Protecting Your Valuable Articles

It is beginning to look a lot like…

Diamonds, art, and shiny new golf clubs! We hope you had a safe and happy holiday season.  Post-holiday season is a great time to consider coverage for your shiny new ring, a beautiful new piece of artwork, your new DSLR camera, Callaway golf clubs, or Steinway grand piano.  Whatever your loved one gifted you this season, what would you do if an item was lost, stolen, or broken?  Look to your homeowner’s insurance, right?

Yes! BUT you might not get what you expect.  Most standard home policies have a special limit of $1,500 on valuable personal property and do not include coverage if lost or broken. When a stone falls out of your significant other’s ring, or when your new DSLR camera gets broken you may not have adequate coverage.

No need to fear, Cleary is here!

We suggest insuring these items separately to avoid unexpected replacement expenses and a whole bunch of headaches.  Scheduling your valuable items provides coverage for mysterious disappearance and breakage that you cannot find on a standard home insurance policy. The value of your items will be settled on a pre-determined limit so you will know what to expect which helps to ensure a hassle-free claims experience!  Not to mention you will also save your deductible!  Let us help you purchase peace of mind today and give us a call!

Preventing Frozen Pipes for Business

Cold temperatures can reach areas of your facility that you seldom visit or cannot see, such as:

  • Crawl spaces
  • Closets
  • Enclosed spaces (e.g., attics, lofts, roof spaces)
  • Warehouses
  • Isolated storage areas

Strategies to Help Prevent Frozen Pipes

Some prevention strategies to consider:

  • Properly insulate and/or provide approved heat tracing for water-filled pipes located in exterior walls or unheated spaces.
  • Drain any piping that is not required during the winter months.
  • Maintain a minimum temperature of 40° F (4.4° C) in building areas with processes susceptible to freezing, wet-pipe sprinkler systems, fire pump houses and dry-pipe valve enclosures.
  • Ensure that anti-freeze sprinkler systems have sufficient concentration (appropriate specific gravity readings) of antifreeze to withstand freezing weather.
  • Inspect dry systems to help ensure air settings are correct, air maintenance systems are in good operating condition, and any pipe closets are well insulated. If any heat tape or heating systems are being used, ensure that they are UL-listed for this specific purpose and are in good operating condition. Dry-pipe sprinkler systems low points and auxiliary drains should be opened and drained of any water or condensation.
  • Any branch lines on wet sprinkler systems exposed or subject to extreme cold weather should be insulated and heat traced. Electric heat tracing products should be UL-listed for this specific purpose.
  • Fire pump test headers should be checked to ensure they have been properly drained.
  • Fire pump and dry-pipe sprinkler system equipment rooms should be checked routinely to ensure the heaters are in good operating condition.
  • The use of low temperature supervision can help to ensure rooms are being properly heated.

Tips for Workers’ Compensation Policyholders During COVID-19

Presented by: Acadia Insurance

The COVID-19 pandemic has caused many businesses to adjust or reduce their operations.  Workers may have transitioned to working from home, having reduced hours, have been furloughed – some with or without pay, or have been laid off.

With this upheaval, it is important to maintain accurate payroll records to ensure you are charged appropriate premium for your Workers’ Compensation coverage. Workers’ Compensation policies are audited at the end of each policy term, and premiums will be adjusted based on your employee payroll and type of work performed over the course of the year.

In particular, make sure your records account for the following:

  • Any changes in payroll, including a reduction in staff or reduction in hours
  • If you have furloughed employees with pay during the business disruption, make sure to keep separate payroll records for these employees for the time they continue to be paid and are not working for you. Furloughed payroll will have a reduced or zero rate when used in the calculation of Workers’ Compensation premium, depending on state Workers’ Compensation rules.
  • If you have furloughed workers within the state of Massachusetts, Massachusetts has the additional requirement below:
    An employer who is making payments to paid furloughed workers must provide to their workers’ compensation carrier, within the later of 60 days of approval date of this rule or 25 days after the employer begins making payments to paid furloughed workers, a list of all paid furloughed employees, which shall also include the employee’s normal workers’ compensation classification, weekly wage, furloughed date, and anticipated date of return to work.

Tips for a Change in Operations
Many businesses are not able to run their typical operations because of states’ response to COVID-19 and, instead of closing, they may adapt their operations so they can maintain a flow of income. Other businesses have changed their operations to help respond to the pandemic by providing essential products. For example, many distillers have adjusted their operations to not only distill spirits but also to manufacture hand sanitizer to help with the shortage. If your business has had a material change in operations during COVID-19:

  • Contact your insurance agent to see if this change in operations could impact your how your Workers’ Compensation policy is priced.
  • Note changes in roles of your employees as part of your payroll reporting as they may be assigned to a different class code. Are employees engaging in work that is materially different from their prior role?

