Business Protection Bulletin

Your home-based business gives you flexibility and fulfillment. However, you’re responsible for any damages you cause and any accidents that occur because of your business activities. Without the right liability insurance, you risk losing your business, home and personal assets. Evaluate your liability insurance options as you protect yourself.

Examples of Home-Based Business Liabilities

Every day, you face general and professional liabilities your standard personal home insurance policy will not cover. Consider five scenarios.

• Accidents – A client trips down your stairs after her catering consultation and injures her ankle. Your homeowners insurance policy will not cover treatment for those injuries.
• Data – As an financial planner, you store sensitive information on your home computer that’s compromised by a hacker. Unfortunately, your homeowners insurance policy will not compensate you for any lost data or resulting damages.
• Damage you cause – You accidentally break an expensive antique vase while leaving a client’s home, or someone trips over your computer bag as you work at a local coffee shop. Your homeowners insurance will not cover your financial liability.
• Libel or Slander – A blog post you write contains inaccuracies about a local business leader, and she sues you for libel, or you share confidential information about a client at a networking event and are sued for slander. Any related expenses are your responsibility.
• Economic damage – The business report you write for a local company contains inaccuracies that cause the company economic damage. You are responsible for all associated financial costs.
• Negligence – You forget to include peanuts on your homemade cookie labels, and a customer has an allergic reaction. You could be sued and may have to pay any related expenses.

Home-Based Business Liability Insurance Options

To ensure your have the right liability coverage, first consider details about your home-based business. Its size, type, location and unique liability risk are all factors that determine which type and how much liability insurance coverage you need.

You are now ready to consider your liability insurance options.

• Homeowners Insurance Endorsement

Add an endorsement or rider to your existing homeowners insurance policy to cover your business assets. It typically provides $2,500 to $5,000 in coverage and generally costs less than $100 per year.

• Home Office Business Policy

Gain business liability coverage with a home office business insurance policy. It features protection against lawsuits from injuries, covers loss of records, and includes personal liability coverage.

• Business Owners Policy

A comprehensive Business Owners Policy or BOP covers numerous liabilities, including business data, on-premises and off-premises liability, and personal and advertising injury.

Protect your business, home and personal assets with the right liability insurance. Discuss your specific business with your insurance agent today as you ensure you have adequate coverage.

Most businesses carry some type of commercial insurance that’s designed to cover their equipment. However, what you may not realize is that commercial insurance is not always helpful when it comes to covering all of your bills. If you own a logging business, you’ve likely spent a significant portion of your budget on logging equipment. Without logging equipment insurance, you may find yourself to be at a financial loss should something happen to it.

Everyone’s Risks Are Different 

Often, logging equipment has to be left unattended during a project. It may face elements like unexpected weather or criminal activity, no matter how well secured it is. It may even face danger from your employees if they make a mistake when using it. It’s important to remember that all areas have different levels of risk. Let’s say you complete work in a relatively stable area.

There isn’t a lot of crime, there aren’t a lot of major weather events, and things generally go smoothly from day to do. This may limit your chances of logging equipment destruction, but it won’t eliminate those chances altogether. Let’s say some teenagers get together one night, and decide to cause a little havoc. Their night out may seem like harmless fun to them, but the damages could end up costing you thousands of dollars in repairs. If you have to replace any of the equipment, you’re looking at even higher charges. Insurance is thankfully available to keep your financial holdings intact, so you don’t have to dip into company profits to get everything fixed.

Coverage Is Different 

Your policy is likely long and full of words that you don’t always understand completely. If an animal somehow damages your logging equipment, is this covered under your current insurance policy? If an operator uses the equipment while under the influence of drugs or alcohol, is this covered? Should your logging equipment fail to work one day due to water damage, can you call your insurance for help?

Normally, there are clauses and exceptions to your insurance that you’ll never learn about until it’s too late. Getting additional logging insurance equipment may go a long way in ensuring that you have a blanket policy that can cover whatever may happen to your expensive equipment.

