Monthly Archives: May 2014

Memorial Day – A Short History

Sometimes it seems like Memorial Day is just an excuse to have a barbecue or a big sale on cars or furniture.  Maybe it is just because it is a long time from the events that precipitated Memorial Day or because our consumer driven economy needs every reason it can find to encourage sales.  Still, when you look around you can find many people who observe Memorial Day in the spirit it was intended long ago.  Like the Boy Scouts and Cub Scouts of St. Louis, Missouri, who spent Sunday at Jefferson Barracks National Cemetery, placing flags on the graves of soldiers just as they have every year since 1951 – this year each of the 189,000 graves was decorated with an American flag. 

memorialday.jpg   Here on the Peninsula we have a lot of veterans and a history of celebrating this day that honors all American veterans and particularly those who lost their lives in service to their country.  Events are planned from Port Townsend to Brinnon and all across the Peninsula.  



The holiday itself has an interesting history.  It was begun neither by an Act of Congress nor a presidential pronouncement, but by Major General John A. Logan who, at the time was the head of an organization of Union veterans.  Logan established Decoration Day on May 30 as a time for the nation to decorate the graves of the war dead with flowers. He may have chosen the date because flowers would be in bloom all over the country at that time.    The first national observance of Decoration Day was at Arlington National Cemetery near Washington, D.C. in 1868.  Arlington Cemetery had only been established itself in 1864 on land confiscated from the family of Robert E. Lee.  

By the time Logan declared “Decoration Day,” communities around the country – north and south – had already created local tributes to the war dead.  Over 20 local communities from Georgia to New York laid claim to have been the first to honor the Civil War dead in memorial observances.  While some still claim the honor, Congress and President Lyndon Johnson settled the historic argument declaring Waterloo, N.Y., the “birthplace” of Memorial Day. Waterloo had its first ceremony on May 5, 1866, closing businesses and flying flags at half-staff to honor veterans who had fought in the Civil War. 

Decoration Day ceremonies were being held on May 30 throughout the nation by the end of the 19th century and the holiday specifically addressed the Civil War dead.  By the end of World War I the observance was broadened to include all US wars and the term Memorial Day was becoming more common. When Congress passed the Uniform Monday Holiday Act in 1968, Memorial Day was declared a federal holiday and set as the last Monday in May in order to create a three-day weekend.  The law and Memorial Day went into effect in 1971. 

As we mentioned in the first paragraph, it seems to many that Memorial Day has come to be more about sales and barbecues than honoring America’s fallen and there have been efforts to refocus the day on its original meaning.  President Clinton declared a “National Moment of Remembrance” in 2000 to help remind Americans of the meaning of Memorial Day.  The Moment of Remembrance asks all Americans to voluntarily and informally observe in their own way a Moment of remembrance and respect, pausing from whatever they are doing for a moment of silence at 3 p.m. local time.  There have also been efforts to restore Memorial Day to a single holiday observed on May 30 in the hopes this would restore American’s sense of the day as a special observance of lives lost in war.  

You can find an excellent infographic HERE that summarizes the etiquette and history of this special day.  

The Language of Risk Management

Whether it is in your home or business, managing your economic risk is more than simply purchasing an insurance policy.  Your first step ought to be a risk assessment identifying both your risk exposures and the magnitude of a potential loss.  Armed with an understanding of these two variables, you potentially have three options for how to deal with each risk – risk avoidance, risk retention and risk transfer.  

You can think of risk avoidance as that set of preventive steps you can take to help make sure the chances a particular event will occur are eliminated.  This can be difficult to achieve. For example, if you were the owner of a home health agency, instituting a system of background checks and requiring personal references would help reduce the risk of retaining an employee who might be involved in the abuse or neglect of a client, but it may only reduce, not eliminate the risk.  A manufacturer, however, could look at a product line and conclude that the risks associated with the product were enough to discontinue production – something that actually occurs from time to time in toy manufacturing.  

Risk retention is another approach to dealing with risk.  When an organization determines that the risk of an event is very small and that any resulting harm is also small, the company can retain responsibility for its own risk.  This is done by “self-insuring” for the risk and paying for any losses out of their own funds.  A common example of risk retention in business can be found in shipping where there is an election to ship without insuring items.  The use of deductibles in insurance is another example of risk retention where the election to a high deductible constitutes a willingness to self-insure up to the amount of the deductible. 

When risks cannot be avoided it is time to transfer the risk and this is generally where people look to insurance.  In fact, Investopedia literally defines transfer of risk in terms of insurance as: 

“The underlying tenet behind insurance transactions. The purpose of this action is to take a specific risk, which is detailed in the insurance contract, and pass it from one party who does not wish to have this risk (the insured) to a party who is willing to take on the risk for a fee, or premium (the insurer)..” 

However, insurance is not the only way that risks can be transferred.  Many organizations can transfer their risk by transferring the operations that create the risk.  For example, a company that made local deliveries could be at risk for liability from accidents involving their delivery vans.  This risk can be transferred by retaining a delivery company which assumes the risk of accidents in exchange for payments for the deliveries.  Subcontracting and outsourcing are common ways to transfer risk.   

Managing risk involves a mix of these three concepts – risk avoidance, risk retention and risk transfer.  The more carefully you can think through your options for using these strategies, the more cost-effective your risk management plan will be. 

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BOATOWNERS COVERAGE

The days are getting longer and soon many boaters will be out on the water.  Our watercraft insurance specialist, Jim Maupin, talks to customers year-round, but his conversations about boats will be increasing as the weather improves!  At Homer Smith Insurance, we have been providing personalized service for over 60 years in Port Townsend, Sequim, Port Angeles and throughout Washington.  Our agents are very knowledgeable about not only watercraft insurance, but also home, auto, life and business insurances.

The insurance approach for covering boats and boating property is quite similar to what is used to protect cars and homes. Essentially insurance is offered on a package basis, meaning that there is coverage for physical property as well a protection against the legal and financial consequences of injuring others or damaging property that belongs to others.

Property Coverage – Typically a boatowners policy covers:

  • Boats – Refers to property designed to travel on water and includes sails, its permanent equipment, spars and fittings.
  • Boating Equipment – Includes a wide variety of property that is used in conjunction with boats and it includes accessories. Items considered as equipment are property used for communication (radios), navigation, sonar, radar, outboard motors, dinghies, skis and sports equipment (recreational flotation devices) that are towed by boats and similar property. As a rule of thumb, the more related an item is to the ownership and use of a boat, the greater the justification to classify it as boating equipment.
  • Boat Trailers – Trailers used (and designed) for transporting boats (as defined by the policy).

This property must be owned by the person who is named as the policyholder. There are limited instances when such property that is temporarily in the policyholder’s possession also qualifies for coverage.

Items and situations that aren’t covered include boating property that is used in business activity, losses that involve races or competitions (an exception is made for sailboats) and boats that are used, full-time, as residences.

Liability Coverage – Besides protecting boating property, a boatowners policy also responds to claims or lawsuits caused when another person is injured, and /or when another person’s property is damaged or destroyed.  Another important coverage under the liability section is medical payments. This provides reimbursement for, typically, emergency or immediate medical treatment expense.

As is the case with property coverage, there are liability situations that are not covered by a boatowners policy, including losses such as those that involve business activity, unauthorized operation of boating property, intentional acts, and criminal activity.

Boating property is a substantial investment and boatowners coverage is an efficient, affordable way to guard against accidental losses.  Give Jim Maupin a call at 360-385-3711 – he will be able to answer just about any boat insurance question you may have!