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  1. What Type Of Leader Are You?

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    By Ross Rutman, Assistant Vice President – Habitational

    Whether you’re running a small start-up business or a large multinational corporation, leadership is something which is a key to your success. Yet for something which is so important, it’s interesting to note that there’s no single correct way of approaching it.

    Many psychologists have attempted over the years to define the different types of leaders. However, the majority of these have evolved from an original concept that was created by Karl Lewin in the 1930s. Here’s an overview of the three different types of leadership which are just as relevant today.

    Autocratic Leaders

    An autocratic leader is one who makes decisions on their own, acting swiftly and without consulting anyone else. They like to retain control over all the decision making and rarely, if ever, accept input from elsewhere.

    This style of leadership tends to be very rigid and highly structured, with clear rules that are well-communicated to all concerned.

    Having an autocratic leader can be useful in a small group that would otherwise drift without firm direction. It’s also perfect for situations where a decision needs to be made quickly. However, it can be demoralizing for workers, and the leader may be viewed as bossy, difficult, and controlling. This can lead to a high turnover of staff or absenteeism as workers don’t feel valued or included.

    Democratic Leaders

    Also known as participative leadership, democratic leaders are often viewed as the most effective. While still retaining overall responsibility for decision making, democratic leaders encourage creativity and participation from all members of the group.

    As a result of this inclusive atmosphere, workers are more likely to feel encouraged and to experience high levels of job satisfaction, which in turn creates improved productivity.

    There are nevertheless some negatives to this leadership style, which include an inability to respond quickly. The democratic process isn’t a fast one, and projects may falter if group members feel underqualified to contribute effectively.

    Laissez-Faire Leaders

    Often viewed negatively by others from a more structured environment, laissez-faire leaders use a far more relaxed approach by handing over control to others. A hands-off approach gives team members the freedom to manage their own time and achieve results in the way they personally prefer. Laissez-faire leaders remain available to provide support as needed, but they don’t interfere in day-to-day task management.

    Despite the negative publicity, laissez-faire leaders work extremely well when the team members are knowledgeable, experienced, and self-motivated. Giving individuals the autonomy to self-manage can provide high levels of job satisfaction and create trust. When it doesn’t work so well, productivity can drop and workers may start to avoid the jobs they dislike.

    What Type of Leader Are You?

    Do you recognize yourself in any of the above three descriptions? Although most people will have a natural inclination towards a particular style, the most effective leaders blend a combination of all three. Knowing what type of leadership style to use in any given situation can create the best possible results and leave team members feeling supported and satisfied.

     

  2. What’s The Deal With Flood Insurance?

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    By Bernie Cosentino, Vice President – Habitational

    It may be impossible to avoid a flood once it hits, but you can take steps beforehand to insure your property so that you are better prepared for it financially.

    After 2017’s severe hurricanes and flooding, did you ever consider investing in flood insurance? If so, you are certainly not alone.

    Flooding of your home or office can be a trying experience that taxes both your emotions and your finances. Even if you don’t live in a low flood-zone area, devastating flooding can still occur, often with very little warning. Hurricanes, heavy rainfall, or river or tidal surges can quickly cause excess water to build up, causing extensive damage to homes and businesses and destroying their entire contents. According to calculations on floodsmart.gov, for example, a six-inch flood in a 2,000-square-foot home can cost the homeowner nearly $40,000 in damages and repairs. In this example, some of the larger repairs include flooring ($15,000), furniture ($6,000) and wall and door replacement ($7,000).

    The average homeowner or business owner may not be aware that coverage for water damage for their property typically covers water damage from burst pipes or rain infiltration from a roof that may have been compromised in a storm. These perils are quite different than water damage caused by flood.

    Although they sound similar, water damage and flood damage are radically different insurance terms. If your home has been damaged by water, here’s how to determine if you need to file a flood insurance claim or a water damage claim.