Your Money Is Important 

Most people forget that insurance is an extension of their savings account. It’s designed to limit your liability when it comes to paying out for new equipment. Chances are, your business absolutely cannot live without the equipment that you currently have. Unless you have a never-ending supply of equipment just waiting to be used, you really need to find a way to protect your money.

Logging is a dangerous industry, even when your days seem to go off like clockwork. Even the most experienced of employees may have an off day, and even the most boring of neighborhoods may see more mischief than you think. Getting logging equipment insurance can save you from having to make difficult decisions about your business. It can be your best chance at saving your business from bankruptcy.

If you think that you may not have enough coverage, you may want to talk to your insurance company. They can answer more questions about common scenarios, but they can also bring up more circumstances you may not have considered. Insurance is all about calculating odds. If you’re in business long enough, you’re likely to experience a number of different events. The best thing you can do is to prepare for them as well as you can.

What is General Liability Insurance? 

General liability insurance covers claims that arise when you or one of your employees injures a client or bystander or damages their property. Your employees manufacture and import non-critical auto parts. This means that they’re expected to handle auto parts, assemble them as needed, and ship them off when finished to customers. At any point in that cycle, your employees are susceptible to mistakes. No one is perfect. When mistakes and accidents happen, you’ll need general liability insurance to cover the costs.

Why is General Liability Insurance Necessary? 

General liability insurance is necessary for several reasons. Many employers won’t work with you unless you can show that you have adequate levels of insurance. They frequently check to make sure that you have general liability insurance to ensure that the project isn’t stopped or threatened when one of your employees injures a client or damages property.

General liability insurance will save you money in the long-run. Yes, you’ll have to pay a premium, but that’s much better than having to shell out thousands, if not tens of thousands of dollars in extreme circumstances. You never know when the next accident is going to happen, and you can’t prevent all incidents. Plan ahead and make sure you have general liability insurance.

What Other Types of Insurance Should You Consider? 

Most Non-critical auto parts manufacturers importers general liability program insurance policies cover claims that involve bodily or personal injury and/or property damage. There are many other types of insurance that you should consider before you open your business. Workers’ compensation is mandatory in most states. Workers’ compensation covers claims that arise when an employee is injured at work and while the employee is within the course and scope of his/her employment. Without it, you could be ordered to pay for medical expenses and lost wages for your employees out of pocket.

Any company that manufactures products should have a products liability insurance program in place. This will protect the manufacturer if one of their products is to blame for an injury or loss to property. You should also think about getting property and equipment insurance. Chances are, you have expensive pieces of machinery that you need to keep up and running. Property and equipment insurance will give you the peace of mind that comes with knowing an insurance company has your back if one of your machines stops working.

If you own company vehicles, especially if you transport goods to clients, then you need automobile coverage. Without you, you’ll have to foot the bill when one of your employees is involved in a car accident at work. Many large insurance companies now offer group plans that combine different forms of insurance. Speak with an insurance representative and determine what will be included in your general liability insurance package.

The Federal Emergency Management Agency (FEMA) reports that over 40 percent of businesses affected by a disaster do not reopen. Whether your business faces a natural, technological or human-caused disaster, you can get back to business quickly in several ways.

Anticipate Disasters

Of course, you cannot always predict disasters, but you can anticipate them. Consider this list of common disasters your business could face.

1. Natural disasters

• Floods
• Earthquakes
• Hurricanes
• Tornadoes
• Widespread illnesses or pandemics

2. Technology-related disasters

• Computer failure or malfunction
• Software malfunction
• Data breach
• Cyber attack
  
  

3. Human-caused disasters

• Accidents
• Intentional acts such as theft or fraud
• Acts of violence
• Terroristic acts

Access Your Business Contingency Plan

After creating a list of disasters that could affect your business, you’re ready to create a business contingency plan. It’s part of your emergency preparedness strategy. This backup plan outlines the steps you’ll take if you ever face a disaster, and it will address:

• Business continuity
• Emergency response
• Crisis communications
• Information technology
• Incident management
• Employee assistance

Some of the questions this document answers include:

• Who is the go-to contact?
• How will we accept, fill and track orders?
• What alternatives are available if our vendors are non-operational?
• What’s the best way to secure data?

