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Wrap that big gift for your children with the right insurance

Don’t they grow up fast? Once it was “Daddy, I want that dollhouse” and “Mommy, can I have a new bike?” Now it’s, “Dad, how about a convertible?” “Mom, I really need that watch for work,” and “Thanks so much for the condo, you guys!” One of the benefits of success is the ability to help and support one’s children, whatever their ages. But when parents— especially those of substantial means— buy expensive gifts for their progeny, they must also consider the risk and insurance implications. Otherwise, it’s the parents, and not the child, who may find themselves either liable or sued. For example, say a parent gifts their 16-year-old a new car and soon after the child gets into an auto accident. If there is another person involved, and they engage a personal injury lawyer, one of the first things that an attorney will do is figure out who has the deepest pockets. Any resulting lawsuit may well target the assets of the parents. There are a host of actions to help manage the risks and liability associated with big purchases for children. Here, are some important tips: 1. Make sure everyone who owns the property is on the insurance. Look carefully at the title or deed to any property in the family to determine who is the legal owner. Everyone listed should also be named in the insurance. This issue typically arises when parents co-sign loans to help children buy cars or homes. Parents often assume that their children can and will secure their own insurance, but that leaves parents vulnerable to lawsuits. Any personal injury lawyer worth their salt will go after the connection with the most significant means, rather than their child. 2. Rather than giving your children real estate, consider giving them an LLC that owns real estate. There are many tax and estate planning reasons why you should consider creating an LLC to hold real estate meant for children. Add insurance to that list of benefits, as the corporate structure can shield parents from liability. 3. Don’t skimp on coverage. When children buy their own auto or homeowner coverage, we often find that they choose the cheapest options. This is generally not the best approach when the family has significant assets to protect. In particular, one should consider supplementing liability coverage with an umbrella policy. Don’t make the mistake made by Terry Bollea, aka Hulk Hogan. He bought just $250,000 in liability insurance for his son’s car, and when the young man had an accident—leaving one passenger in a coma—Bollea was on the hook for the cost and ultimately agreed to an undisclosed settlement. 4. Leverage family buying power to reduce premiums. With insurance, as with so many other products, better customers get better deals. Accordingly, it will probably benefit children to shop for insurance using the broker that handles the rest of the family’s coverage. The differences, in fact, can be sizable. 5. Put “insurance” on any freshman year college to-do list. So many things run through parents’ minds as they prepare to send their children off to college. Unfortunately, they often forget to think about insurance coverage. Students living off-campus probably need renters’ insurance. Parents’ homeowners policies typically only cover students living in official dormitories. It may also be wise to keep students on the family auto insurance—even if they are not taking a car to school. That way they’re covered if they drive a friend’s car (and also when they are home on vacation). Auto insurance for teenagers can be expensive, but there are often discounts available for students attending college more than 100 miles from home. This is just a sampling of the issues that may arise, which is why we are always happy to discuss any specific purchases or concerns with you. It’s generally a simple matter to identify the exposures created by gifts of high value or potential risk, and very much worth the time it takes to minimize them. ...