    Simply put, the main difference between a flood claim and a water damage claim is where the water comes from. With flood damage, the water comes from a natural source and two or more properties are involved. You are most likely dealing with a flood damage claim if the water that is causing damage to your property is coming from one of the following sources: overflow of inland or tidal waters; unusual and rapid accumulation or runoff of surface waters from any source; mudflow or collapse of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.

    It may be impossible to avoid a flood once it hits, but you can take steps beforehand to insure your property so that you are better prepared for it financially. Most standard homeowner or business policies do not cover flooding unless separate coverage is purchased. Many victims of flooding may assume that federal programs will kick in to cover their losses, but this may not always be the case.

    In 1968, Congress created the National Flood Insurance Program (NFIP) to help property owners protect themselves in case of flooding. The NFIP offers flood insurance to homeowners, renters and businesses only if their community participates in the NFIP, agreeing to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.

    If your home or business is located in a high-risk flood area, you must have separate flood insurance in order to qualify for a mortgage from federally regulated or insured lenders. If you are located in a moderate- to low-risk area, you are typically not required to have flood insurance, but you may want to minimize your financial risk by purchasing a policy regardless.

    You may wish to investigate Private Market Flood insurance as well, which may be available at lower rates than what is available through the federal program. According to privatemarketflood.com—which sells policies as an alternative to government FEMA-backed policies—“older homes, second homes, nonprimary residences, commercial properties and small apartment buildings enjoy significant savings compared to FEMA policies.” In fact, the Private Market Flood insurance program now insures more than $1 billion of property value in 37 states.

    There are myriad factors that influence the cost of your premiums, including building size, location, amount of coverage desired and deductible amount, so it’s best to consult with your insurance agent to determine whether an NFIP policy or private flood insurance policy makes more sense for your particular situation.

     

  3. Employment Practices Liability Insurance: A Must-Have Policy for Every Business

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    By Meaghan Tyndale-Williams, Vice President – Commercial Lines

    It isn’t a matter of if an organization will experience an employment practice related claim; it is only a matter of when. In fact, according to Advisen, a leader in data solutions for the commercial insurance market, an employer with as few as 100 employees can expect a claim once every three years.

    Employment practice related claims are increasing, and the costs associated with defending such claims can be staggering. Perhaps most unnerving is that an organization doesn’t have to be in the wrong to face a potential lawsuit. Even the best corporate policies and procedures may not deter a lawsuit, making the purchase of employment practice liability insurance a crucial and necessary component to a company’s overall risk management portfolio.

    Employees Equal Exposure

    It’s simple. If an organization has employees, it needs an employment practices liability insurance (EPLI) policy. These policies cover the cost of defending EPLI claims and damages awarded to an employee for wrongful acts committed by the employer.

    However, each EPLI policy has very specific wording on exactly which wrongful acts are indeed covered. In general, most EPLI policies provide the following coverage:

    • Defamation
    • Discrimination
    • Failure to Provide Equal Opportunity Employment
    • Harassment
    • Retaliation
    • Violation of the Family and Medical Leave Act (FMLA)
    • Wrongful Discipline
    • Wrongful Failure to Promote
    • Wrongful Termination

    The hiring, disciplining, promoting, and training of employees requires more human interaction than practically any other aspect within a business. Because of this, the exposure to employment practices liability extends to past, present, and even prospective employees.

    Wage and Hour Claims

    A common exclusion on most EPLI policies is claims related to wage and hour. Laws pertaining to wage and hour fall under the Fair Labor Standards Act (FLSA). The Act establishes minimum wage, overtime pay, recordkeeping, and child labor standards.

    Common claims include jobs which have been misclassified or the denial of overtime. And with our ever-improving technology, claims for “off the clock” work, ranging from checking emails to responding to text messages, have increased. In each scenario, an employee is paid less than what has been assured to them under federal law.

    Although coverage for wage and hour claims can be added to an EPLI policy, it will come at an additional cost. Claims related to FLSA are on the rise as employees themselves become more knowledgeable about their rights under the Act.

