AI and Cyber Risks 

AI has made it easier for scammers to carry out social engineering and cyberattacks. For instance, scammers can use AI to craft convincing phishing messages or to search for vulnerabilities and launch attacks.  

For nonprofits, the risk is twofold. First, nonprofit organizations may be targeted by cybercriminals attempting to divert funds, steal data or infect files with ransomware. In one example from last year, scammers use deepfake video to target a nonprofit in Oregon, posing as an artist’s son who wanted to sell some of his father’s paintings and donate the proceeds, according to KGW8. Thankfully, the nonprofit wasn’t fooled, but as AI becomes more convincing, these types of scams may be harder to spot. 

Second, cybercriminals may pose as nonprofits in order to trick people into donating funds, reducing the amount of money going to legitimate nonprofits and eroding donor trust. KOAA News reports that crisis charity scams spiked in the aftermath of the Los Angeles wildfires, and AI has made it easier for bad actors to create sophisticated scams. 

Trend #4: Evolving Liability Risk 

Carrier Management says technology and social changes are leading to a growing risk of employment discrimination claims. For example, the growing use of AI in hiring can lead to inadvertent discrimination, while remote work policies can trigger discrimination claims. Nonprofits also face litigation risks tied to statute of limitations reform and allegation of funds mismanagement. 

Amid all of these risks, social inflation and nuclear verdicts are increasing the potential losses. In one example, Proskauer says a California jury awarded more than $11 million to a woman who accused her employer, a plasma donation center, of illegally discriminating against her by failing to accommodate her back pain and then terminating her. To cover their risks, nonprofits need sufficient liability insurance, but securing coverage is sometimes challenging due to reduced capacity and surging rates, especially for abuse liability coverage. 

Is Your Nonprofit’s Risk Management Keeping Up? 

As you navigate these nonprofit risk trends, count on Heffernan Insurance Brokers for mission-minded nonprofit insurance. Our nonprofit insurance program provides coverage that’s designed for the needs of nonprofit organizations, so you can stay focused on your mission while managing your risks. Learn more. 

If you’ve been waiting for the perfect time to get serious about financial goal setting, your wait is over. January is Financial Wellness Month, and the fact that it coincides with the New Year makes it the ideal time to embrace a fresh start and focus on working toward your financial goals.

Are You Achieving Financial Wellness?

Financial wellness isn’t just about having a good income. It’s about developing the habits and knowledge to achieve your financial goals in both the short term and the long term.

According to PYMNTS research, 67% of Americans say they live paycheck to paycheck. That’s two out of every three Americans – and it’s not just low-income workers. A rising number of high-income earners, defined as those earning at least $100,000 a year, report living paycheck to paycheck, while 25% of lower-income individuals say they do not live paycheck to paycheck.

Regardless of how much you earn, if you spend more than you bring in, you’ll go broke eventually. As proof, consider the fate of many lottery winners. According to USA Today, data from the Certified Financial Planner Board of Standards reveals that nearly one in three lottery winners eventually declare bankruptcy, a higher rate than what’s seen among the general American population.

What’s Standing in the Way of You and Your Financial Goals?

Although many people share similar financial worries, everyone’s financial situation is different.

• You haven’t set your priorities. Have you ever sat down to add up all money you spend on things like coffee and streaming services over the course of a year? Once you crunch the numbers, you may find that little things add up to a substantial chunk of your discretionary income. Often, these items aren’t truly a person’s financial priority, but because they haven’t actually written out their priorities and created a matching budget, it’s where they end up spending their money.
• Your budget isn’t realistic. If you find yourself spending more than your budget every month, the problem might not be that you lack financial discipline. Instead, the issue may be that your budget is unrealistic. Maybe it was based on costs five years ago, and inflation means you can no longer stick to those amounts, or maybe you forgot to include key categories of spending, like pet food or out-of-pocket medical and dental care.
• You haven’t planned for emergencies. You may be sticking to a regular monthly budget most of the time, but what happens when your dog needs an emergency trip to the vet, your car breaks down, or your washing machine needs to be replaced? Over the period of a year, it’s reasonable to expect some emergencies to arise, and if you’re not prepared financially through savings, insurance and warranties, normal emergencies can derail your financial plan.
• You lack the expertise needed to make the right financial moves. A lack of financial knowledge can stand between you and your financial goals. Without a thorough understanding of financial concepts, and without an expert to guide you through your decisions, you could end up leaving money on the table.

