The loss of a key employee can be a major blow to any business if that person is the primary contact for customers and suppliers, or if he or she fills important management roles of the business. Loss of the key person may also decrease efficiencies in running the business and result in a loss of capital.

Losses caused by the death of a key employee are insurable through coverage called key employee life.  Here are a few things you should know about this coverage:

• Key employee life pays a death benefit to the company if the key employee dies.
• The policies are normally owned by the company; thus the company pays the premiums and is the beneficiary. 
• Key employee life policies will compensate the business against covered losses that result from that person’s death or disability.
• The amount and cost of insurance needed for a particular business depends on the situation as well as the age, health, and role of the key employee.

If you are interested in this coverage for your company, please contact us for a consultation.








What you should know about D&O coverage:

• Coverage for directors and officers is only for non-bodily injury claims.  This includes claims of financial loss resulting from mismanagement.
• D&O coverage typically excludes intentional dishonest acts as well as property damage claims.
• D&O policies may be broadened to include coverage for employment practices liability.
• There are no “standard” D&O policies.  Many versions are available, thus it is essential to review the policy wordings and endorsements with professional advisors, including legal counsel, to ensure the coverage you are acquiring is suitable for your needs.

There are a variety of D&O coverages available, 
including the following:

Corporate reimbursement coverage indemnifies directors and officers of an organization for claims resulting from their acts on behalf of the organization.  The corporate charter or by-laws usually state the obligation for the corporate organization to indemnify its directors and officers.  In some cases it is mandated by state statute.

Side-A coverage provides D&O coverage for personal liability when directors and officers are not indemnified by the firm. This coverage is needed when the corporation is either financially unable to indemnify its directors and officers or when it is prohibited from doing so.

Entity coverage is designed to cover the organization directly in addition to its directors and officers.


Source:  www.irmi.com 

Have you considered how you would manage if a fire or other disaster damaged your business premises?  To quickly resume business after a disaster, business interruption insurance is key.  Here are a few things you should know about this essential coverage:

• Business interruption typically covers loss of income and continued business operation expenses.

• There is generally a 48-hour waiting period after the loss before coverage is effective

• Think about the amount of time you will need to get your business up and running again, and consult with your agent to make sure your limits are sufficient.

 

In the event of a natural or man-made disaster, have a plan in place to execute the recovery of your business.  Here are some tips for developing a plan:

• Client retention plan
Decide on a communications strategy to prevent loss of customers. Post notices outside your premises; contact clients by phone, e-mail, or regular mail; place a notice in local newspapers.

• Back-up resources
Consider the resources you may need during an emergency.  Do you need a back-up source of power? Do you have a back-up communications system?

• Business-to-business coordination
Even if your business escapes the physical damage of a disaster, your operations may suffer significant losses due to the inability of suppliers to deliver goods or services, or from a reduction in customers. Businesses should communicate with their suppliers and markets (especially if they are selling to a business as a supplier) about their disaster preparedness and recovery plans so that everyone is prepared.

• Protect your building
Conduct regular inspections of your business property to identify potential hazards.  Look for signs of defective electrical wiring, leaky gas connections, and structural defects.  By identifying hazards ahead of time and making necessary repairs, you can reduce the threat of injury or death and minimize property damage in the event of a disaster.  

• Continued business activity
Identify critical business activities and the resources needed to support them. If you cannot afford to shut down your operations, even temporarily, determine what you would require to run the business at another location.

For guidance on generating your business recovery plan, check out the Business Recovery Checklist at www.fema.gov.


 

Employee or claimant fraud accounts for about 20 percent of all workers compensation claims paid.* Protect your company from costly claims by recognizing the following signs of insurance fraud:

• There is no witnesses of the accident or it happened outside normal working hours.
  

• It is difficult or impossible to reach the employee.

• The accident wasn’t reported until days after it happened.

• The employee changes his or her story about the accident.

• The employee shows no interest in returning to work even when accommodations to the injury are made. 

• The employee frequently changes physicians.
  

•  The employee has a past history of workers compensation claims.

