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11. Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract] |
11. Commitments and Contingencies | Litigation From time to time, the Company is involved in various legal proceedings in the ordinary course of business. For example, to the extent a claim is asserted by a third party in a lawsuit against one of the Company’s insureds covered by a particular policy, the Company may have a duty to defend the insured party against the claim. These claims may relate to bodily injury, property damage or other compensable injuries as set forth in the policy. Such proceedings are considered in estimating the liability for loss and LAE expenses. On June 12, 2019, Phillip Woolgar filed a suit naming the Company and certain present or former officers and directors as defendants in a putative class action captioned Woolgar v. Kingstone Companies et al., 19 cv 05500 (S.D.N.Y.), asserting claims under Section 10(b) of the Exchange Act and SEC Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act. Plaintiff seeks to represent a class of persons or entities that purchased Kingstone securities between March 14, 2018, and April 29, 2019, and alleges violations of the federal securities law in connection with the Company’s April 29, 2019 announcement regarding losses related to winter catastrophe events. The lawsuit alleges that the Company failed to disclose that it did not adequately follow industry best practices related to claims handling and thus did not record sufficient claim reserves, and that as a result, Defendants’ positive statements about the Company’s business, operations and prospects misled investors. Plaintiff seeks, among other things, an undetermined amount of money damages. We believe the lawsuit to be without merit. The Company has not established an accrual for this matter as a loss is not considered to be probable and reasonably estimable. It is the opinion of management that facts known at the present time do not indicate that such litigation will have a material adverse impact on the Company’s results of operations, financial position, or cash flows. Office Lease The Company enters into lease agreements for real estate that is primarily used for office space in the ordinary course of business. These leases are accounted for as operating leases, whereby lease expense is recognized on a straight-line basis over the term of the lease. See Note 2 - Accounting Policies for additional information regarding the accounting for leases. The Company is a party to a non-cancellable operating lease, dated March 27, 2015, for its office facility for KICO located in Valley Stream, New York expiring March 31, 2024. In addition to the base rental costs, occupancy lease agreements generally provide for rent escalations resulting from increased assessments from real estate taxes and other charges. This lease is accounted for as an operating lease, whereby lease expense is recognized on a straight-line basis over the term of the lease. Additional information regarding the Company’s office operating lease is as follows:
|  | Three months ended |  |  | Six months ended |
Lease cost |  | June 30, 2019 |  |  | June 30, 2019 |
Operating lease |  | $ | 41,342 |  |  | $ | 82,684 |
Short-term leases |  |  | - |  |  |  | - |
Total lease cost (1) |  | $ | 41,342 |  |  | $ | 82,684 |
Other information on operating lease |  |  |  |  |  |  |  |
Cash payments included in the measurement of lease |  |  |  |  |  |  |
liability reported in operating cash flows |  | $ | 42,827 |  |  | $ | 84,206 |
Discount rate |  |  | 5.50 | % |  |  | 5.50 | %
Remaining lease term in years |  |  | 5 years |  |  |  | 5 years |
(1) | Included in the condensed consolidated statements of operations and comprehensive income (loss) within other underwriting expenses.
The following table presents the contractual maturities of the Company’s lease liabilities as of June 30, 2019:
For the Year |  |  |
Ending |  |  |
December 31, |  | Total |
Remainder of 2019 |  | $ | 85,655 |
2020 |  |  | 175,806 |
2021 |  |  | 181,959 |
2022 |  |  | 188,328 |
2023 |  |  | 194,919 |
Thereafter |  |  | 49,145 |
Total undiscounted lease payments |  |  | 875,812 |
Less: present value adjustment |  |  | 116,947 |
Operating lease liability |  | $ | 758,865 |
Rent expense for the three months ended June 30, 2019 and 2018 amounted to $41,342 for each period. Rent expense for the six months ended June 30, 2019 and 2018 amounted to $82,684 for each period. Rent expense is included in the condensed consolidated statements of operations and comprehensive income (loss) within other underwriting expenses. See Note 13 Subsequent Events for additional office lease. Employment Agreements See Note 13 Subsequent Events for change in executive employment agreement.

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