    The Third Party

    In addition to wage and hour claims, third-party claims are also commonly excluded from EPLI policies. Also available for an additional premium, third-party coverage can protect an organization from outside vendors, customers, or other individual claims.

    For example, a delivery driver routinely is sexually harassed by a business’s employee. If the driver were to file a harassment lawsuit against the organization, an EPLI policy which includes third-party coverage would respond.

    In today’s highly litigious environment, coupled with increased courage by employees in outing and confronting discrimination, harassment, and other inappropriate acts, businesses are exposed more than ever to a claim. Ensuring your employment practices liability insurance policy will meet the exposures of today’s world has never been more important.

    Limits Available

    Employment practices liability coverage can often be provided as an endorsement to a business owner’s policy. However, it is a best practice to have a stand-alone policy which may provide broader coverage and not be affected by an underlying policy.

    Most stand-alone policies begin with a $1 million limit and increase from there. The limit of insurance typically includes costs associated with settlements, judgments, and legal defense costs. Claims related to wage and hour (FLSA), third-party, and other exposures typically have a lower sublimit associated with them. It is important to note limits may be reduced or their availability shortened during times of mass staff reductions, mergers, or acquisitions.

    Cost of Coverage

    The cost of obtaining an employment practices liability policy is dependent on many factors including the following:

    • Hiring and Firing Procedures
    • Management’s Experience
    • Number of Employees
    • Prior Claims History
    • Type of Business

    Most policies also include a deductible, which is an amount that must be paid by the insured before a policy will respond to a claim.

    Not having an EPLI policy in place not only exposes an organization to the obvious costs associated with a claim, including defense and damages, but also the nonquantifiable costs. When an organization becomes entangled in an employment dispute, morale can decline, negatively impacting productivity. And in more extreme scenarios where claims are made public, a business’s reputation could be at risk.

    The costs associated with not carrying employment practices liability insurance outweigh whatever premium your chosen insurance company wishes to charge. If you have employees, you need EPLI.

     

  4. Let’s Talk Limits: How are the 6 CGL Limits Related?

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    By Gwenyth Luu, Director – Commercial Lines

    Any organization that purchases Commercial General Liability (CGL) insurance should have a good understanding of how limits of liability apply to claim payments in the policy. That information not only helps organizations choose what the best limits are for their policy, but it also helps them understand the requirements for umbrella or excess liability policies.

    People often speak about General Liability as if it is one coverage. General Liability is really a broad term that refers to a package of coverages and coverage limits. These coverages and how they work are often misunderstood. On the most basic level, the CGL policy covers against lawsuits alleging bodily injury, personal injury, and property damage due to negligence.

    A CGL policy has six different limits shown on the declarations page. While those limits are individual, they are also interrelated. What does that mean? Simple: a reduction due to a payment on one limit will reduce other limits as well. There is one caveat: after issuance of a CGL policy, any attempts to extend the policy period through an endorsement for less than 12 months has an adverse effect on the aggregate limits. It is better to write a longer policy period into the CGL policy at inception than to extend it in most cases.

    Two of the six limits are Aggregate Limits and are related. Aggregate Limit means that it is the most an insurer will pay during a policy period. Once the insurer has paid the full amount of the Aggregate Limit, the insurer has no further obligation to pay the insured for any claims or suits that fall within the exhausted aggregate limits. Hence, an umbrella or excess liability policy aims to drop down over an exhausted aggregate underlying limit.

    As we go through the limits, it may get confusing. To help illustrate the concept, imagine two large water tanks at full capacity as Aggregate Limits (at the beginning of the policy period) and four smaller, unfilled water tanks for the other CGL limits. Each small water tank is connected respectively to its own large water tank. When claims are paid from the smaller tanks, it draws water from the larger Aggregate tanks, reducing the water from the Aggregate tanks until they are empty. Once the large water tanks are empty, it means the Aggregate Limits are exhausted.

    The General Aggregate Limit

    The General Aggregate Limit is the most the insurance company will pay in any one policy year for claims arising out of your organization’s operations: Bodily Injury and Property Damage (Coverage A), Personal and Advertising Injury (Coverage B), and Medical Payments (Coverage C).