Are You Financially Literate?

Financial literacy refers to having the financial knowledge and skills to manage money effectively while saving, budgeting, investing and paying off debt.

According to the World Economic Forum, many U.S. adults lack financial literacy. When asked a five-question quiz designed to test basic financial knowledge, only 26% could get four or five questions right, while 24% only got one or no questions right.

Another quiz, called The Big Three, uses three simple questions to test financial literacy. You can take the quiz at the Stanford University Initiative for Financial Decision-Making website. If you miss a question, don’t feel bad – only 28% of American adults are able to answer all three questions correctly. Most Americans have a lot to learn when it comes to finances.

Starting the New Year Right

The new year is a perfect time to shed bad habits, work toward new goals, and brush up on your financial education. Whether you’re just starting out in your career, buying a home and raising a family, or getting ready to retire, financial knowledge can empower you to reach your financial goals.

Embarking on a financial education is easier when you have a knowledgeable advisor in your corner. The Heffernan Financial team, a division of Heffernan Insurance Brokers, offers financial education and empowerment for people in all stages of life. Learn more.

When faced with the choice between investing in insurance now or gambling on the potential for a loss down the road, some business owners choose to roll the dice. Unfortunately, this strategy can backfire in a big way.

How Businesses Become Underinsured

Insurance is a fundamental part of risk management. If a business experiences an unexpected loss, such as the destruction of property or a lawsuit, insurance coverage can help the business recover – but only if you have sufficient coverage in place. By the time you’re dealing with a loss, it’s too late to secure more coverage.

Businesses may find themselves underinsured for a few reasons:

• They don’t have necessary policies. Many small businesses have property, commercial auto and general liability coverage, but what about employment practices liability and cyber insurance? If you’re hit with an employee lawsuit or a ransomware attack, your property, auto and general liability won’t help.
• Their policy terms don’t match their risks. Generic commercial insurance is designed to meet the needs of most businesses, but it may fail to sufficiently protect against the risks inherent to your industry. For example, wire fraud has been a problem in the real estate sector. A real estate agency might secure cyber insurance thinking it will protect against this risk, but some cyber policies don’t offer much, or any, coverage for wire fraud. If you don’t know what’s in your policy, you may not have the coverage you expect. If possible, try to obtain coverage that’s tailored for your industry.
• Their limits may not be keeping up with their needs. As property values, construction costs and jury awards rise, insurance policy limits need to keep up. As your business grows, hires more employees, invests in more equipment, and engages in bigger contracts, you will also need to increase your policy limits.

Penny Wise But Pound Foolish

Being underinsured can cost you. It’s like the old phrase “penny wise but pound foolish.” The small amount of money you save now is nothing compared to the losses you could incur.

Claims are often more costly than businesses expect. For example, a fire doesn’t just cause property damage. It also causes business disruption and lost revenue, and the longer it takes for a business to recover, the harder it will be to win customers back. Property insurance can cover building restoration and the cost of lost inventory and equipment. It can also cover lost revenue from business interruption, facilitating a faster financial recovery.

Cyberattacks are another prime example of common losses that come with hidden costs. A ransomware attack against your company could hold your files hostage unless you pay a ransom. If you depend on your computer systems for daily operations, your entire business could be forced to shut down. You may also be looking at added costs from data breach notification requirements and lawsuits over data privacy violations. If you have cyber insurance, you not only have coverage to help with these exposures, but you also receive expert guidance to help you navigate an unsettling and high stakes situation.

What About Federal Assistance?

A government report on Federal Disaster Assistance for Businesses states that businesses often seek government assistance following a disaster to help with things like payroll, cashflow and other needs and expenses. However, businesses are typically expected to use their own resources or insurance to recover, and federal assistance is only supplemental in nature.

When businesses do not have the resources or insurance needed, they may not survive. According to the report, the Federal Alliance for Safe Homes says that 40% of businesses do not reopen after a disaster, and another 25% close a year after the disaster, while the Small Business Association says that 90% of businesses fail within two years of a disaster.

Could You Survive a Disaster?

If you had to close your business to deal with a fire, storm or cyberattack, would you be able to open your doors again? The answer often comes down whether or not you have the right insurance.