How to avoid online scams this holiday season

It is a perennial debate this time of year: those who favor hitting the best stores at the best times against those who rely on their skill at finding just the right deal online. In the midst of the current pandemic, though, the familiar store vs. site showdown, like so many other family traditions, is going to look different. Beware: While there’s no health risks to worry about, online sites can expose users to other harm, particularly unsuspecting newcomers. "We are seeing the same scams we always do, but criminals have more opportunities now because so many people are shopping online who aren't used to doing that," says Victoria Orrino, First Vice President at Alliant Private Client. So as our holiday gift to you, we offer this quick guide to avoiding some classic holiday scams and their newer variations. Links that deceive A lot of scams start with a link on a website or in an email that takes you to a different site than you intend to visit. n email purporting to be from your bank or credit card company links to a site that mimics their login page, luring you to enter your password. A discount offer from a famous brand leads to a well-disguised purveyor of counterfeits. The Federal Trade Commission just reported a raft of fraudulent text messages claiming to notify the recipient of a package awaiting delivery. The link, however, jumps to a page that asks for passwords, social security numbers, and other private information. The AARP warned of similar links embedded in bogus online greeting cards. Other online scammers are not looking for your personal information. Theirs is a short game; they just want your money—and right away. One of our clients’ children was just duped out of $1,500 in a gift- card buying scam. Look skeptically at any link before you click, then examine the web address of the site it takes you to. Frauds use subtle variations on familiar names—homedep0t.com or bloomingdales.237.ru. In fact, the safest road is not to click on links at all. Better to type the address of a known site directly into your browser using a private WiFi network. (You can keep up with all the latest digital deceits and what to do about them at the Federal Trade Commission and Better Business Bureau's Scam Tracker websites.) Well-known sites can have shady vendors You are likely already wary of fly-by-night merchants on sites like eBay and Craigslist, but did you know you are just as likely to run into questionable sellers on Amazon and Walmart.com? These online giants both run marketplaces where goods they sell themselves appear next to offerings from other vendors, who pay for access to the vast audiences. Many of these secondary merchants are legit, but some inevitably sell inferior or counterfeit goods. Others engage in a legal but questionable practice called drop shipping. They advertise an item from one store, say Costco, at an inflated price. Only after someone buys from their shady listing do they order the item from Costco, directing it to be shipped to the customer. The buyer, who ends up paying too much, is left with little recourse. Recently, drop shipping has been prevalent in social networks such as Instagram and Facebook. When you are buying online this holiday season, notice who the seller is. On Amazon, there is a small notice marked "sold by" a few lines under the "Buy Now" button. If the seller is different from the site you are on, that is a reason to delve a little deeper before you purchase. Fake charities and other appeals Holidays inspire more than shopping. They bring out our charitable instincts and, unfortunately, scam artists who want to exploit that goodwill. One stunt is to create sites for charities with names that are easily mistaken for those of prominent organizations. Often these are promoted by ads that appear at the top of online searches for legitimate entities. Another gambit: fake sob stories posted on sites like GoFundMe that ask for donations for people in need. Federal prosecutors recently charged a California woman with attracting 447 gifts totaling $60,272.43 through a site after falsely claiming she needed help paying for cancer treatments. Always make sure a skeptical eye accompanies your big heart. Double-check the recipient of any donation. It might be best to limit gifts through sites like GoFundMe to only people with whom you have a personal connection. If you fall prey to a scam Victims of scams like these can sometimes be compensated for their loss. Marketplaces such as Amazon offer some limited guarantees that vendors will deliver what they promise. Credit card companies often won't make you pay for purchases that turn out to be fraudulent. Many insurance carriers offer some form of identity theft or credit card fraud protection. In fact, many have recently started offering even more inclusive cyber liability coverage. It is always best to give your broker a quick call to determine what coverage is available and consider adding the proper protection to your program if you haven’t already. The holidays are a time of joy. A little extra vigilance this giving season will help to keep you in the spirit. ...

