Business Protection Bulletin

Although you have insured the business property on your premises, this protection does not extend off site – unless you carry Inland Marine insurance.

This type of policy goes back as far as the 17th century when Lloyd’s of London extended coverage on ship cargos beyond ocean voyages to their final destination “inland.” Today, Inland Marine covers the property of a business when it’s in transit – or stored at a location away from the premises – as well as the property of third parties that’s held on the premises. Because this property is essentially “floating,” these policies are also known as Floaters.

Inland Marine coverage would apply in such scenarios as:

• A truck carrying designer handbags for an upscale department store is hijacked at a rest stop.
• A hailstorm damages bulldozers on a machinery dealer’s lot.
• A fire at a dry cleaners scorches customers’ clothing.
• A defective sprinkler system in a “big box” store warehouse soaks dozens of TVs.

You can buy Inland Marine insurance on either a “named peril” basis (which lists the specific risks covered) or as an “all risk” policy (which covers losses from all causes not specifically listed).

This coverage can provide valuable protection for the mobile or moveable property of almost any business, large or small: everything from camera shops and computer manufacturers through building contractors and jewelry stores to museums/art galleries and trucking companies.

As Business Insurance professionals, we can tailor a comprehensive Inland Marine policy to the needs of your company. Feel free to get in touch with us at any time.

You need Employment Practices Liability insurance (EPLI) to protect you from lawsuits filed (justly or unjustly) by anyone who you employ, have employed, or even considered employing.

Before you buy this essential coverage, be sure to ask these questions:

1. Who is insured? This should include the company as an entity, along with officers, directors, and every type of employee (full-time, part-time, temp, leased, loaned and seasonal). The importance of this becomes clear if you’re ever sued for a sexist slur made by temporary receptionist to a job applicant.
2. What claims does the policy cover? You want coverage for every eventuality: monetary damages, all types of legal proceeding from criminal to regulatory, settlements, judgments, lost pay, defense fees and punitive damages.
3. How does the policy define “wrongful employment practices” beyond the obvious (sexual harassment and racial discrimination)? Make sure that you have coverage for violations of federal, state, local and common law on employment discrimination;, deprivation of career opportunities; defamation; retaliation, negligent job evaluation, and failure to have an acceptable written employment policy.
4. What does the policy exclude? EPLI should include wrongful practices that might have taken place before you bought coverage – so you don’t have to worry about a suit by that disgruntled vice president you fired three years ago for pilfering paperclips.

A word to the wise: use EPLI as a last line of defense. Risk management for your business should include diversity and sensitivity training. The U. S. Equal Employment Opportunity Commission offers a wealth of free training resources, guides, compliance information, and links to free training throughout the nation.

As always, we stand ready to offer you our professional advice, free of charge.

You’re facing a deadline to complete work under a major contract – when a voltage spike surges through your electrical lines, burning out computers and telephone equipment. How would you pay for replacing or repairing the damaged equipment, taking the steps needed to get back in production, and replacing lost income?

In today’s high-tech electronic world, more and more companies are buying Equipment Breakdown policies (formerly known as Boiler & Machinery insurance) to protect themselves against losses from a variety of mishaps that are sometimes unpredictable and often unavoidable: everything from mechanical failure or electrical short circuits to “arcing” (faulty wiring or motor burnout. The rapid growth of Internet marketing and “just in time” inventory make businesses more dependent than ever on computers – while critical data often exists only on the Internet or online databases that can’t be accessed when equipment breaks down.

Depending on their size and sophistication, some businesses include this coverage in their Property insurance, while other purchase it as an endorsement to the policy.

A comprehensive Equipment Breakdown policy should include:

• Reimbursement for the cost of repairing or replacing damaged equipment (Some policies also cover green construction, disposal and recycling methods)
• Replacement of income lost from downtime (“Business Interruption” or “Service Interruption” coverage)
• Assistance from your insurance carrier, ranging from maintenance guidelines and checklists and crisis planning templates to identifying sources for repairs, unusual parts, or replacement equipment that can be obtained quickly.

Our Business insurance experts would be happy to help you obtain a cost-effective Equipment policy that’s tailored to your needs. Just give us a call.

The more heavily your business relies on electronic technology, the greater your vulnerability to cybercriminals.

Criminal activity conducted through the Internet impacts businesses of all sizes. One study found that companies with 100 or fewer employees accounted for 72% of data breaches worldwide.

Today’s cybercrimes put your grandmothers’ spam email list to shame. According to a nationwide study by Ponemon Institute, the median annual cost of cybercrime for a large company in 2011 came to $5.9 million.