Examine your business contingency plan today and make sure it addresses all your needs. With it, your business can regroup quickly after a disaster strikes.

Purchase Insurance

You probably carry typical business insurance such as liability, property and employee coverage. Read these policies carefully, and store copies of your insurance documents in a safe place where they are easily accessible any time.

If you see gaps in your coverage or notice that you don’t have coverage for certain disasters, purchase additional policies. An umbrella coverage or flood insurance are two examples of insurance products that protect your business. For more details on how to prepare insurance-wise for an emergency of any kind, talk to your insurance agent.

Seek Assistance

Several organizations are available to help your business rebuild after a disaster strikes.

1.The Small Business Administration – Apply for a low-rate, long-term loan through the SBA’s Office of Disaster Assistance.

2.Your bank – Talk to your banker about a low-cost loan or other financial assistance.

3. Insurance agent – File a claim and discuss your ongoing needs.

4. Community – Ask your community, including neighbors, clients and vendors, to help clean up, rebuild and return to business as usual.

When disaster strikes, your business must be prepared. These steps can help. If you don’t have these steps in place, consider implementing them today before a disaster strikes. One day, you may be very thankful you were prepared!

Your small business insurance may cover data breaches, auto accidents and weather damage. To get reimbursed, though, you need to file a claim. Use these six steps to ensure your insurance claim is processed quickly and properly.

1. Contact your insurance agent immediately.

Before you touch anything, contact your insurance agent. He or she needs to see the the full picture of the damage in order to give you all the benefits to which you are entitled. Rest assured that most insurance companies employ quick-response teams that specialize in assessing damages and filing claims quickly.

2. Document all damages.

In some cases, you may need to move inventory or make repairs right away to prevent further damage. For instance, if the water line breaks and floods your office, go ahead and move furniture and equipment. Just be sure to always take pictures or a video before you move or fix anything. Even small details such as where a chair was sitting when the office flooded could be an important factor in ensuring you receive the full insurance benefit.

3. Assemble witnesses.

Eye-witness accounts of accidents and other events affect your insurance claim. Ask any witnesses to share what they saw. Their testimony verifies the event and can help you prove your case with the insurance company.

4. Save all damaged good.

The moldy insulation that caused a company-wide illness or the faulty ladder that caused an employee to break her leg is evidence. Instead of tossing damaged goods into the trash, save them for the insurance agent to inspect. These items can affect your insurance claim.

5. Know what your policy covers.

While you have a basic understanding of your business property or auto insurance policies, your coverage might not cover damages caused by natural disasters or accidents involving personal vehicles. You certainly can call your insurance agent to verify coverage, but also understand your policy. You’ll save valuable time if you skip the claims process for any damages not covered by your business insurance policies.

6. Appeal an unfair insurance estimate.

Insurance agents are on your side, but they also have to report to the insurance underwriter. That’s why you may get an estimate for damages that’s lower than what you expected. In this case, you can appeal the decision. Ask for a second opinion from an impartial party as you get the amount you deserve.

Take these six steps when you file an insurance claim. They help you and your agent process the claim as quickly as possible so you can return to business as normal. Why not take time right now, though, to review your business insurance policies. Ensure they provide adequate coverage for your needs.

Consider the following chain of events:

An engineer designs the site and grading plan for a construction project. After the project’s completion, the developer finds that the parking lot is not draining.

In March, the developer writes to the engineer, accuses him of failing to follow recommendations in a geotechnical report, and orders him to create a plan to correct the drainage problem.

The engineer responds by saying that his design was sound but the contractor’s work was defective.