• Are your limits high enough to cover the cost to rebuild? Low limits or high deductibles could leave you with major out-of-pocket costs.
• Do you have business interruption coverage to make up for lost revenue? Without this coverage, businesses may find themselves in a hole they can never dig out of.
• Do you have coverage gaps? Gaps can come from not having policies or endorsements you need, or from have policies with exclusions, restrictions and sub-limits that leave you exposed.
• Will you have the support you need during the recovery process? Insurance can do more than just pay for repairs and replacements. For example, a cyber insurer may provide support during a cyberattack to help you mitigate the damage.

Having the insurance you need when you need it may determine whether or not your business survives. Heffernan Insurance Brokers can help you assess you coverage needs and secure policies that fit your business. Learn more.

Insurance shouldn’t feel like a full-time job, but for many business owners, it requires an extensive amount of time. If you’re juggling multiple policies, insurance providers, and renewal dates, it can be challenging to get through all the fine print.

A well-coordinated strategy can make all the difference. With one partner managing all your policies – from business and cyber to disability, life, and health insurance – you can finally be sure that your policies fit together without costly overlaps or scary coverage gaps.

How a Hodgepodge of Coverage Can Go Wrong

Most people aren’t insurance experts. When they try to buy their insurance piecemeal, they may end up with coverage gaps because they don’t understand the exclusions and limits in the fine print of each policy. Often, they don’t realize they have coverage gaps until they’re faced with a loss that isn’t covered, and by then, it’s too late to seek coverage.

Consider:

• Larry has auto and home insurance, so he assumes he’s covered for any losses. Then someone breaks into his car and steals some electronic equipment he had in the back. He reports the loss to his car insurance company, but it’s rejected because car insurance doesn’t cover personal belongings. Then he reports the loss to his homeowners policy, and it’s covered, but his sub-limits aren’t sufficient to cover the full value.
• Carla has a small photography business that she operates out of her home, with a studio where she takes portraits. She has homeowners insurance with liability coverage, and she buys event insurance when she’s booked for weddings, so she thinks she’s covered. Then a client slips and falls at her house, and she finds out her homeowners insurance won’t cover the incident because her policy excludes business activities.
• Henry owns a bakery. He does most of the baking himself, but he has a couple of employees to help him. He knows his bakery would fall apart without him, so he purchases business overhead expense insurance. When he has a heart attack and has to step back from work for a while, his policy covers his business overhead costs, including his employees’ salaries – but it doesn’t cover his own salary. Now he’s facing personal debt, and he realizes he needed a disability insurance policy on top of the business overhead expense policy.

Making Insurance Simple and Affordable

Beyond coverage gaps, disjointed insurance programs can also result in unnecessary expenses and hassles.

Many insurance policies can be bundled. Individuals often bundle home and auto, and they may also be able to bundle other policies, such as personal umbrella or boat insurance. Businesses often bundle essential coverage types with a business owners policy, and they may be able to add coverage with endorsements rather than paying for additional stand-alone policies.

Bundling can be advantageous because it often results in a discount. Bundled policies can also help policyholders avoid coverage overlaps that cause them to pay twice for the same coverage. In the event of a loss, bundled policies can also make things easier because you don’t have to try to figure out which policy is responsible for the claim.

However, a bundled policy isn’t always the best strategy. Sometimes, a particular risk drives up the cost of the policy, and combining it with other risks can make everything more expensive. Carving out the risk in a separate policy may be the most affordable strategy.

There’s a lot to consider, and the stakes are high.

Putting the Puzzle Pieces Together

Think of your insurance as a puzzle. There are a lot of different pieces, and you want all of them to fit together perfectly to form a complete picture. You don’t want missing pieces that leave you with coverage gaps, mishappen pieces that don’t fit with the rest of the pieces, or extra pieces that have no place in the puzzle.

A holistic insurance partner can help you put your insurance pieces together to form a comprehensive picture. Does your insurance advisor …

• Handle all lines of coverage? Most people need multiple policies that may span multiple lines. A broker who offers personal, commercial, health, and life products can help you with all your needs and provide a cohesive insurance program without gaps or overlaps.
• Take time to understand your risks? You may not know which types of insurance you need. Your broker should be a source of expertise and guidance. Since everyone’s situation is unique, this is only possible if your broker takes time to understand your needs.
• Specialize in your industry? The most competitive business insurance packages are often only available to agencies that specialize in a given niche.
• Advocate for you? It’s helpful to have someone in your corner, especially when you’re dealing with a loss. Your insurance broker should be your partner, and they should have the industry clout needed to help you navigate underwriting challenges.