A guide to protecting your luxury wardrobe collections

A recent Sotheby’s auction was billed as the “Visionary Collection of Joseph Lau,” but it wasn’t the businessman’s art or fine wine – rather, it was 76 luxury handbags. This phenomenal collection included six rare Birkin’s and a bronze Kelly bag that fetched more than $3 million. Other record-breaking sales such as Air Jordans and feted couture exhibits, are just a few examples of the rising passion and interest of luxury wardrobes. Whether you are purchasing such collectibles as an investment, to pass down to future generations, or to wear now, we want to make sure each piece continues to be only a source of pleasure for you. Our guidance below will help keep your cherished collectibles in mint condition and ensure they are properly protected in the event of damage or destruction. Navigating the acquisition process With the luxury market soaring, sadly, fakes are too, especially in the sneaker and luxury handbag categories. The New York Times recently reported on the increasing number of “superfakes”—knockoffs so convincing even the best-trained eye can’t always tell the difference. Being aware of this counterfeit market is important for a variety of reasons, not least because most policies do not protect against fraudulent purchases. Therefore, if you are buying from someone other than an authorized dealer, you’ll want to take the following precautions: Research the seller, including reviews and feedback scores of previous buyers. Beware of discounts; if the item or deal seems too good to be true, it likely is. Educate yourself about the product, so you can confirm relevant details and spot potential issues, such as flaws in stitching and embroidery. Storing your collection safely Humidity, leaks, and harmful cleaning products are just a few of the many perils lurking when your collectibles are displayed or stored away. Therefore, we recommend the following safekeeping best practices: Keep everything in a climate-controlled environment—the industry standard is 70℉, 50% humidity—to prevent damage to leather and fabric goods. Similarly, your closet should not be exposed to direct sunlight or heat sources. Keep unworn sneakers in roomy boxes, to make sure they maintain their shape. Most experts recommend clear plastic since they are stronger than the original box. Empty handbags of everyday items and help keep their shape by stuffing with archival fillers like a purse pillow or acid-free paper. Wrap exposed hardware in a lint-free cloth and remove detachable straps. Store bags and straps in their own breathable, neutral-colored dust bag or the original box. Store hanging garments on non-wire hangers in breathable bags made of muslin or polypropylene. Also, place acid-free paper between folded clothing items, particularly knits and lace shirts.Consider professional storage spaces that cater to owners of couture collections, their sole focus is to properly store and transport clothing, shoes, and accessories. Precautions for wearing collectibles In the event you have that perfect occasion to showcase your couture or cherished accessory, you should consider the following precautions beforehand: Refrain from using oily, alcohol- or perfume-based products on your skin, because contact with them could cause damage to the collectible. Be mindful when eating and drinking, especially staining hazards like red wines. Choose carefully what you place in your handbag and always consider bringing a portable handbag hanger, so you never have to place the bag on the floor. Before storing, dust both the interior and exterior. Preserving the beauty of your collectibles Sneakers that you wear do not need professional cleaning, but they should be kept clean with products that won’t fade their color. However, clothing items or handbags that suffer stains or other marks should be professionally cleaned by a company that has sufficient experience in caring for high-value fashion and accessories. Therefore, look for someone who: Specializes in couture and designer handbags and will outsource to a relevant professional for any work they are unqualified to do on their own. Offers a detailed inspection of each piece and an explanation of what the work will entail. Package items in the appropriate materials, including acid-free paper and breathable garment bags. Protecting your investment Some insurance carriers offer special “wearables” policies, but often we recommend scheduling the items as part of your collectible’s policy. The relevant coverage can vary significantly, though most policies include theft protection, water damage, and other common risks. We suggest you keep a regularly updated list of every item in your collection and be sure to speak with your broker when you acquire a new piece. Also, be sure you check in with your professional to ensure your collection is properly covered. Whether you are drawn to a piece because of its unique features, designer, or storied history – this guide will help keep the original beauty preserved. To ensure your collection will be treasured for years to come, be sure you work with a professional with deep expertise in this luxury market. ...

How to avoid charity scams

The American Cancer Society of Michigan and the United Way of Ohio certainly sound like legitimate charities, and their tax-exempt status with the IRS further supports that impression. Yet, they are two of 76 fake charities concocted by a convicted stock market scammer, who needed only a post office box to collect more than $150,000 from well-meaning yet ill-informed donors. Unfortunately, he is no aberration. The FBI has reported that charity scams flourished during the pandemic, and, in general, thieves are increasingly taking advantage of the humanitarian crisis to funnel contributions of concerned citizens into their own pockets. Many of our clients are significant donors that would be rightly dismayed to learn that their philanthropy might not make it to those it is meant for. With giving season fast approaching, we thought this a good time to offer the following tips to help you protect your charitable efforts from being misused. 1. Familiarize yourself with scam tactics. Though methods have become quite sophisticated and subtle, the underlying principles remain mostly unchanged. Some of those are: Mimicking authentic causes: Fraudsters often steal the names of sanctioned organizations or tweak them only slightly. They even copy official logos and website looks. In many cases, the only significant difference is a URL that is close to but not exactly that of the real charity Applying pressure: Scammers reach out by phone, email, or social media channels, pretending to represent legitimate causes. Be wary of a particularly hard sell or a request for donations by wire or gift card. Capitalizing on a crisis: After disaster—natural or otherwise—strikes, con artists quickly set up fake crowdfunding sites or send phony solicitations via text or email. Always check before donating to one of these requests to see if the contact number veers from an officially listed one for a legitimate organization (usually it is off by a single digit) or if parts of the charity’s name are misspelled (for example, “Hurricane” is missing an “e”). 2. Conduct thorough vetting. Before making a substantial donation, we suggest taking some steps to further confirm the legitimacy of the charitable organization. These might include: Reviewing the organization’s website. Checking in with sanctioning online databases, such as CharityNavigator, GuideStar, or even the Better Business Bureau. The IRS has a list too, but as noted above, fake charities can make their way onto it. Perusing the board member names and bios to get an idea of who supports the group. Looking for acquaintances in your network who might know about either the organization itself or someone involved with it. Meeting with someone inside the organization, through a mutual connection or by reaching out directly. For starters, the professional development department of any legitimate organization should be more than willing to chat with a potential high–dollar donor. 3. Practice safe giving. It’s extremely hard to recover money once it has been given away, so it’s worth doing everything you can to avoid being defrauded. To that end: Seek transparency. Legitimate organizations will provide you with extensive information about their programs and spending. Additionally, they will always grant the time for you to do your due diligence. Never donate under pressure. Don’t rely on reputation alone. Some of the best-known organizations receive poor ratings regarding their use of funds, spending too much on operational costs and marketing efforts. Recognize the potential risk. No one ever wants to be taken advantage of, but not everyone has the time to properly investigate every potential recipient, either. If you are compelled to donate to an unvetted fundraiser, give an amount you wouldn’t be too upset to lose. Listen to your financial advisor. They might be able to connect you with people in the relevant charities or, at the very least, make sure the funds get to the correct recipient. Be extra cautious when giving to international entities. There have been many instances of overseas organizations hiding behind nonprofit designations to issue bribes or commit other corrupt practices. When foreign officials or their family members are listed as board members, it can be a red flag. Insurance solutions for recovering donations to fraudulent organizations are quite limited. Since fraud coverage varies significantly for each individual, it is important to check with your insurance professional to determine what your program includes. While one recourse is to litigate the fraud in court, that can be costly — not to mention time-consuming — making it only worth the effort if the loss is a major one. All of these challenges are why we strongly urge you to practice safe giving so you can sidestep fraudulent charities in the first place. If you have concerns about your fraud coverage or would like additional information about how to avoid charity scams, we are here to help. ...