The engineer and developer hold several meetings to determine what caused the problem. The engineer sticks with his version of events.

In May, the developer writes again to the engineer, accusing him of committing design errors and shirking responsibility for the problem.

In August, the engineer notifies his liability insurance company that the developer is making a claim against him.

Sometime later, the developer sues the engineer, architect and contractor.

Question: When exactly did the claim occur, and when should the engineer have reported it to the insurance company?

In this case, the company said it did not have to provide defense or coverage because the engineer violated the policy conditions by reporting the claim late. In the company’s opinion, the developer’s March letter was a claim that the engineer should have reported. A court said that the case would have to go to trial, as the report’s lateness was unclear. The policy insured against claims occurring during the policy period and made within 60 days after the end. When, however, does a dispute become a claim, triggering the obligation to report it to the company? The answer turns on the policy’s definition of “claim”:

The court applied this definition to the March letter, asking whether a reasonable person would have considered the circumstances known to the engineer as a possible claim. In the court’s opinion, the answer was no. Until the developer’s May letter, the court said, a reasonable person could have concluded that the developer was unsure as to who was responsible for the drainage problem.

The letter ordered the engineer to develop a plan to correct the problem. The engineer believed he would be paid for creating this plan, an assumption the court found to be reasonable. Because one reasonable view of the letter was of a request and not a demand for services as compensation for damages, the court said that the case must go to trial to resolve the question of facts.

This case illustrates a dilemma for all sorts of organizations. If they fail to report incidents that eventually turns into lawsuits, their insurance companies might try to deny defense and coverage because of late reporting. Conversely, if they report every incident, no matter how minor, their companies could eventually decide to drop their coverage because of frequent losses, even if most of the reports amount to nothing. To deal with this problem, some policies permit circumstance reporting.

The policy that ultimately covers the claim is the one in effect when the insured reports the circumstance to the company, if a claim results from that circumstance.

Check with one of our insurance agents to find out what the reporting requirements are in your professional liability policies. Know what’s in your policy and what it requires you to do so that you don’t jeopardize your coverage.

The ISO Commercial General Liability Coverage Form can seem like a map that starts you out on a main road, takes you smack into a dead end, but offers you a right turn that you can take if you meet certain conditions. It begins with a broad promise and a hint that the promise isn’t quite that broad, then continues with a list of items that narrow that promise.

However, some of those items contain a few words that actually make the promise a bit broader again. Somewhere in that twisting road lies the answer to whether the insurance will cover your business’s legal liability for an accident.

The form actually has three coverages, but the one most business owners are concerned with is Coverage A, Bodily Injury and Property Damage. The first part of Coverage A is the Insuring Agreement, which states that the insurance company will cover the insured person or organization’s legal liability for bodily injury or property damage to others. A key phrase, however, is that the company will pay amounts for occurrences “to which this insurance applies.” How do you know when the insurance applies? That’s where the list comes in.

Right after the Insuring Agreement is a section labeled Exclusions. This section begins with the sentence, “This insurance does not apply to: … ” and goes on to list 17 categories of occurrences. The insurance does not apply to any occurrences that fall within the meanings of those categories. The categories include things like pollution; injuries to the insured’s employees; ownership and use of motor vehicles, aircraft and watercraft; causing or contributing to a person’s intoxication; damage to property the insured owns or possesses; and loss of electronic data.

While these items narrow the insurance coverage considerably, some of them contain clauses that add a little coverage back in. For example, while the insurance does not apply to property damage arising from a contractor’s completed work, the exclusion gives back coverage if the property damage arose from work a subcontractor performed on the contractor’s behalf.

In a claim situation, different burdens of proof apply to either the insurance company or the insured organization, depending on what each one is claiming. The insured has the burden of proving that an accident falls within the Insuring Agreement. To do this, the insured must show that an “occurrence” that took place during the policy term caused bodily injury or property damage to someone else. If the insured cannot prove any one of these elements, the policy will not cover the loss.