Cybercrime covers a variety of activities, from malicious codes and hacks in which private client or company information is made public or stolen, to disruption of normal operations. Perpetrators include rogue employees, “hacktivists” seeking to make a political statement, or third parties seeking financial gain.

Businesses, such as coffee shops, that allow customers on their premises to use Wi-Fi face unique risks. In one case, a Hollywood producer sued the owner of a restaurant offering Wi-Fi access after a customer used the network to download a film for bootlegging.

To help protect your business against potential losses from cybercrime, here are some recommendations:

1 – Review your specific exposures. For example, if you allow people outside the company to use your WiFi, this can increase your exposure.
2 – Focus on the human element in data security by offering employees effective training and specific guidelines.
3 – Re-evaluate your guidelines frequently.
4 – Evaluate the potential risks of adopting new technology.

Last, but not least, make sure that you carry adequate Cyber Liability Insurance.

Our agency would be happy to tailor cost-effective coverage to your needs, and help you develop and implement a comprehensive program for managing your exposure to cybercrime.

In today’s increasingly complex and litigious business environment, your corporate officers and board of directors – the brains of the company – need protection against personal financial liability arising from their corporate activities.

These people are highly vulnerable to lawsuits by investors, employees, vendors, competitors, customers, regulators and others, alleging misconduct for a wide variety of activities, such as:

• Providing inaccurate or unlawful advice.
• Fraud and malfeasance.
• Misrepresentation of company assets.
• Failure to comply with workplace laws.
• Poor hiring decisions. (A Towers Perrin survey found that 40% of all reported D&O claims involved flawed employment practices.)
• Directors & Officers Liability (D&O) Insurance will pick up the tab for legal fees, settlements, and other expenses from such litigation. This gives your officers and directors financial peace of mind in carrying out their corporate activities, and provides a valuable incentive for attracting, and keeping quality people who can help grow your business.

There’s a widespread need for this coverage. One in six company executives (17%) surveyed by Inc. Magazine believe that their business will experience a D&O-related loss within the next year.

These policies usually offer two types of coverage known as “sides.” Side A protects directors and officers from personal financial liability if the company is unable to indemnify them. (For example, during a bankruptcy or dissolution.) Side B coverage reimburses the company if it indemnifies directors and officers. (For example, when shareholders file suit against them.) A third coverage – sometimes known as Side C – comes into play when both the company and individual officers and directors face lawsuits.

To learn more about how D&O Insurance can help minimize the financial risks of litigation for your company and your top people, feel free to get in touch with us at any time.

Product Liability Insurance helps protect your company from damages for losses related to manufacturing or selling products or other goods.

These claims can, and do, put businesses out of business – just ask the officers of any asbestos manufacturer.

Companies are vulnerable to three types of products claims

1. Manufacturing or production flaws that create an unsafe defect in the product. For an example, just recall the recent claims against Chinese manufacturers for using dangerous chemicals in their products.
2. Design defects that make the product inherently unsafe. (The series of lawsuits against Toyota vehicles for defective acceleration controls during the past two years comes to mind.)
3. Inadequate warnings or instructions, such as failing to label a product properly or advise consumers about potential risks. A famous example is the McDonald’s “hot coffee case.” Damages can include medical costs, compensatory damages, economic damages, and (in some instances) attorney fees and costs, as well as any punitive damages.

Some sellers and retailers choose not to buy Product Liability Insurance because they don’t actually “manufacture” anything. However, most states follow the “stream of commerce” model of liability, meaning that if your company sells a product, you can be held liable for damages to the end user.

“Business Owners” and Commercial General Liability policies usually include some type of Product Liability Coverage (Sometimes known as Product/Completed Operations Insurance).

Premiums are based upon the type of product and sales volume. If you try to reduce premiums by underreporting sales or insuring only a percentage of your sales, you’ll probably face a hefty “underinsurance” penalty. Make sure to identify your products properly, too. For example; if you supply stepstools, you don’t want them categorized as ladders, which have a higher premium because of their greater risk potential.

For more information, feel free to get in touch with our Business Insurance professionals.

Nearly six million traffic accidents occur in the U.S. every year – more than 16,000 a day (or one every 10 seconds).

If your company owns, operates, or uses motor vehicles – or if you have employees who use their cars for business purposes – you need Commercial Auto Insurance to provide financial protection against losses from mishaps that occur behind the wheel.