Celebrating safely: five common holiday-season risks and how to avoid them

The holiday season is a time to come together with family and friends, delight loved ones with beautiful gifts, and make beautiful memories. It’s the most wonderful time of the year, a time of gathering, giving, and joy.  However, as risk managers, we often hear of not-so-festive stories—holiday scams, charitable fraud, dangerous decor, and the like—that can jeopardize these beautiful memories. To ensure everything stays joyful, we asked our experts to identify the most common risks of the holiday season and the precautions you can take to lessen the chance of them happening to you. 1. Beware of charity scams There will always be criminals just waiting to take advantage of your best intentions. They’ll mimic authentic causes online, slightly tweaking names and logos of well-known organizations; pretend to represent legitimate causes on social media or via email; and set up phony fundraising pages in the wake of humanitarian disasters, all as a means to steal your donations. Protect yourself by… becoming more vigilant of the underhanded tactics mentioned above. Before you give, especially if you are planning a significant gift, carefully review the website and board of directors for telling gaps or elisions; check legitimacy and reputation with online databases like CharityNavigator and GuideStar, or ask representatives of the organization itself for information about its programs and fund allocation. 2. Avoid online scams Ne’er-do-wells will also capitalize on your gift-giving generosity, using bogus texts or emails about “delivery issues” and “account problems” to steal your password or gain access to your accounts or identity. Another common scam: shady vendors on established sites like Amazon and Walmart selling inferior and counterfeit goods. Protect yourself by… carefully inspecting all links. Better yet, instead of clicking through, you should directly contact the referenced store, package carrier, or financial institution to see if they sent you the message in the first place. And you should always examine a seller’s pedigree when you purchase on social media or online platforms, to ensure you are not engaging with a subpar drop shipper. 3. Travel with care Though most vacations leave you with only positive memories, we know that expected delights can suddenly turn otherwise. In fact, some can be forever marred by incidents of stolen valuables and travel documents, unexpected illnesses, natural disasters, and threatened or actual kidnappings. Protect yourself by… taking precautions before you take off. Back up important documents. Confirm that your travel and property insurance policies are sufficient to cover your plans and the possessions you will be taking with you. (If circumstances call for it, you may need to secure a kidnapping and ransom policy.) And when you are away, use the hotel vault — not your room safe — to secure valuables, follow local protocols and laws, and don’t post pictures or updates on social media until you are safely back home, so as not to tip off burglars to your empty residence. 4. Minimize risk at festive gatherings Hosting holiday get-togethers is fun, especially when they go off without a hitch. Sometimes, though, the fun is tempered by an injured guest, a damaged piece of art, a drinking and driving incident, or harassment of a high-profile guest. Protect yourself by… setting parameters, literal and otherwise. Seal off areas that need to be off-limits — a perilous staircase or a room that houses a valuable collection, for example. Imagine the potential flow of guests, to ensure that a sculpture isn’t bumped accidentally. Instruct bartenders to stop serving anyone who appears to have had too much to drink, and parking valets to keep car keys out of the hands of the intoxicated. Hire security if there’s even the slightest possibility of attracting paparazzi. And most importantly, confirm that all vendors are properly insured. 5. Protect your home Homes that become uninhabited when you retreat to another residence are more vulnerable to damage, especially as no one will be there to spot small issues before they grow bigger. Similarly, if you’ve festooned your home with candles and, decorative lights, fire, and smoke damage are a possibility. Protect yourself by… hiring a caretaker to check in on your residence to make sure the heat is properly set; water systems are shut off and there are no leaks or other damage that will prevent issues in your absence.  It’s been a stressful year for many of our clients so we are committed to giving everyone the best chance to fully enjoy what should be the most enjoyable part of the season. Whether you are spending time with family, attending galas and parties, traveling to exciting locales, or spending quiet time in your mountain getaway, we want to help you make sure the experience is an invigorating one. If you have any questions or concerns about seasonal risks — or if you want to get a head start on your risk management strategy for 2024, please be in touch. ...