The policy defines “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Therefore, the insured must prove that an accident (a piece of lumber falls and strikes another contractor’s employee on the back) occurred during the policy term and caused bodily injury or property damage.

Once the insured meets that burden, the insurance company now has the burden of proving that one of the exclusions applies. For example, it must prove that damage to an HVAC system the insured installed arose out of some defect in the system. If it cannot, then the insurance applies to the loss and the company must pay for the damage. If it can, then the burden shifts back to the insured to show that an exception to the exclusion applies.

If the insured can show that a subcontractor installed the defective components that malfunctioned and damaged the HVAC system, then the exception to the exclusion applies and the insurance company must pay the claim.

Contractors should work with insurance agents who are knowledgeable about the CGL policy and can answer complex coverage questions. This policy can provide millions of dollars in protection for a business, so it is important for the business owner to understand it.

Norma is an assistant manager at a video store. After feeling very sick for a couple of days, she goes to the doctor and is diagnosed with strep throat. Since her employer provides sick time benefits, she calls the store manager and tells him she cannot work that day. He dismisses her illness as “just a sore throat” and orders her to report for work.

She complies, but the strep infection takes most of a week to go away because she could not rest. On the third day, she calls in sick again, despite the manager’s obvious displeasure. Six weeks later, the manager terminates her employment, citing declining sales as the reason. Norma believes otherwise and files a complaint with the U.S. Equal Employment Opportunity Commission.

Since the great recession began in late 2007, complaints like this have become common. The EEOC reported that it received almost 100,000 job bias complaints in 2010, a new record. More than a third of them were from employees who felt their employers retaliated against them; another third were race discrimination claims. Why is this happening? Employment law experts believe the recession has a lot to do with it, as dismissed employees have had trouble finding new jobs. They also believe the EEOC has stepped up enforcement of anti-discrimination laws. However, they also point to internal problems with employers.

Some employers might perform only those activities that they believe will give them an effective legal defense should an employee sue. They write anti-discrimination and anti-retaliation policies into their employee handbooks, make supervisors attend training once a year, and then call it a day. However, these things by themselves might not be effective. Policies do no good if managers do not enforce them.

Training that does not address trends such as discrimination and retaliation complaints will not stop them from happening. In addition, if managers do not monitor whether this training changes supervisors’ behavior, supervisors might conclude that the company is not serious about it.

Employment Practices Liability insurance covers an employer’s legal liability for wrongful acts against employees, including discrimination and retaliation. Insurance underwriters will look at an employer’s policies and training practices, but they will also consider its claim history. Underwriters will be wary of insuring employers with a record of frequent complaints against them. If they offer coverage at all, they will charge higher premiums to account for the perceived higher risk.

To prevent claims and keep insurance premiums low, employers should consider these measures:

Study financial results to determine how much these types of claims have cost or might cost in the future in terms of settlements, legal costs, time more profitably spent on other matters, workplace morale, insurance costs and other areas.

Ensure that you have strong policies in place against discrimination and retaliation.

Require supervisors and managers to attend training to prevent these kinds of claims. Include in the content of the training discussions of what is and is not permissible when it comes to discrimination and retaliation. Make it clear that performance evaluations will include incidents of discriminatory behavior.

Create a workplace culture that does not tolerate illegal activities of any kind. Senior managers should conduct themselves in ways that model the behaviors they want to see from subordinates.

Experts say that recessions always breed increased discrimination complaints against employers. However, that does not have to be the case with every employer. Effective training costs money, but that cost is far less than the cost of insurance deductibles, higher premiums, demoralized workforces, and damaged reputations. Discrimination and retaliation claims hurt a business’s bottom line. Preventing them makes both economic and moral sense.

As the owner of a campground, you have the responsibility to protect your campers, their guests and their property. Insurance for campgrounds gives you the protection you need.