    Products-Completed Operations Aggregate Limit

    This aggregate limit indicates how much an insurer will pay for damages because of bodily injury or property damage resulting from the Products-Completed operations hazard. The Products-Completed Operations Aggregate is separate from the General Aggregate Limit. Payments for damages out of the Products-Completed Operations Limit does not affect the General Aggregate limit and vice versa. Under the CGL policy, the total liability exposure for the insurer is the sum of the two aggregate limits.

    To be a bit more specific, the Products-Completed Operations Limit only applies to the following cases of property damage or bodily injury:

    • Incident occurred away from the premises of the named insured, and
    • Arose due to products of the named insured that are no longer in the possession of the named insured, or
    • Arose due to work that was completed by the named insured.
    • Personal and Advertising Injury Limit

    Personal Injury refers to slander, libel, invasion of privacy, and defamation of character. Advertising Injury refers to false advertising practices. This coverage provides protection from suits related to any of these offenses. The most the insurer is required to pay is established in this Personal and Advertising Injury Limit. There are a couple of things to know about this limit:

    It is independent of the Each Occurrence Limit in Coverage A (Bodily Injury and Property Damage); however, an insurer may be required to pay both the Personal and Advertising Injury Limit and Each Occurrence Limit.

    It is applied not to each offense but to each person or organization. Regardless of the number of persons or organizations claiming damages, the most the insurer is required to pay is the Personal and Advertising Injury Limit.

    Each Occurrence Limit

    This is the maximum that the insurer is obligated to pay for any damages within Coverage A and expenses within Coverage C. Despite a separate General Aggregate Limit for Products-Completed Operations, all damages paid under Coverage A and all expenses paid under Coverage C are subject to the Each Occurrence Limit. For the purpose of this article, an “occurrence” by policy definition is defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

    An example of this would be a cheese processor preparing a shipment improperly, resulting in the sale of contaminated or otherwise compromised cheese. As a result, multiple people become ill. Each one of those individuals then sues the company. Does this count as multiple occurrences or does it count as one? There are two views. The first looks at the cause of the liability, which would consider them all to be the same occurrence. The second looks at the effect, which would find each individual injury to be a separate occurrence.

    Damage-to-Premises-Rented-to-You Limit

    This separate limit applies to fire damage to premises rented from a landlord by the insured and to damage—regardless of cause—to premises or their contents occupied for seven days or less by the insured. This limit applies to any premises and is a sublimit of the Each Occurrence limit. Payments under this coverage reduce the Each Occurrence and General Aggregate limits.

    Medical Expense Limit

    Medical Expenses are Coverage C, and they are meant to pay for reasonable medical treatments resulting from accidents or injuries, regardless of who is at fault. Like the Damage-to-Premises-Rented-to-You Limit, payments under this coverage reduces the Each Occurrence and General Aggregate limits.

    Understanding not only your CGL policy but also how limits can come into play if a claim is made are essential to successfully protecting your organization from risk. After all, having coverage is good, but having the wrong understanding isn’t going to help anyone. It should be more than apparent that the way limits work and connect to each other are complicated, and having a professional there to help is essential.

     

  5. Factors That Affect Your Home Insurance Premiums

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    Home insurance coverage can differ from policy to policy depending on a multitude of factors. Being aware of these factors that affect your premium can ensure that you are appropriately covered. Review this Know Your Insurance to understand the factors that are influencing your home insurance premiums.

    Your Personal Information

    Your credit history, claims history and marital status can all contribute to your premium costs:

    • Credit history—In most cases insurance companies will take your credit history into account when calculating your home insurance premium. Insurance companies will look at how good you are at making payments and how much debt you currently have. Typically, the better your credit score, the lower your insurance premium.
    • Claims history—Any claims you’ve made at previous residences will be assessed by your insurance company when determining your premium. The type and frequency of the claims you’ve filed can lead to higher premiums.
    • Marital status—Those who are married have been found to file fewer insurance claims than single individuals. Therefore, if you are married, you will generally have lower premiums.

