Acquiring affordable I insutance for your business

fNSURANCE is one of Ithe largest expenses for a lumberyard, but there are ways to keep your rates down.

The four most important determinants of insurance rates are known by the acronym COPE: Construction, Occupancy, hotection and Exposure.

Construction: How is the structure built? Rates for a frame building, for instance, are usually higher than rates for a metal building.

Occupancy: What is the facility's use? Lumberyards will receive better rates than dynamite factories.

Protection: What type of disaster and theft protection measures are in place? Are there sprinkler systems, fire extinguishers, fire and burglar alarms? Is the local fire department a volunteer department?

Exposure: What type of operation is located next door? Insurance will be difficult to acquire if your neighbor is a propane gas plant.

All important is how your yard appears to the insurer. "Make the place look attractive to an insurance company," advises Ed Nail, district mgr., Indiana Lumbermens Mutual Insurance. "The first impression is so important, so give your operation curb appeal. A physically clean place will command the best rate."

"Cleanliness is an attitude," he explains. "Insurance companies realize that clean yards typically go out of their way to make sure things are safe and well maintained. The (yards') alarm systems are functional and regularly tested."

Regular housekeeping is necessary because insurers make regular tours of the sites they insure.

Story at a Glance

Ways to save money buying insurance ... factors that influence rates ... most common causes of losses.

Other ways to negotiate lower insurance rates are forms of self insurance, such as carrying higher deductibles. "Some companies, for example, will put a low deductible on office contents, say $100, then a $1000 deductible on goods like inventory, and $5000 on the actual building," says Nail.

"Agreed amount" is another way to lower rates by insuring property for less than its full value, such as having $5 million worth of coverage on a $10 million facility.

When contemplating insurance protection, most people give more thought to what they're protecting than to what they're protecting against. Adequate consideration should also be given to the causes of loss.

In outlining the causes of loss included under a given policy, commercial property coverage falls into three categories:

Basic Form

Fire, lightning, explosion, windstorm or hail.

Smoke causing sudden or accidental loss or damage.

. Aircraft or vehicles, including objeca thrown by vehicles or falling from aircraft.

. Riot or civil commotion, vandalism and malicious damage.

Sprinkler discharge or leakage (including the collapse of a tank considered to be part of that system).

Sinkhole collapse.

. Volcanic action (airborne blast, shock waves, ash, dust or lava flow).

Broad Form

. Breakage of glass that is part of a building or stnrcture.

. Falling objecs.

Collapse (not including settling, cracking, shrinking, bulging or expansion).

Weight of snow, ice or sleet.

Water damage (accidental discharge or leakage of water or steam as the result of breaking or cracking of any part of a system or appliance containing water or steam, except automatic sprinkler systems).

Special Form

Combines the coverage under basic and broad forms as well as all other risks of direct physical loss, but is subject to specific exclusions and limitations.

"It's all risk coverage," Nail says. "If it's not excluded, it's covered." He said nearly every policy sold to lumberyards today is special form.

Itr/HEN you think of cedar, you V Y think siding, decking or fencing, not doors and windows. But a handful of companies are carving niches by producing such distinctive products, even in the heart of the South.

Styline Windows, North Little Rock, Ar., produces custom western red cedar windows and doors. Owner William Hawking thinks cedar is a natural choice for windows and exterior doors because of its beauty and inherent decay and insect resistance. "You don't get any complaints about splitting, warping or rotting," he explained. "Once you ship it out, you never see it again. Other companies get a half a dozen bloody complaints and have to run around town picking things up. What's the use of doing something if the customer's not happy with it?"

When Hawking came to Arkansas in 1987 from Australia, where his family operated one of the largest door and window manufacturers in Canberra. he found the countries' markets very different. "Back in Australia, if you didn't use cedar, you didn't sell windows." he said. "But out here everybody wants something cheaper than pine. In Australia they want quality. Here they want rubbish. All they want is something that will hold up long enough to get the house built."

At first, sales were difficult. Hawking began achieving success after showing samples at shows to architects and builders. The specifiers, used to working with pine, took one look and started running their fingers over the cedar, he said. Thereafter, word of mouth took over.

Styline imports its cedar from British Columbia. where a few other firms hold similar niches. About 30-35Vo of the doors produced by B.C. Door, Vancouver, British Columbia. Canada. are residential entries or interior doors of western red cedar. Priced more than hemlock and about the same as fir, their cedar doors stress quality. "They are all raised panel not flush doors," said Shane Palmer. "There are no pitch pockets, no imperfections.