Business Protection Bulletin

The growth rate of the rental equipment industry in the U.S. is skyrocketing by 24% a year, as more and more companies use the tax and other financial advantages of renting over purchasing. Renting also allows businesses to get the exact machine they need when they need it at a low cost, rather than spending a lot more to buy a device that would spend most of the time gathering dust.

On the downside, if using a piece of equipment that you have rented causes damage or results in legal liability, you could be out thousands of dollars – unless you carry Rental Equipment insurance.

This policy often costs less than similar coverage offered under your Business Owners Policy or standard Commercial Property insurance. Rental Equipment insurance gives you what you need, when you need it: you can match the length of coverage to the term of the rental, rather than that of your Property policy, allowing you to save money. In most cases, it also offers lower (or zero deductibles) than standard policies.

The policy includes both Property coverage that protects the equipment from damage and Liability insurance to protect the renter from legal claims based on the use of the equipment. It also streamlines the process of providing the Certificate of Insurance that rental companies usually require before releasing their machines.

To learn more about how Rental Equipment coverage can help you protect your business – and save money – just get in touch with the insurance professionals at our agency.

The widespread use of smartphones and tablets in the workplace is exposing more and more businesses to liability for sensitive data being compromised if these devices are lost, stolen, or hacked. How can your company protect itself against this threat – and how much authority do you have over an employee’s personal device if it’s also used for work-related activities?

What’s more, because these gizmos are small and portable, it’s easy to misplace them. (The federal Transportation Safety Administration recently leased a warehouse just to store those misplaced or left behind at airports.)

Another emerging risk linked to these devices is a “bring your own” policy that many companies have adopted as a way to save costs by having employees spend their own money on smartphones and tablets that are constantly evolving and updated. This approach raises questions about separating company data from personal information on the device. For example, when an employee leaves, does a business have the authority to wipe the information from his or her smartphone? According to some authorities, if an employee connects a personal device to a company network, the company has inherited responsibility for the data stored on it.

To deal with this risk, you need to provide every employee who uses these devices with training, updated annually, on how to respond in case of loss or theft. To minimize potential liability for lawsuits by customers and clients, make sure that the individual responsible for the mishap informs management immediately. The compromised information might include everything from sensitive data (financial or medical) contacts, photos, call history, personal notes – you name it.

You can also use insurance to protect yourself against losses from data breaches. A policy will provide Liability coverage that deals with legal costs and third-party expertise (such as forensics firms to analyze a breach and call centers to provide information and public relations. Coverage might also include services such as access to tools to estimate costs, a checklist for your planned response to a data breach, and access to experts who can answer questions and review your company’s policies and procedures.

For more information, feel free to give us a call.

Most companies insure virtually every aspect of their business. Yet, believe it or not, fewer than l0% of American businesses protect their primary source of income: their outstanding invoices or accounts receivable (A/R) – even though losses from customers failing to pay invoices are more common than those caused by fire or theft and can be equally, if not more, devastating.

The solution: Trade Credit insurance, (also known as Accounts Receivable insurance) which guarantees payment, up to the amount under the policy, of A/R owed by customers whose receivables are past due, are unable to pay or refuse to do so, or who are in default, This coverage is essential if a significant percentage of your sales are credit based and/or you sell regularly to new customers.

• By protecting you against losses from bad debts, it enables you to provide more credit to more customers – which means higher sales.

• A Trade Credit policy protects your company against the financial impact of a customer going bankrupt because the insurance company must pre-approve all orders, carrying Trade Credit coverage provides you with valuable information on the financial stability of your customers. This enables you to offer more aggressive terms and/or solicit larger orders. Trade Credit insurance allows you to increase the size of your working capital. For example, banks might be willing to lend against 90% of your receivables rather than 80%. In today’s restricted financing environment, banks will be more likely to lend to you and to offer better terms.

What’s not to like?