Eligible Campgrounds

Almost any private or publically held campground, RV park or cabin rental business is eligible for insurance for campgrounds. Your facility can also be insured if you offer amusement options such as:

• Swimming
• Boating or canoeing
• Golf – regular or mini
• Playgrounds
• Horseback riding
• Hiking, biking or walking trails
• Inflatables

Types of Insurance for Campgrounds

Select from several common types of insurance for campgrounds. Your insurance agent will provide you with additional information about each type and which coverage your campground needs.

General Liability Insurance

General liability insurance covers the property damage or bodily injury expenses that result from negligence or an oversight that’s your responsibility. Additionally, your general liability policy can include optional coverage for:

• Liquor liability
• Fireworks liability
• Personal and advertising injury
• Non-owned watercraft up to 51′
• Transmissible pathogens coverage

Property Insurance

Property damages to your campground can be expensive to repair. Property insurance pays for a variety of damage and can cover challenges such as:

• Equipment breakdowns
• Vacancy clause
• Damage to pavilions, shelters, tent platforms, boat racks and permanently installed playground equipment
• Emergency vacating expenses
• Business interruption
• Communicable disease
• Food contamination

Commercial Auto Insurance

The vehicles you drive for business around the campground or elsewhere must be covered with a commercial auto insurance policy. Your private insurance will not pay for expenses if you are in an accident or cause property damage in your business vehicle. You can use this coverage for vehicles you own or hire, and it covers trailers you may need to transport, too.

Workers’ Compensation Insurance

If your employees suffer an injury or illness while performing work-related duties, you will want to pay their medical treatment and other expenses. Workers’ Compensation insurance covers these expenses. Requirements vary by state, so discuss your specific campground with your insurance agent as you purchase adequate Workers’ Compensation.

Theft Insurance

When something is stolen from your campground, you will have to pay to replace it. Theft insruance covers this expense.

How to Purchase Insurance for Campgrounds

Your insurance agent will assist you in purchasing insurance for campgrounds. You will want to fill out an application and provide photos of your campground, financial records for the last five years and other information as required by your insurance company.

Insurance for campgrounds is a valuable purchase that protects your business and personal assets. Be sure your policy is updated and includes adequate coverage for your needs. Your insurance agent will help you choose insurance for campgrounds that’s right for your facility.

The risk management firm PMA Companies recently released a report, Six Steps to a Safer Workforce: Building Accountability as an Essential Element for Injury Prevention in the Healthcare Industry. According to the report, a safety program that includes top-management commitment, as well as accountability for safety at every level of the business, will help optimize productivity, keep employees safe and healthy, and reduce costs.

Although PMA wrote the report for healthcare firms, these guidelines apply to any industry and any workplace.

1. 1. Create a safety environment that begins with top management and focuses on actions.

1. 1. Demonstrate your commitment. Implement a zero-tolerance policy for violations, as well as a strong safety program led by mid-level supervisors. Create a system of accountability for safety that includes effective documentation, thorough training and communication, and follow-through on safety rules.

      Make sure that all parties involved hold each other accountable. Accountability goes beyond performing the tasks assigned to given roles, and involves ensuring that everyone performs their roles safely. This approach will make employees and managers more vigilant in seeking opportunities to improve processes that increase safety.

1. 1. Focus on unit leaders. Your program should include buy-in and participation by mid-level managers and supervisors, who are largely responsible maintaining a culture of safety in the workplace. Address not only unsafe employee behavior, but also the consequences failures by managers and supervisors to enforce policies.

1. 1. Give managers authority to take actions to improve safety, whether that involves using safer materials or equipment or changing work practices or schedules.

1. 1. Measure safety. Use reliable loss trend data to set unit-based safety goals.

1. Encourage safety-minded decisions. To integrate effective decision-making into the regular performance of employees, train them to identify the safest solution and hold them accountable for doing so asks.

The report concludes by saying: “The benefits of greater employee safety can be profound. Studies show that employee satisfaction increases and employee turnover decreases when organizations are committed to providing a safe work environment.”