This valuable policy provides these coverages:

• Bodily Injury Liability pays the cost of bodily injury to others from accidents for which you are responsible. If you’re sued, it also pays your defense and court costs.
• Property Damage Liability picks up the tab for property damage to others for which you are responsible, as well as defense and court expenses.
• Personal Injury/Medical Payments usually covers medical and funeral expenses for bodily injury from an accident that involves an insured vehicle.
• Collision pays for a covered vehicle that is damaged by a collision with another vehicle or object.
• Comprehensive Coverage pays for a covered auto that is stolen or that is damaged by causes other than collision or reckless driving.
• Uninsured/Underinsured Motorists covers injuries and, in some cases, property damage, when you’re involved in an accident with another person who either doesn’t have Auto Insurance or carry enough coverage.
• Before you purchase or renew your Commercial Auto Insurance ask yourself these questions: 1) how much Liability Coverage you should buy, and 2) how large of a deductible should you choose?

We’d be happy to help you choose the most cost effective policy for your needs. Just give us a call.

In today’s “litigation society,” you face lawsuits that could cripple your bottom line – or even put you out of business – based on anything from a fire on your premises to an allegation of libel by a competitor.

Commercial General Liability (CGL) insurance provides financial protection against damage or injury caused by something that your business did, or perhaps didn’t do.

Your CGL policy covers a variety of exposures:

• Premises and Operations Legal Liability pays for injuries or property damage on your premises, as well as those that occur outside your place of business.
• Products and Completed Operations Legal Liability covers injury or property damage resulting from someone using your products, or real or alleged faults as a result of work your business has completed.
• Fire Legal Liability pays for injuries and damage from fires for which your business is responsible or that started due to your negligence.
• Personal and Advertising Injury protects your business against litigation alleging libel, slander, or invasion of privacy.
• Host Liquor Legal Liability will pay for lawsuits from hosting a party or special event at which you serve alcohol and intoxicated people cause injuries or property damage.
• Medical Payments covers bills when your customers, suppliers, or visitors suffer bodily injury on your premises, or resulting from your operations offsite.

To learn more about this essential coverage, just give us our agency a call.

Not every threat to your business comes from outside. A nationwide survey reported 778 internal-fraud cases in 2012, involving such scams as phony bills (three in four cases), corruption, and expense reimbursements.

In more than half of these cases, the victimized company lost only $200,000 or less. However, fraud causes its real damage through private civil claims, potential government investigations, criminal prosecution, and negative publicity.

To help deal with this threat, experts recommend that businesses create a comprehensive plan to uncover potential fraud and organize a response. Internal fraud is usually detected by an employee tip-off, management review, internal audit, or even a “gut” feeling by an experienced executive. The first step after discovery is to conduct a thorough internal investigation to determine the facts, gather and preserve evidence, assess legal repercussions, and take corrective action – before an outside authority does. Also, being the first to report the incident to authorities can take the sting out of government investigations.

Corrective actions should involve making amends with the “victims,” revising or implementing corporate-compliance programs, and strengthening internal controls. These actions can include offering employees financial incentives to open up about their qualms.

Fidelity and Crime insurance can help protect businesses from the loss of money, securities, and/or inventory resulting from employee dishonesty. Crime coverage can cover the theft of property, losses due to forgery, and electronic wire transfer fraud.

Cyber insurance is essential, especially after a recent court decision which expanded coverage for cyber losses due under a Fidelity bond. Warns one insurance expert, “Not having cyber coverage is like playing hockey without a goalie.”

For more information on fighting internal fraud, feel free to get in touch with us at any time. We’re here to help.

Business Property insurance protects your building and property against loss or damage from theft, accident, and a variety of other causes. The policy will pay for replacing or repairing covered property or providing compensation for irreplaceable items.

If you don’t own your building you’ll still need to cover its contents: fixtures, furniture, office equipment, inventory and the supplies stored at your location or off-site.

The premium will depend on whether you choose to insure the replacement cost or actual cash value (ACV) of the property. Most Business Property coverage is written on a replacement-cost basis, which will reimburse you for replacing lost or stolen goods with new items at current market prices. This feature can help your business recover from the loss or theft quickly. (If you’re leasing equipment, the leaseholder might require you to cover it at replacement value.) You’ll need to revise your coverage when you acquire or dispose of property. Be sure to update replacement values over time; a computer worth $1,000 two years ago might cost half that today – on the other hand, the price of a desk might well increase.

Actual cash value coverage, which generally costs less, provides reimbursement for the depreciated value of covered property. If your business owns its own equipment, which you could replace easily with comparable goods at depreciated market value, the lower premium of an ACV policy might make it a more cost-effective choice.

As always, our agency’s Business Insurance specialists stand ready to offer their advice on choosing the coverage that’s best for you. Just give us a call.