Our insurance professionals would be happy to offer their advice on the Trade Credit policy that’s best for your business. Please feel free to get in touch with us at any time.

That new signage outside your office is the talk of the town. Congratulations! It’s no wonder that advertising forms a critical element in the success of some companies. For most businesses, however, it’s an incidental activity that’s not part of the firm’s primary business.

All advertising involves a risk exposure. In many cases, your Commercial General Liability policy will include Advertisers Liability protection. However, be aware that this coverage is limited.

For coverage to apply, a third party must have suffered a business injury as a result of certain specific actions that occurred during the course of your company’s advertising activities. Among the most common activities are:

• Oral or written publication of material that slanders or libels another
• Oral or written publication that violates a person’s right of privacy
• Misappropriation of advertising ideas or style of doing business
• Infringement of copyright, title, or slogan

If your company has a potential advertising liability exposure that might fall outside these areas, the chances are that you need specific coverage. In any case, it’s always a good idea to review coverages so that you’re aware of the risks that you might face — whether you decide to insure them or not.

For a review of your business coverages, please feel free to get in touch with us today.

Do you handle ethical dilemmas within your business directly, or do you have a program for nipping such problems in the bud? Regardless of your approach, the National Alliance for Insurance Education and Research recommends asking these 12 questions when you face an ethical dilemma:

• Have you defined the problem accurately?
• How would you define the problem if you stood on the other side of the fence?
• How did this situation occur in the first place?
• To whom and to what should you give your loyalty as a person and as a member of the company?
• What’s your intention in making this decision?
• How does this intention compare with the probable results?
• Whom might your decision or action injure?
• Can you discuss the problem with the affected parties before you make your decision?
• Are you confident that your position will be as valid over a long period as it seems now?
• Could you disclose without qualm your decision or action to your boss, CEO, board of directors, your family, or society as a whole?
• What’s the symbolic potential of your action if it’s understood, or misunderstood?
• Under what conditions would you allow exceptions to your stand?

Ethics are critical to the integrity of any business. They also provide a valuable supplement to your insurance program by reducing your exposure to potential litigation.

A key question in buying an insurance policy is “How much will it pay when I need it?” For most coverages, such as Property, the answer is fairly clear — the amount listed on the front page of the policy (known as the “declarations page”) for the specified property is the most you can collect for a loss to it. For damage to an auto, the policy usually sets a maximum payment equal to the current “book” value of a similar vehicle in similar condition.

Some policies have another limit — called an “aggregate” — on coverages. For example, your Liability insurance will set an aggregate limit: Basically the maximum amount the policy will pay in a given year for all damages under the policy, no matter the size or number of the claims. Depending on the nature of your business, the amount you’ll consider adequate for your aggregate can differ greatly from what’s enough to cover any single claim. Many policies automatically provide an aggregate equal to double your amount per claim (or “per occurrence”). Is this enough to meet your needs?

Let’s sit down and discuss the aggregate limits under your current policies. If they’re satisfactory, great! For those that don’t meet your needs, due to changes in valuations or business procedures, we’ll work with you to make the needed updates now, before you find yourself falling short tomorrow. Give us a call at your convenience.

The fire-protection systems in many of the nation’s assisted living facilities are dismal, says a recent report. Many lack such basic safeguards as smoke alarms and sprinklers. As a result, these facilities have suffered an average of one fatal fire per month during the past five years. In a huge industry, and with deep emotional implications, this matter will continue to receive nationwide press coverage.

This media attention should help businesses in all industries understand the importance of adequate fire protection. The cost of updating these systems pales in comparison to the huge emotional, physical, and economic damages that a single fire can cause.

As a business owner, you need to ask yourself these questions:

• Is your structure capable of withstanding a blaze?
• Is your staff aware of safety measures to both prevent and combat a fire?
• What about your surroundings? Are the businesses near or next to you prepared?
• If the worst were to happen, how long would it take your business to bounce back?