Maintain Workers’ Compensation Coverage
If you’ve had to make the difficult decision to lay off all employees during this time, it is important to maintain Workers’ Compensation coverage so you are protected when your business resumes operations. Maintaining accurate payroll records will ensure your premiums reflect your reduced business operations and staff during this period. More importantly, if you cancel your policy, you may find purchasing a new policy difficult or more costly when you resume operations as insurance carriers evaluate new customers on several factors, including whether the business has had continuous prior coverage in place.

Your insurance agent is an important professional resource who can help ensure your insurance keeps up with your business during this disruptive time. For more resources about managing your business during COVID-19, visit Acadia’s dedicated resource page

Workers Compensation and COVID-19 Related Furlough Payments:

The Massachusetts Division of Insurance recently approved a new classification that will exempt COVID 19 related furlough payments to employees from Workers Compensation payroll. This means that furlough payments will not count as payroll when used to determine Workers Compensation premium. There are some very specific qualifiers for this program:

  1. The insurance carrier needs to be notified immediately if you intend to request that furlough payments be exempt from Workers Compensation payroll. We can assist you with this process. This new rule was approved on July 17th and insurance carriers need to be notified within 60 days of that date.
  2. Employers must have records listing furloughed employees, their normal Workers Compensation classification, weekly wage, furlough date and anticipated return.
  3. Furlough payments made between March 1st and December 30th are eligible. The program expires as of December 31st 2020.

Many other states have adopted similar provisions to exempt furlough payments from Workers Compensation payroll. Please contact your representative immediately if you believe that your policy will qualify for this program.

Business Interruption Insurance and COVID-19

The COVID-19 pandemic and the various measures designed to contain its’ spread has had an unprecedented impact on the business community.  Many businesses, such as those in the hospitality sector, have had to cease or drastically curtail operations with uncertain prospects for a restart.  Not-for-profit organizations are seeing fewer donations at a time when many are seeing a higher demand in services due to the human toll of social isolation.  Businesses on the other end of the spectrum that have been able to continue uninterrupted are certain to be impacted in the future due to the economic slowdown.  Suffice it to say that the vast majority of organizations have had some level of negative impact in the past two months that will continue in the near future.


Business Interruption insurance has been a frequent topic in recent weeks as a possible avenue for organizations to recover lost profit and pay for continuing expenses.  There have been a number of high-profile lawsuits against insurance companies for denying these claims.  A recent and local example is the lawsuit by Legal Seafoods against their insurance carrier for a claim denial. Insurance policies vary in the scope and range of coverages so it is impossible to state that all of these types of claims should be covered or denied.  However, we believe that the majority of these claims face difficult prospects for recovery.


Business Interruption (also known as Business Income) is a coverage commonly found on commercial property insurance policies.  In some cases, there is a specified limit while other types of policies designed for smaller businesses are written on an “actual loss sustained” basis for a 12-month period.  The coverage is designed to allow a business to recover continuing expenses (payroll, rent, leases, taxes, etc.) and lost profit when it sustains a covered property loss that results in a shut down or curtailment operations.  An additional component called Extra Expense is often included with Business Interruption.  Extra Expense addresses the additional costs a business sustains over and above normal operating expenses that are required to expedite recovery.  A shut down required by “Civil Authority” is a common feature that can extend coverage when a municipality mandates that a business close due to some form of physical damage in the nearby proximity (i.e. gas main explosion).  In all cases the coverage trigger is a covered property loss such as fire, wind, vandalism, or collapse.


There are several challenges for Business Interruption claimants but two of them stand out.  The business closures or curtailments have been primarily due to government mandates designed to minimize or slow the spread of a virus.  In most cases there was no physical damage or direct contamination requiring the business closure.  Secondly, most policies contain a specific exclusion for a virus.  Exclusions for communicable diseases and viruses were almost universally added starting in 2006 as a result of SARS and have been reinforced by other outbreaks such as H1N1 and Zika.  The primary reason for these types of exclusions is that an event or series of related events impacting millions of individuals and businesses throughout the country at the same time period is “uninsurable”.   It is estimated that the monthly impact for COVID-19 is in the $250 to $350 billion range.  By comparison, the aggregate insured loss from natural disasters was $52 billion in 2018 for the full year.


Legislation has been introduced in a number of states, including Massachusetts, designed to compel the insurance industry to pay for Business Interruption losses due to the COVID-19 related shut downs.  These legislative actions will be contested on constitutional grounds that will likely draw out for years.  Perhaps a solution can be developed that is similar to how Congress and the insurance industry responded to the September 11th attack.  From purely an insurance point of view, the attack on September 11th was an unforeseen tragedy that generated more than $40 billion in losses in addition to the human toll.  Human and economic losses continue with high levels of cancers for first responders that worked on recovery at World Trade Center.  Congress and the insurance industry developed the Terrorism Risk Insurance Act that allowed insurance companies to absorb the initial $200 million in claims associated for a single terrorist event with the Federal government taking on the excess.