In times of economic uncertainty, many employers face the possibility of workforce reductions. Though increases in layoffs could lead to an increase in workers compensation costs, there are preventative measures that can be taken. These include preparation prior to the layoff, appropriate assistance for affected employees, and proper management of records. Careful planning and handling of workforce reductions can help alleviate the problems that may arise and assist employees with the transition to new employment.

Preparation Prior to the Layoff

• Be familiar with state unemployment insurance laws, including the levels and durations of benefits.
• Investigate state programs available to employees that may offset workers compensation costs.
• Meet with your insurance broker to review pending claims and identify those that might become problems. 
• Backup employee records and store them in secure locations. Claim records should be updated with the latest available information.
• Create a video record of conditions in the building prior to the layoff to easily demonstrate to a court what the work environment was like. 
• Use exit interviews to document employees’ physical condition at the time of termination.

Appropriate Assistance for Affected Employees

When layoffs occur, the company should handle them as sensitively as possible. Losing a job is a traumatic experience for anyone. Reduce the chances that a worker will seek retribution by helping affected employees:

• Offer resume preparation or outplacement services. 
• Offer employee assistance programs for those who need emotional support.
• If the company can afford the expense, offer severance payments to the employees in return for their written agreement to forego any future claims against the company. 
• Make sure contingency plans are in place should any of the employees become violent at the time of the layoff or later

Proper Record Management

• Ask the broker and the insurance company to coordinate claims handling through one office and one senior claims adjuster.
• Request that the insurer assign the defense of all cases to one law firm.
• Relevant records should be made easily accessible to the attorneys and any medical specialists the firm may hire. Relevant records include videos, employee files, job descriptions, and exit questionnaires.
• Identify key personnel who may be available to testify regarding job requirements and conditions. Have a list of their names and contact information available for the attorneys.

Employment Practices Liability Insurance, known as EPLI, can protect your business against claims made by potential hires, employees currently on your payroll, and terminated employees.

An EPLI policy will protect your company against claims of:

• Wrongful termination
• Employment-related emotional distress and invasion of privacy
• Defamation
• Retaliatory/constructive discharge
• Sexual harassment and discrimination
• Workplace torts such as slander

EPLI coverage generally includes the cost to defend against the charges plus any damages you are ordered to pay. Depending on your business needs, it might make sense to purchase EPLI coverage as part of your company officers’ liability insurance since company officials can be named in lawsuits against the business.




Risky Business
Why You Need Employment Practices Liability Insurance

Workplace discrimination claims can affect businesses of all types.  For example:

• Thirteen current or former computer company employees claimed employment discrimination on the basis of race and national origin. Employees claimed they were treated unequally and subjected to a hostile work environment.  Amount of settlement: $635,000 (salary increases, enhanced promotional activities).

• Eight employees filed a class action suit alleging sex discrimination by their employer in the handling of wages, promotions, pregnancy leaves, and other conditions of employment. Amount of settlement: $600,000 (plus $5 million in legal fees).

• A senior regional attorney sued a securities dealer claiming age discrimination and retaliation. He claimed he was unfairly terminated for advice he gave to a co-worker regarding his employment rights. Amount of verdict: $443,000.

Up to half of all businesses will face a workplace discrimination lawsuit at some point. Is your business prepared?
Protect Your Business
As an employer, you do everything you can to treat your employees fairly. However, you can be held liable for the actions of your employees or even vendors and customers. And with new employment-related regulations being added to the books frequently, it can be difficult to understand exactly what you are expected to do.

It is important to make sure you remain in compliance with laws governing treatment of employees. But there is an added layer of protection you can obtain: Employment Practices Liability Insurance, or EPLI.

Many vacationers will be renting a car this summer, but often don’t start thinking about rental car insurance until they get to the counter. This can result in some costly mistakes. Faced with a number of choices, some renters either purchase all of the coverage, or they decline the insurance without knowing if they are covered by other policies. This can result in either wasting money by purchasing unnecessary coverage or having gaps in coverage.

Before renting a car, you should make two phone calls: one to your insurance agent or company representative, and another to the credit card company you will be using to pay for the rental car. 