Although it might take intensive effort to protect your building against fire, carrying the proper insurance is one decision you can make immediately. Invest in comprehensive Property and Business Income coverages today!

Contact us for more information on how these policies can help your business bounce back after a fire or other disaster.

If you want to manage risk within your firm, you need to familiarize yourself with risk-management language. Here are some basic definitions, provided by the National Alliance for Insurance Education & Research, which you can use to build your knowledge base:

• Exposure: A situation, practice or condition that might lead to a loss; an activity or resource (assets, people).
• Peril: A “cause” of loss; an event that might cause a loss.
• Hazard: A condition within an exposure that might lead to an incident; “a peril about to happen.”
• Incident: An event that disrupts normal activities and might become a loss or claim; “a near miss.” Lifecycle of an incident: Pre-incident, incident, immediate post-incident, post incident, rehabilitation (repair, recovery).
• Accident: An incident resulting in injury or damage to person or property which has, or will become, a loss or claim; “an unplanned event definite as to time and place that causes bodily injury or property damage.”
• Occurrence: An accident with the limitation of time removed.
• Loss: A reduction in value.
• Claim: A demand or obligation for payment as a result of a loss.
• Frequency: The number of times an incident occurs.
• Severity: The monetary impact of a loss.
• Expected losses: Loss projections (“loss pics”) based on probability distributions and statistics; frequently developed using actuarial techniques.

For a complimentary review of the risks your business faces, please feel free to contact us at any time.

The National Insurance Crime Bureau (NICB) has released its list of U.S. metropolitan areas plagued with the highest stolen-vehicle rates in 2011. California cities took seven of the Top 10 spots, with Washington and South Carolina filling out the list.

What does this mean for you, the business owner? It reinforces the threat of vehicle theft. If one of your vehicles that’s essential for doing business (e.g. an equipment truck or delivery van) is stolen, you’ll be hurting — and sometimes it takes a while to replace that vehicle.

Although it seems that those in sunny California get the short end of the stick, the bottom line is that thieves wreak havoc on business parking lots and jobsites nationwide.

The NICB recommends three levels of security:

• Warning devices, such as alarms
• Immobilizing devices, such as a smart key or kill switch
• Tracking devices that help police locate the vehicle

The NICB also advises owners and users of vehicles to exercise such common sense precautions as not leaving the car unlocked.

Although the NICB’s recommendations provide viable risk-management techniques, a Commercial Auto policy that includes Theft coverage can also help.

If we haven’t discussed your coverage in a while, now’s the time. Please give us a call today.

Insurance can be a risk-taker’s best friend. It lets you use your entrepreneur’s judgment to decide which business risks are worth taking and which aren’t — and when things go wrong, a professionally designed insurance program becomes your safety net. Although you can cover virtually any risk, it’s best to invest your premium dollars in those areas most likely to cause your business the most pain.

For example, if the business provides your family’s sole or main source of income, invest some premium dollars on a Life policy that will provide this income if events take you out of the picture.

If your business depends on computer technology, you’ll want to explore the insurance implications in case of:

• Viruses
• Business income losses due to extended downtime
• Electronic forgeries and theft
• Liability from alleged breaches of customer privacy. Although a standard policy might provide some basic coverage, you’ll probably need supplemental protection.

Although your building might have coverage in the amount required by the mortgagee or even what you paid, what would it really cost to rebuild it from the ground up? Bear in mind that:

• Special design issues might raise these costs.
• Building ordinances (such as those requiring sprinkler systems or wind-resistant materials) would significantly increase the expense of rebuilding.
• “Grandfathering” the building under your community’s current building restrictions might even prevent you from rebuilding at your present location.

Would the amount of Liability coverage required by your landlord or included automatically with your Business insurance “package” be enough to protect you, considering that you can hardly open a newspaper without reading about a multi-million dollar lawsuit against a business? For these and other reasons, there’s no substitute for sitting down with us to review the key risks that your business faces and possible solutions to these exposures.