We have spoken with many of you over the past few weeks regarding this issue.  We encourage any of you with questions on this issue to reach out to us.  Some of you have decided to file claims and we are certainly willing to discuss and assist others that might be contemplating the same action.  Situations are unique and policy conditions can differ.  We wish all of you a speedy recovery from the recent events and, above all, good health.

Department of Family and Medical Leave – Update

The Department of Revenue recently released important information on how to report PFML Wages for the 4th Quarter 2019 Paid Family and Medical Leave Return. The Department of Family and Medical Leave is providing this update for all employers participating in the Commonwealth’s PFML program to ensure an accurate filing of withholdings by the quarterly deadline of January 31, 2020.



When reporting 2019 PFML contributions, please report fourth quarter wages only in both the PFM Eligible YTD Wages and Wages This Quarter boxes on the MassTaxConnect return. For the calculation to be correct, do not report actual 2019 year-to-date wages in the PFM Eligible YTD Wages box.

The reason for reporting only fourth quarter earnings in the PFM Eligible YTD Wages box is that contributions were not withheld for the first three quarters of 2019, so the Social Security annual wage cap should only be applied against fourth quarter wages.

This will only be necessary for this first PFML reporting as contributions were not withheld on all 2019 wages.  When submitting future returns, you will report the actual YTD wages in the appropriate box.

Important information about the timing of reporting

If your company outsources only W-2 payroll services to a third party, and handles reporting for your independent contractors (whose payments are reported on 1099-MISC) internally, there are some rules to follow when filing returns. It’s very important that the reporting be done in a specific sequence for it to be processed correctly.

First, the payroll service, filing on behalf of your salaried employees (W-2s), must file before you file on behalf of your “covered contract workers” (1099-MISCs covered under the PFML Statute). Next, when you file on behalf of your covered contract workers, you must identify your filing as an amendment to the return already filed by your payroll service (see screenshot below). Please follow this sequence to be certain the information is properly recorded.



The Department of Family and Medical Leave oversees the Commonwealth’s Paid Family and Medical Leave program. Check out their website for a fact sheet, guides and information for both employers and workers.

You will find more information on exemption requests, registration, contributions, and payments for the Paid Family and Medical Leave program from the Department of Revenue.

Investing for the Long Haul

Financial market ups and downs are challenging, to say the least, for many investors. Saving for retirement makes you a long-term investor, but it is important that you shape your investment strategy by revisiting a few fundamental investment concepts every 6 to 18 months, regardless of market conditions.
Revisit Your Risk Tolerance
What level of investment risk is suitable for you? Are you still an aggressive investor, or has your personal situation changed since the last time you evaluated your risk tolerance? Are you still a long-term investor, or are you getting close to retirement and therefore need to be more conservative? If your needs have not changed and you still are investing for the long term, this may not be the time to change your investment mix.
Don’t Chase Returns
How many people do you know that bought into the “hot stock” they read about, without evaluating the risk involved? This is a risky strategy, as such stocks may be overvalued and end up losing money instead of making it.
Every asset class (investment category) has its ups and downs. If your portfolio is well diversified, you will be in good position to benefit when an asset class excels—as opposed to chasing returns after the fact. For example, when growth stock funds were excelling, value funds were not; when stock funds declined, bond funds did well. Over the course of time, a well-diversified portfolio can provide increased performance while decreasing risk. In addition, diversification is a disciplined approach to investing, rather than relying on emotions or impulse.
Keep Investing Through Payroll Deduction
When the market is down, you are buying more shares or units for your dollars. Investors should actually feel good about buying in when the market is low; ideally, when you reach retirement, those shares will be worth more.
Invest for the Long Haul
Remember your long-term goals and invest for the long haul, rather than for short-term market swings. Statistics show that staying the course, rather than switching in and out of funds, is typically the wiser choice. Often, investors make the mistake of selling when the market is declining, and buying back when it is going back up. This is the opposite of what they should be doing to maximize returns.
What About Current Events?
The uncertainty surrounding current events poses significant challenges for investors. One thing we do know: the stock market hates uncertainty. Thus, having diversification of investments is key! A mix of investments—cash, bonds, stocks—will help minimize the risk of a large loss.
Though a large event may cause a serious market reaction in the short-term, often the market balances out after the event has passed. The secret to weathering all types of market swings is to resist the temptation to panic or overreact. Stay disciplined, keep a long-term approach and maintain a diversified portfolio balanced appropriately for your particular risk tolerance. These basics of long-term investing can be your blueprint for not just surviving, but succeeding in the market.