Rental car insurance offers four important coverages:

Loss Damage Waiver (LDW), also referred to as collision damage waiver, is not technically an insurance product—it relieves or “waives” renters of financial responsibility if a rental car is damaged or stolen.

Liability Protection provides financial protection from lawsuits in the event you are sued following an accident involving a rental car.

Personal Effects Coverage provides insurance protection for the theft of items in your car.

Personal Accident Insurance will cover you and your passengers for medical and ambulance bills incurred by injuries in an automobile accident.

Source: www.iii.org


Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Although most auto insurance provides property, liability, and medical coverage, many states have different requirements. Here are typical coverages found in an auto policy:

Liability:
Pays for damages you cause to other people and their property. Higher limits than what you currently have may be available.

Medical Payments:
Provides protection for the insured, family members, and passengers in the insured’s auto for injuries sustained in an accident regardless of who was at fault. Also provides reasonable expenses for necessary medical and funeral services incurred. Higher limits than what you currently have may be available.

Personal Injury Protection:
Provides coverage for injury, death, loss of services, and loss of income suffered by you, your covered passengers, or covered family members (for those who reside in states with no-fault insurance laws).

Uninsured Motorist Coverage:
Automobile coverage designed to provide protection for the insured if involved in an accident where an uninsured motorist is at fault. Limits usually match liability coverage.

Underinsured Motorist Coverage:
Auto coverage that pays the difference between the insured’s actual damages for bodily injury and the amount of liability insurance carried by the at-fault driver. Limits usually match liability coverage.

Collision Coverage:
Protects you from loss caused by damage to your auto by collision with another object or vehicle or the overturn of the auto.

Comprehensive:
Pays for the losses to your auto OTHER than collision. Included is damage or loss to your auto caused by fire, theft, glass breakage, falling objects, and vandalism.

Towing and Labor:
This endorsement offers reimbursement for the cost of having a vehicle towed.  Labor costs to repair a vehicle are not covered. Higher limits than what you currently have may be available.

Rental Reimbursement/Loss of Use:
Loss of use covers the daily cost to rent a vehicle while yours is out of commission due to covered loss.

Auto Loan/Lease Coverage:
Coverage may be extended for the difference between the unpaid amount due on the loan or lease of a new auto and the actual cash value at the time of loss.

Audio, Visual, and Data Electronic Equipment:
Tapes, records, discs, and other media can be included on the auto policy.

Four Golden Rules to Buying Auto Insurance

Simplify the insurance selection process and ensure you have adequate coverage with these tips:

      1.  Consider higher limits of coverage than the state-required limits.  If you choose the minimum coverage required by your state, you may not be fully covered in an accident.  For example, if your property damage coverage is $15,000 and you cause $25,000 worth of damage, you’ll have to pay the remaining $10,000 out of your own wallet.

     2.  Tell it like it is. Be completely up-front and honest about your driving history. If you fail to disclose past accidents, speeding tickets, or other moving violations, the insurance company will not be able to give you an accurate quote.  As soon as the insurance company checks your driving record, they will adjust the price to reflect your violations.

     3.  Pay attention to the total package.  Consider price, coverage, convenience, and customer service.  Decide what’s most important to you, and communicate this with your insurance agent so they can help you choose the company that is right for you. 

    4.  Don’t double up on coverage.  Before you settle on a policy, consider any other auto coverage you may have so you don’t duplicate coverage.  For example, if you are a member of AAA, your membership probably covers towing costs if you break-down.  Therefore, there’s no need for a policy that includes roadside assistance coverage.

As your insurance agent, we are here to guide you in selecting your insurance coverage.  Please call us today and we will help ensure you have the right coverage for your needs.  



Once you finish documenting your inventory, either print out the files or burn a CD.  Keep a copy in a safety deposit box or have a friend store it. In case your home is severely damaged, or if you experience a hard-drive crash, it is critical to keep a second copy of your home inventory off-premises.

Finally, remember to update your home inventory annually to add newly acquired items and remove items you no longer own.