    Your Policy

    The way you and your broker construct your insurance policy also determines your premiums. The following are policy items that have the greatest impact on the amount you pay:

    Type of coverage: There are three different coverage options you can purchase for your home insurance policy:

    • Actual cash value will replace your home or damaged belongings, minus depreciation. Depreciation is the decrease in an item’s value over time due to wear and tear.
    • Replacement cost pays to repair or replace your home or belongings without any deduction for depreciation.
    • Extended replacement cost is the most expensive coverage option—but, it will pay to rebuild your home even if the replacement cost exceeds your policy limit.

    Limit: Your policy limit is the maximum amount that your insurance will pay in the event of a covered loss.

    Deductible: Your deductible is the amount you pay in order for your insurance coverage to kick in to help cover a loss.

    Additional coverage: You may choose to purchase additional coverage for items or circumstances that may not be fully covered under a standard home insurance policy. Possible circumstances may include keeping more expensive items at your home (e.g. boats, fine art or jewelry), or living in an area more susceptible to disasters that aren’t already covered under your existing policy.

    Your Home

    There are a few factors about your home that may affect your premiums:

    • Home value — The value of your home can also influence the cost of your insurance. Typically, the greater the value of your home, the higher your insurance premiums will be.
    • Age of property — Older buildings tend to have costlier premiums since the materials they’re built with may be more expensive and harder to replace. For example, if you have stained-glass windows in your home, that could cost more to replace than a standard window since stained-glass windows are far less common.
    • Remodeling — Any improvements made to your home will lead to an increase in your premiums since renovations typically increase the value of your home—therefore increasing your home’s replacement costs. Although, repairs made to your roof, electrical or plumbing that increase safety or efficiency may allow you to receive discounts that can reduce your premiums. Always alert your broker about new home remodels to ensure they can be replaced if damaged or destroyed.

    Location

    If your home is located in a high-risk area, you will commonly pay more for your home insurance. Homes that are considered at a higher risk for damage or loss are those located near coastlines, farther away from response teams (fire or police departments) or are in areas that are more susceptible to natural disasters.

    Home-based Businesses

    If your home is being used for work purposes, you may need to purchase additional coverage. Most standard home insurance policies will provide some liability coverage and limited protection for business equipment you may keep at your home, but it may not be enough. To ensure you are sufficiently covered, you may choose to purchase additional coverage or add to your home insurance policy.

    Attractive Nuisances

    Attractive nuisances are potentially dangerous objects that could attract people, including children, onto your property. The most common attractive nuisances are pools and trampolines—if you have either on your property, you will pay more for your insurance premium.

    Dogs

    Depending on your insurance policy, your dog may be covered under your home insurance policy if they are involved in a liability claim. But, some dog breeds that are marked “aggressive” may have limited coverage or none at all. The most common dog breeds that insurance companies are wary to cover are Rottweilers and pit bulls.

    We’re Here to Help

    It’s imperative to have a clear understanding of your policy and how it works to help you recover from a loss. Remember to review your policy regularly to ensure it protects your home thoroughly, and contact us for additional guidance.

     

  6. The Basics of Builders Risk Insurance

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    Building and construction projects are complicated with no shortage of things that can go wrong. With everything that can happen during the construction process, it is essential to have the proper insurance in place. Of all of the different insurance coverages to consider, builders risk insurance is one of the most essential for companies in the construction industry.

    While builders risk insurance, also sometimes referred to as course of construction insurance, is important, it is also very complex and easily misunderstood. This Coverage Insights examines what you need to know about builders risk insurance and how it can protect your company.

    What Is Builders Risk Insurance?

    Builders risk insurance is a specialized type of property insurance that is intended to provide protection for buildings and structures that are under construction. These policies protect project owners, general contractors and subcontractors against direct physical loss or damage to covered property.