Slip and Falls: Where Do You Stand?

Presented by: Christopher F. Hawthorne, CPCU, CIC

As we settle into winter, it is an appropriate time to revisit the issue of liability from slip and falls (S&F).  As mentioned in prior Cleary Quarterly articles, the Massachusetts laws have changed making it easier to establish liability to those involved. As such, we are seeing an increasing number of slip and fall claims filed against our clients.  When someone is injured, who is responsible?


S&F claims can be quite large and long-lasting claims.  When a person is initially injured, the extent of the damage, medical bills, possible lost wages and other pain and suffering are unknown and therefore a personal injury attorney often will wait as long as possible before filing a lawsuit against the potentially responsible parties.


As an example, Mr. Smith is walking into a local restaurant and slips on ice.  After Mr. Smith falls and injures himself, he or his attorney may identify several potentially responsible parties.  Those responsible might be the restaurant, the property owner or a snow removal contractor if one is used. All three will need to notify their General Liability insurance carrier and potentially, three different carriers will then post a reserve on their insured’s file be it the restaurant, the property owner and the snow removal contractor.


All three carriers then will wait to hear from Mr. Smith’s attorney.  These losses can sit for several years before the actual suit arrives to allow the loss to grow. Meanwhile all three parties are paying premiums based on the assumption that their insurance is responsible and this can raise the rates for all three.


To avoid this scenario, consider the following risk management steps:

  1. Risk Transfer between the property owner and the restaurant via the lease. The lease should spell out who is responsible for snow and ice removal and be clear to what degree. (Parking lots, walkways, steps, roof, etc.)
  2. Risk Transfer between the responsible party above and the snow removal contractor. This agreement should be just as clear in terms of which party will handle the different areas where snow and ice will accumulate.
  3. In each case an attorney should be used to have the responsible party indemnify, hold harmless and defend the other party.
  4. Verification of Insurance and the limits for the ultimate responsible party with particular attention to affirming that there is no exclusion in General Liability policy of the responsible party for the removal of ice and snow.


In this example, if the property owner via the lease takes responsibility and also hires the snow removal contractor, then the lease should protect the restaurant and the contract between the snow removal contractor and the property owner should protect the property owner.


The end result after a slip and fall is the easy identification of which party will handle the claim and allow the other two parties to protect their loss history and future premiums. This subject deserves close attention by all three parties to make sure they know where they stand after someone falls.

Auto Post Accident To Do Suggestions

Presented by Christopher F. Hawthorne, CPCU, CIC

It is frustrating to see a client’s auto carrier pay a claim to a third party based on false information.

An example being a client who had a car, with four people in it, pull in front of him and slam on their brakes. He stopped his vehicle but he did touch the other car. There was no visible damage to either car and no one was injured.  He exchanged information but did not call the police. He then filed the report of the accident in case a claim was made against him.

Soon after we received notice that five people were claiming to be injured and that the other car was totaled. The carrier paid $190,000 and stated without evidence and due to the fact it was a rear-end, they had to make the payment.   We see variations on this all too often.

To help avoid this situation, doing the following will put your insurance carrier in a better position to defend you and not pay false or inflated claims.

Once you have made sure you are safe, we suggest you:

  1. Do not admit fault, apologize or offer unsolicited information such as you were rushing or that you are very busy.
  2. Call the police with goal of having an official report filed to support your information. Request officer’s name and badge number.
  3. Obtain name and contact information of driver and the auto’s owner.
  4. Obtain the name of the other autos insurance carrier and policy number if possible.
  5. Get the name of all passengers in the other auto and note where they were sitting in the car.
  6. Obtain the names of any witnesses and their contact information.
  7. Ask police to ask each person if they are injured or if anything was damaged (EX; Musical Instruments).
  8. Get the year, make, model and license plate number of the other auto/s.
  9. Take pictures of your auto, the other auto, as well as, any surrounding aspects that might be useful such as a traffic sign that is shrouded by trees.
  10. If the weather is a factor, try to capture with picture and print out the weather report for that day.
  11. Record name and contact information of anyone in your auto.
  12. Complete an accident report and submit to Cleary Insurance as soon as possible.

If police are not called, do not leave until the other party had driven away.  We have seen situations where both parties agree that the police are not needed, one party departs and the other party then calls the police.

If police are called, do not leave the scene of the accident until the police arrive.  If you can no longer wait, do not leave without calling the police and getting permission. If you leave and the other party stays, you could be charged with leaving the scene of an accident.

If you would like an accident form to keep in your auto, please contact your Cleary representative.

By obtaining and recording the above information, you can put your insurance carrier is a stronger position to defend you and reduce or eliminate claim payments. As always, it takes a team effort!