1. Wellness Program: With the rising costs of health care, both employers and employees can take responsibility for their own health by participating in a wellness plan.

2. Company Discounts: Although often overlooked, employee discount programs can be a very popular benefit to staff. This gives employees the chance to buy brand-name products or services at a discount.
3. Education Plan: Today’s work force requires lifelong learning to keep pace with the changing demands of employment. You can consider varying levels of support, from paying the full tuition costs of an MBA program to a partial reimbursement or contribution to the cost of a community college course.

4. Commuter or Parking Benefits: Depending on employee commuting needs, you can consider covering the cost of a monthly city transit pass or paying an amount of pre-tax payroll dollars for vehicle parking.



Cafeteria plans create a great opportunity for employers to enhance the benefits package they offer their employees.  In addition, they offer tax saving advantages for both the employer and employee.  Employees' pretax contributions are not subject to federal, state, or social security taxes. Employers save on the employer portion of FICA, FUTA, SUTA, and workers' compensation insurance premiums. Both parties save on taxes and therefore increase their spendable income. (The rules that define “taxable wages” may vary by state.)




Cafeteria plans include Health Savings Account (HSA), Premium Only Plans, and Flexible Spending Arrangements.  Below are brief explanations of cafeteria plan options. 

Health Savings Accounts are available for individuals on certain high deductible health plans.  These accounts are funded by the employee or by the employer.  Similar to the FSA, Health Savings Account funds can be used to pay for certain medical expenses for eligible individuals and their spouses and/or tax dependents. 

The Premium Only Plan is an option that was created in an effort to make benefit programs more affordable for employees.  Under a Premium Only Plan, an employee may choose to pay for qualified benefit premiums with pre-tax dollars.  The qualified premiums (if offered by the employer) include:
   

• Health
• Accident
• Dental
• Vision
• Prescription
• Cancer
• Hospital indemnity
• Medicare supplement
• Disability (although not recommended)
• Employee group term life (up to $50,000)

A Flexible Spending Arrangement (FSA), commonly known as a flexible spending account, allows an employee to set aside a portion of his or her earnings to pay for qualified expenses.  Qualified expenses can include medical and dependent care costs.  Two common types of FSAs include the Medical FSA and the Dependent Care FSA:

• Medical FSA:  used to pay for medical expenses not paid for by insurance.  This typically includes deductibles, copayments, and coinsurance for the employee’s health plan, but it may also include expenses not covered by the health plan, such as dental and vision expenses. 
  
• Dependent Care FSA: can be established to pay dependent care expenses you incur while at work.  This includes child care for children under the age of 13 as well as adult day care for senior citizen dependents, such as parents.  

Beginning in July of 2010, employees with health problems  who have been uninsured for 6 months may be eligible to obtain coverage through a new high risk pool program. A temporary reinsurance program will help employers who provide coverage to their retirees in maintaining this coverage.

Beginning in plan years on or after September 23, 2010, pre-existing condition exclusions are prohibited for children under 19; dependents up to age 26 will be able to obtain coverage through parents’ health plans; routine preventive care will be covered without cost-sharing; and limits on lifetime coverage will be eliminated along with other changes.

In 2014 individuals and small businesses will be able to purchase coverage through state-based exchanges regardless of health status.  Premiums cannot vary because of health status. Individuals will be required to purchase health insurance or pay a penalty. Subsidies will be available on a sliding scale to help individuals or families with incomes up to 400 percent of the federal poverty level to purchase insurance through new state-based exchanges.




While some health care payers may look to consolidate assets and begin planning for market exits, other private and public payers will look to try out new payment systems, reduce administrative costs, and pilot new strategies to improve the health of populations while lowering the cost of care. Enterprising providers will find partners and strategies that create and capture value and will assume more accountability for outcomes than ever before.

Included in this landscape of change will be the reaction of employers in handling insurance for their employees.  One of the largest adjustments with PPACA* will be the nationwide pressure for employer-sponsored coverage.  Both small and large businesses will approach employer-based insurance differently now. 