    In many instances, builders risk policies also provide coverage for materials and supplies that are on-site, in transit and being stored temporarily at off-site locations if they are intended to become a permanent part of a building or structure. What’s more, builders risk policies can be written to include coverage for loss of income and additional expenses. This coverage would apply if the completion of a project is delayed due to property damage caused by a covered cause of loss.

    Builders risk coverage is a temporary form of insurance. Coverage applies only during the course of construction, erection and fabrication. In most cases, builders risk coverage stays in force until a construction project is accepted by the project owner or once construction is considered complete. Once construction is completed, it is up to the owner of the building or structure to secure traditional property insurance.

    Another thing to keep in mind is that there is no standard form of builders risk insurance. Policies can vary between insurance companies, and, in many instances, the coverage terms of a builders risk policy can be negotiated. In most cases, builders risk policies are written on an “all risk” basis. This means that coverage applies for all causes of loss except those specifically excluded by the policy.

    What Am I Protected From?

    Builders risk insurance can cover a wide range of causes of property damage. The exact parameters of your policy may vary, but in general, builders risk insurance includes coverage for the following causes of property damage:

    • Fire
    • Wind
    • Hail
    • Theft
    • Lightning
    • Explosion
    • Impact by vehicle or aircraft
    • Vandalism

    It is important to comb over your policy carefully in order to make sure you are aware of what is and isn’t covered under your builders risk insurance. Builders risk policies often do not provide coverage for property damage caused by flaws in design, planning or workmanship. Other specific exclusions may be included in your policy. While exclusions vary from policy to policy, the following cases of loss are typically not covered under builders risk policies:

    • Property damage caused by employee dishonesty or theft
    • Property damage caused by earthquakes
    • Acts of war
    • Government actions
    • Mechanical breakdowns

    Talk to Your Broker

    Builders risk insurance is necessary coverage for many businesses. Remember, we’re here to help you with all of your construction industry insurance needs. Protect your project, your wallet and your company by contacting us to discuss builders risk insurance today.

     

  7. The ABCs of Captive Insurance

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    By Conor Moran, Assistant Vice President – Commercial Lines

    What is captive insurance and is it a good idea for your workers’ compensation coverage? Captives are formed by companies as subsidiaries whose sole purpose is to insure the risks of their corporate parents. They are especially useful in situations where conventional insurance that meets your unique needs is unavailable or the price is exorbitant due to the degree of risk involved. A captive allows you to essentially pay insurance premiums to your own corporate structure rather than an outside carrier, garnering the opportunity to profit from your captive’s investments.

    Although captive insurance companies have been around since the 1980s, they have mostly been used by large companies that could afford to take on the risk. More recently, however, the structure has been implemented by small- to mid-sized companies too. Good candidates for establishing a captive insurance company include businesses that:

    Want to have better control over their workers’ comp programs, with more streamlined administration and faster turnaround times;

    Have sufficient business risk to support the premiums;

    Have consistent, free cash flow of at least $500,000 per year; and

    Are willing to commit to a long-term strategy to control their risk.

    While captive insurance premiums are tax deductible, the IRS has cracked down sharply on businesses using their captive insurance companies as tax shelters, and they have fallen out of favor with some business owners. Yet when established and reported properly, they can be a great idea for workers’ comp insurance plans.

    With a captive insurance company, businesses no longer need to rely on the whims of the commercial market with its accompanying volatility and threat of policy cancellations. By managing larger retentions backed by your captive, you can achieve potential premium savings of 20 percent or more, along with a potential return on your investment from funds otherwise paid to an insurance carrier. In a down year, you can minimize losses with protection through prefunding and reinsurance.

    The key to success in the captive market is to only assume reasonable risk, with premiums calculated by an independent actuary. You should implement a proper governance structure, directed by the captive owner, and maintain a conservative and reasonably prudent investment portfolio. Be sure to maintain consistency in your claims guidelines and don’t try to adopt a “we cover everything” approach. Finally, locating your captive in a highly receptive captive domicile can be helpful as individual states can vary on this issue.