Heffernan Insurance Brokers offers personal insurance, business insurance, health insurance, and financial services. Our expert advisors will collaborate to bring in the expertise you need and align coverage, ensuring you have a comprehensive insurance program tailored to your specific needs. Contact us.

Real estate investing can be lucrative, but as a general rule, the more money is involved, the greater the risks. Having adequate real estate insurance in place can help you avoid losses and protect your gain, but real estate investors often miss common coverage gaps.

Coverage Gap #1: Renovation Risks

A completed property faces vastly different exposures than a property undergoing construction.

During the initial construction process, builder’s risk insurance provides coverage for damages to the property. Although real estate investors may be aware of the need for this coverage, they do not realize that builder’s risk insurance is also important during major renovations.

What should real estate investors do? If you’re relying on standard property insurance during renovations, you may have coverage gaps that could lead to uncovered losses. Don’t take the risk. Ahead of renovations, talk to your broker about your insurance needs.

Coverage Gap #2: Water Losses

Standard property insurance covers certain types of water losses, such as a roof leak caused by a storm or a sudden burst pipe. However, other types of water losses are excluded from standard coverage. If you’re relying on standard property insurance, you likely don’t have coverage for floods or sewer backup damage, and both of these events can lead to major losses.

What should real estate investors do? Although standard property insurance does not cover floods or sewer backup losses, you can secure coverage for these perils. For flood coverage, you need a stand-alone flood insurance policy. Keep in mind that flooding is possible anywhere, so even if you’re in a lower-risk area, you could benefit from coverage. For sewer backup coverage, you can typically add a sewer backup and sump overflow endorsement to your property insurance policy.

Coverage Gap #3: Income Disruption

When your income stops, you don’t get a break from expenses like property taxes and maintenance costs. Income disruption can stem from many issues, from natural disasters that leave properties uninhabitable to tenants who don’t pay the rent they owe. Real estate investors can plan for some income disruption and set aside reserves to provide breathing room, but securing insurance is also a smart move.

What should real estate investors do? Business interruption insurance can make up for lost income after certain covered events, such as storms or fires. Landlords may also want to look into rent guarantee insurance, which provides coverage for losses caused by tenants who don’t pay rent.

Coverage Gap #4: Nuclear Verdicts

Liability coverage protects you from lawsuits – but what if a jury verdict exceeds your limits? Jumbo-sized jury verdicts, known as nuclear verdicts, have been on the rise, and they can leave businesses exposed to uncovered losses.

What should real estate investors do? The liability limits that seemed sufficient in the past may no longer be adequate in the face of rising litigation costs. It’s a good time to reassess the limits on your various liability insurance policies and consider increasing them. You can also add a commercial umbrella liability insurance policy to provide another layer of protection on top of your underlying insurance policies.

Coverage Gap #5: Cyberattacks

The real estate industry is an attractive target for cybercriminals and scammers, who are drawn to financial data and high-value deals. Real estate investors may become victims of ransomware and other cyberattacks. Social engineering scams, including phishing, business email compromise and wire fraud, are also common. General liability insurance often excludes cyber losses, which can lead to coverage gaps.

What should real estate investors do? Stand-alone cyber insurance can help give real estate investors the protection they need for modern cybersecurity risks. If you don’t already have coverage, seriously consider obtaining it. Because social engineering and wire fraud are major problems in real estate, make sure your policy provides adequate coverage for these exposures.

Coverage Gap #6: Generative AI Exposures

As businesses adopt generative AI, they’re seeing new generative AI exposures. At the same time, insurers are introducing generative AI exclusions. As a result, you may not have coverage for a lawsuit stemming from your use of generative AI.  AI-related lawsuits have already been filed for unfair price coordination among landlords, tenant screening discrimination and for use of false information in AI-generated listings.

What should real estate investors do? If you’re implementing generative AI in your workflows, conduct a risk assessment and insurance review. Also watch out for new AI exclusions in your various insurance policies, and talk to your insurance broker about your coverage options.

Are You Overlooking Any Real Estate Insurance Coverage Gaps?

Heffernan Insurance Brokers provides custom insurance programs for the real estate industry. We can help you review your coverage needs and make sure you have the real estate insurance you need. Learn more.