Here are some basic elements from the health care reform that every business should know:

• It is important to note that the law does not require employers to provide health insurance coverage. 
• The law considers employees working more than 30 hours to be full-time employees in regards to providing insurance. 
• If an employee of a non or insufficient insurance providing employer obtains insurance through a state insurance exchange and receives a premium credit, the employer will be fined.
• New employees of companies with more than 200 employees must be automatically enrolled into the employer sponsored plan within 90 days of hire.
• Fines for employers can be larger for employers that provide “unaffordable” coverage than those who simply provide no coverage.
• The summation of hours that part-time employees work will be calculated into the formula evaluating business size.

*PPACA is the Patient Protection and Affordable Care Act, signed into law on March 23, 2010.

 

 

Ergonomics is the science of designing the job, equipment, and workplace to fit the worker. Proper ergonomic design can prevent repetitive strain injuries, which can develop over time and can lead to long-term disability. Here are some important tips to keep in mind:

• The top of the computer monitor should be at or just below eye level
• Head and neck should be balanced and in-line with torso
• Shoulders should be relaxed
• Elbows should be close to the body and supported
• Lower back should be supported
• Wrists and hands should be in-line with forearms
• There should be adequate room for the keyboard and mouse
• Feet should be flat on the floor

Source:  www.osha.gov

Group presentations and individual consultations can be one of the most effective ways to communicate.  Open conversation engages employees and allows them to ask questions relevant to their needs. 

Customized Employee Benefits Website
Benefits manuals can easily be lost or misplaced.  Offering employee benefit information online allows employees to quickly get answers to their questions.

Benefits-at-a-Glance Summary Sheets
Lengthy manuals can be overwhelming to an employee trying to understand offered benefits.  A “frequently-asked questions” sheet with concise answers can save employees unnecessary frustration.

Employee Newsletters
An employee newsletter with articles reviewing benefits, addressing questions, or announcing changes will remind employees of what is being provided.

*Source:  www.humana.com

We all know the holidays often come with feelings of stress given the high expectations for the season.  Here are some helpful hints to keep your employees productive and healthy throughout the holidays:

Set Work Expectations:  Set clear and reasonable goals with your employees as to what work should be completed prior to holiday time off.  Encourage time management in daily tasks to manage the workload.

Encourage Physical Activity:  Create incentives to maintain your wellness program throughout the season.  Post healthy holiday tips, like drinking plenty of water and exercising regularly.
Communicate Holiday Pay:  If a holiday bonus is not in the budget this year, be sure to let your employees know so that they can budget their holiday expenses.  Communicate paid holidays so employees can schedule time off accordingly.




Create a Harassment-Free Workplace

Harassment and discrimination can cause disruption in the workplace, lower employee morale, and could even result in a costly lawsuit.

The US Supreme Court has held that employers can be found liable for harassment and discrimination claims, even if the employer wasn’t directly aware that harassment and discrimination were occurring in the workplace. 

Harassment can include any verbal, written, or physical act that makes employees uncomfortable at work or interferes with their ability to perform their jobs. It can include jokes, emails, cartoons, drawings or other material that is suggestive or reflects negatively on a protected class. It can include slurs or offensive language.

As an employer, you can be held accountable for all forms of unlawful discrimination and harassment, so it pays to have a proactive policy to protect your business and your employees. Here are some ways you can begin to address the issue:

• Create a harassment and discrimination prevention policy:  Make sure employees know that you will not tolerate harassment or discrimination. Distributing a formal written policy outlining your commitment to a harassment and discrimination-free workplace is a good way to start.  Make sure you and
your managers demonstrate that you believe the policy
is important.

• Outline steps employees should take: Your policy should also include a reporting procedure for employees who feel they are being harassed or discriminated against. It is important to make sure the method is clear, easily accessible, and confidential.


• Conduct a thorough investigation: An immediate investigation is imperative to protecting your employees and business.  Once a complaint has been submitted, an objective and confidential investigation should be completed.  Retaliation should not be tolerated.  If it is determined that unlawful harassment has taken place, disciplinary action commensurate with the severity of the offense should be taken.