    One of the best features of captive insurance is the fact that you have control.

    If a valued worker is awaiting compensation following an injury, you can ensure that he or she is kept on track toward recovery with timely reimbursements, rehabilitation program approvals, and other medical allowances. If a “worst case” catastrophe hits, you can be sure you’re ready and staffed appropriately to handle your needs.

     

  8. The Unseen Danger of Cyber Liabilities

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    By Chase Helwig, Assistant Vice President – Commercial Lines

    Does a substantial portion of your business operate utilizing some form of technology? Do you store customer and business information on your computers? How about your technicians or employees? Do they use their phones to help communicate important details about work?

    Chances are, the answer to the majority of these questions is a resounding “yes.” A common misconception of business owners is that if they are not a tech company or gigantic corporation, then they do not have cyber liability exposures. Well, if you answered yes to the above questions as most businesses do, then you do have cyber exposures. That shouldn’t be too much of a surprise, especially considering how quickly new technologies are coming out to simplify business. Every one of us has been there at some point, whether it’s storing purchase orders in a database or utilizing software-as-a-service (SaaS) solutions to solve problems at work.

    Technology has made life easier in innumerable ways. Unfortunately, nothing easy comes without a price. When it comes to technology, that price is a dramatically increased liability pool. If you follow the news, it would be hard to miss some of the consequences of cyberattacks and cyber liabilities in general. It seems like every day a company faces a huge breach, whether it’s Target in 2013 (which affected 41 million people and ended up costing the company $18.5 million) or even Equifax in 2017. According to a 2017 study sponsored by IBM and conducted through the Ponemon Institute, the average total cost of a data breach in 2017 was $3.62 million.

    There is a light at the end of the tunnel, however. Cyber insurance coverage is specifically designed to deal with data breaches and cybercrimes from both a regulatory and a civil liability standpoint. Many business owners believe general liability insurance can cover some of the damage stemming from cyber incidents. Unfortunately, that isn’t the case. Cyber insurance will mitigate liability which involves sensitive customer information and help deal with the consequences of it.

    Here are a few examples of what cyber policies generally cover:

    • Legal fees and expenses from civil or governmental entities
    • Notification of customers (many regulations require the notification of customers in the event of a data breach that involves personal information)
    • Repair/replacement of damaged equipment and systems
    • Data recovery from compromised units
    • Restoration of customer identities
    • Public relations (data breaches are often accompanied by a decreased brand opinion)
    • Business operations (to keep your business running while things are being fixed)

    Now it is time to ask again,

    Is your business adequately protected against cyber liabilities?

    Cyber attacks are becoming more and more prevalent, increasing in frequency right along with the technology that makes them possible. Insurance is just one piece to a larger puzzle. Ask for a comprehensive review of your cyber liability exposures prior to your renewal, as an uncovered claim could spell the end of your business.

     

  9. Does Your Business Need Employment Practices Liability Insurance?

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    By Chase Helwig, Assistant Vice President

    In 2016, the Equal Employment Opportunity Commission (EEOC) received 97,443 charges of workplace discrimination in private, federal, state, and local government workplaces. The EEOC responded to over 585,000 calls to their toll-free number and more than 160,000 inquiries in field offices.

    Since the financial crisis of 2007–2008, employee liability claims filed against employers have skyrocketed to nearly 100,000 annually, which is up 30 percent from the lows of the mid-2000s. If an employee files a claim against you and you are taken to court, or if you settle outside of court and you don’t carry Employment Practices Liability Insurance (EPLI), the cost could put you out of business.

    General liability insurance does not include EPLI, so talk to your insurance agent about what coverage you do have and consider the risk involved of not carrying EPLI coverage. Wrongful termination lawsuits have risen 260 percent in the past 20 years, and 75 percent of EEOC claims are made against small businesses with 50 or fewer employees.

    Employment practices liability insurance protects a business from lawsuits that are related to the Landmark Acts of Regulation. It covers employment discrimination, harassment, defamation, and retaliation. It provides protection against claims for the failure to hire, failure to promote, and wrongful termination. EPLI may also cover leased, seasonal, and independent contractors.

