The National Flood Insurance Program (NFIP) was set to expire in September 2009. The expiration would have resulted in businesses across the country being unable to afford flood insurance protection.

Last week, Financial Services Housing Subcommittee Chairwoman Maxine Waters and Committee Chairman Barney Frank introduced H.R. 3139, to authorize the NFIP through March 31, 2010. In addition, legislation was introduced to reform the NFIP. "This program is very important and very much in need of revision" according to Congressman Frank. "Passing an extension of the act will prevent any gap in the important work it does while giving us the chance to improve it both from the economic and environmental perspectives."

Commercial property policies DO NOT cover flooding and flood related damage. A business owner must purchase flood insurance in addition to a commercial property policy in order to protect the business against the risk of flood. The NFIP is designed to assist home owners and business owners in securing flood insurance as it is often difficult or prohibitively expensive to secure the insurance.

The Independent Insurance Agents and Brokers of America have come out in support of passage of the extension. “The Big ‘I’ strongly believes that homeowners and businesses need both higher coverage limits and business interruption insurance in order to properly insure their property. We hope that as Congress considers a long term reauthorization soon, they will include these reforms in legislation. We look forward to working with the Obama administration and Congress for a more permanent solution."

If you are a business owner relying on the NFIP, consider contacting your representatives to make them aware of the need to extend and reform this critical legislation.

The Senate Health, Education, Labor & Pensions Committee (or, HELP) reported details of its proposed health care reform legislation this week. The details included specifics on the employer mandate included as a part of the plan. The Committee is continuing to debate the proposal in hearings today. The bill is called the Affordable Health Choices Act and weighs in at a hefty 615 pages.

The Committee Chairman and Ranking Member stated in a letter introducing the Bill for discussion by the Committee on July 2, 2009:

"Americans whose employer chooses not to provide adequate coverage will now have an opportunity to get the care they need through private insurance plans or the public option. But those employers should still share in the responsibility for ensuring that everyone is covered. So those employers (excluding small firms with fewer than 25 employees) that do not offer health insurance would be assessed a modest annual fee of $750 per full-time worker, or $375 per part-time workers, to help pay for their employees’ health insurance coverage."

Last week, Wal-Mart, the nation's largest retailer and largest employer, issued a letter supporting an employer mandate as part of health insurance reform. This support did not sit well with the National Retail Federation and its opposition is spelled out in its VP's blog.

Debate continues today. Public support for reform and an employer mandate is growing and Wal-Mart's support the week before the hearings leads me to the conclusion we have discussed before -- there will be an employer mandate in any health insurance reform legislation that emerges this year.

Business insurance can mitigate almost every risk faced by a business. What about pollution? Sure a business can insure against the effects of pollution with the proper policy, but can a business insure its "right" to pollute?

Well according to a report I read today, businesses can insure their "right" to pollute. Now, I should note that my comments here are a bit tongue in cheek. What I am talking about is a very innovative insurance product that allows a workable international market in carbon credits. Carbon credits are a currency of greenhouse gas emission rights created by the Kyoto protocol. Companies that create projects that generate a preset level of less greenhouse gasses are issued credits that can be sold to companies with projects creating more greenhouse gasses. The more polluting companies can use the credits to comply with emission limitations in their own countries.

One potential problem is that the companies and projects encouraged to produce cleaner projects are in developing countries and there is risk that the credits will never be delivered to the more established (but, dirtier) firms. Well, with some creative underwriting, some insurers are insuring the emissions credits in order limit the risk inherent in the transaction.

For example, Zurich Financial Services Surety, Credit and Political Risk group today announced it is providing trade credit insurance for a hydroelectric power plant in Chile. The hydroelectric plant project will generate about 50,000 Credit Emissions Reduction credits (CER's) annually from 2008 to 2012. CQuest Capital will provide funding for the project in return for delivery of the future CERs. Zurich will provide a trade credit insurance policy to insure against the risk of non-payment following non-delivery of the CERs for any reason, such as political upheaval or a natural disaster.

This allows a cleaner project to bring needed electrical power to Chile, while encouraging trade in CERs. CQuest will market the CERs to other firms in need of credits to meet emissions goals. In effect, allowing some other plant the "right" to be a bit more dirty than its target amount.

I noticed an interesting article in the online version of Insurance Journal. It discussed a recent ruling from the South Dakota Supreme Court. And, if you are an employer, then it is a decision to keep in mind.

Case number 24943 of the South Dakota Supreme Court was decided at the end of May. The case is entitled Catherine Rose McGuire, v. Dean J. Curry, and Park Jefferson Speedway, Inc., a South Dakota Corporation, v. Christopher Eric Mollet. The quick facts are that Ms. McQuire was a passenger on Mr. Mollet's motorcycle. Dean Cury was an employee of the Speedway and, after work, while intoxicated and speeding, he struck the motorcycle seriously injuring Ms. McQuire.

Employers should take note of the case because the Court held that the employer could be held liable for the actions of its underage employee. Why? Because the employer allowed its underage employee unsupervised access to alcohol. "After hiring Curry as a runner, the Speedway gave him a key to its alcohol storage facility," according to the facts of the Court's opinion. The Court held that it was not unforeseeable that "a member of the general public could be injured when the employer provided an employee, who was below the drinking age, unsupervised and unrestricted access to alcoholic beverages."

I took note of this because retaining underage "runners" is not unusual. Your intrepid Guide was a "runner" when working through college. Here the employer had a no-drinking policy, the accident took place off of the employer's property, and the Court found that the state statutes concerning underage consumption used the term "permitted" and it was clear that the Speedway did not permit the consumption. But, because the employer provided access and no supervision, a duty to third-parties (the public) arose.

It is a reminder to employers that a zero tolerance policy regarding alcohol and underage consumption needs to be enforced and employees monitored to make it effective.