What to do if you are the victim of cyber fraud

Scams existed long before the Internet, but today’s hyper-connectivity has made defrauding innocent victims much more prevalent. In fact, in just one year the FBI reported losses in excess of $10 billion from cybercrimes and that number only accounts for reported fraud. Unfortunately, these swindles can absolutely happen to anyone—and will, as long as the scammers continue to hone their tactics. Fortunately, many carriers have responded to this digital scourge by offering improved insurance options. While first-generation solutions provided only minimal coverage, some carriers now offer reimbursements as high as $1 million or more for losses incurred through extortion, phishing, and other types of fraud. Every policy is unique, and thus, you should speak with your broker to understand your coverage. And of course, if you suspect you are a victim, immediately reach out to your insurance professional for resources and assistance.  Identifying and reacting to the four most common cyber scams The below outlines the first steps you should take after calling your insurance advisor, should you fall prey to the four most common types of cyber fraud. 1. Phishing Scammers gain entry into your accounts after you click on “urgent” email or text requests that appear to come from legitimate organizations (i.e., your bank, FedEx, Amazon). What you should do: Depending upon what was exposed, you may freeze your credit (social security number), change your login information and/or password, and contact your bank. 2. Identity theft Criminals steal your personal information, gain access to your banking information, and open new accounts in your name, securing loans, requesting wires and more. What you should do: Freeze your credit and contact whatever entity was co-opted in the scam, as further investigation into the activity will likely be necessary. Alert applicable financial institutions to ensure no other funds are stolen. 3. Malware and extortion Harmful software is installed on your device after you are lured into visiting spurious websites or engaging with infected downloads or email attachments. With ransomware, one of the most profitable malware iterations is when the criminal encrypts your files, then demands money to free them again. This can also lead to extortion if they uncover compromising information, and demand money to keep it out of the public eye. What you should do: Download and run security software on the affected computer, removing any malware if possible. Consider hiring a crisis management firm to guide a public response should there be a concern about reputational damage related to the fraud. 4. Fake shopping sites You think you are buying a product on Amazon or Instagram but are actually dealing with a dropshipper, a third-party purveyor who sends an inferior product or nothing at all. What you should do: Contact the institution who handled your payment—credit card company, bank, gift card issuer, etc.— to reverse the charges or refund your money. Avoiding cyber fraud going forward Our goal, of course, is to help you make it as hard as possible for anyone to defraud you. To that end, whether or not you’ve already experienced cyber fraud, we recommend the following best practices: Accept two-factor authentication wherever it is offered: After logging on with your name and password, the site sends a unique code to your mobile or email for you to input. Keep your software updated: Immediately install any updates for your computer, mobile, and smart home systems as those updates are often released to fix a discovered vulnerability that could put you and your information at risk. Use a password manager: It’s best not to use a password for more than one login. A password manager will help you create a strong password that is then stored in your encrypted keychain. Establish security protocols for all financial transactions: Create processes with your advisors and institutions that require multiple approvals for any significant transfers or wires. Be wary of links: If you get a notice about any of your accounts or from any of your institutions, carefully confirm the sender before clicking any links as scammers have become quite adept at formatting communications to appear legitimate. When in doubt, don’t click, and contact the institution through their own website or listed phone number. As long as we remain dependent on technology to enrich our lives, there will always be those who seek to take advantage of that dependence. But by familiarizing yourself with their nefarious tactics and taking immediate action should something happen as well as employing all possible precautions, you can effectively navigate the challenges today.   ...