    The Landmark Acts of Regulation

    • Title VII of the Civil Rights Act of 1964
    • Age Discrimination in Employment Act of 1967 (ADEA)
    • Americans with Disabilities Act of 1990 (ADA)
    • Family and Medical Leave Act of 1993 (FMLA)
    • Genetic Information Nondiscrimination Act of 2008 (GINA)
    • Claims That Do Not Fall Under EPLI
    • Worker Adjustment and Retraining Notification Act (WARN)
    • Fair Labor Standards Act (FLSA)
    • Claims that fall under the National Labor Relations Act (NLRA)
    • Employee Retirement Income Security Act (ERISA)
    • Occupational Safety and Health Administration (OSHA)
    • Matters related to the continuation of benefits under COBRA

    How to Prevent Possible EPLI Claims

    No employee should be the victim of discrimination and ridicule. The executive leadership of any company or organization is responsible for fostering a culture of tolerance in their workplace. Conducting sensitivity training classes and responding promptly and courteously to all employee complaints is essential for the good health and future of your business.

    Consider the top six reasons employees sue their employer:

    1. Not giving a clear reason for firing an employee (this includes at-will employees)
    2. Firing an employee for bad performance when they have had good performance reviews. A poor-performance paper trail needs to be presented in court.
    3. Poor timing – firing an employee who has just filed an internal complaint against the employer or a supervisor
    4. Improper response to an EEOC charge – always respond promptly and courteously
    5. Failure to follow your own policies – make sure your HR and legal teams are providing the proper protection and training for management

    Don’t ever assume an employee is aware of and understands senior management’s policies. When an employee acts surprised and outraged at being terminated, it is because management did not clearly communicate with the employee.

    Employment attorneys are in general agreement that employees don’t always sue because the employer violated a law. Rather, they often sue because they were humiliated in the termination process and were not treated with respect and dignity.

     

  10. Disaster-Specific Insurance is Essential for Your Business

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    By Bernie Cosentino, Vice President – Habitational

    Imagine this scenario: You have been successfully operating your business for five years, seeing massive year-over-year growth. One year, a flood comes through and wipes out half of your equipment and damages large parts of your main office building. No big deal, right? You call your insurance agent to go over your policy and make a claim. Uh oh. Turns out you don’t have flood insurance and that flooding isn’t covered under your general business and property policies. What do you do now? Eat the cost—that’s about the only option available to you.

    Every business owner is well aware that general business policies and others, like workers’ compensation, are important. Many don’t, however, think about the importance of having disaster-specific policies which will cover them for disasters which could occur in their area. It’s very difficult to consider the types of disasters which could occur, and it’s even harder to understand and estimate potential losses that stem from those disasters. To compound the issue, consider the fact that right after a disaster occurs, a huge influx of claims is going to be filed at the exact same time.

    Different insurance types are available for different natural disasters (and there are even some for man-made disasters, like acts of terrorism). Many natural disasters are understandably omitted from business and homeowners insurance, though. That is the key element. Believing you are covered and actually being covered are two very different things. What coverage you need depends on where you are and what kind of losses you could potentially see.

    Specific types of insurance are available for almost all natural disasters, and understanding what you might need can be as simple as calling up a local professional who understands the geographic region you live in.

    The Midwest may have a lot of tornadoes, the South may have hurricanes, the North may have huge snowstorms and flooding. It all just depends on where you are and what sort of protection you might need to have.

    It should also be noted that this type of insurance is typically called catastrophic insurance due to the losses that could potentially be suffered and the large scale of the events. It is also different from hazard insurance. Confused yet? If you were, we wouldn’t blame you. Speaking with a professional is the best way to make sense of it all.

    Do you know what types of disaster insurance you may need (or be required to have)? If so, you are already ahead of the curve. If not, you may want to pick up the phone and make some inquiries. Reach out to a professional today to keep you protected from disasters tomorrow.