Protecting your business on the road

When an employee drives for business purposes, your company is technically behind the wheel. Whether the trip involves one employee driving his or her car to a supply store or several delivery vans, your company could be held responsible for any accident that might occur during the trip. According to data from the Bureau of Labor Statistics (BLS, 2008), motor vehicle-related incidents are the leading cause of on-the-job fatalities, accounting for over one third (35%) of worker deaths.

Ideally, a business auto risk management program addresses all automobile risks your business may face on a daily basis. Fleets, passenger cars, vans, and other vehicles driven by employees on company business should be factored into your risk management program. Without proper planning and insurance, transportation operations, such as sales calls and errands that require employees to drive their personal vehicles or those owned or leased by your company, may result in business loss. Taking preventive action to reduce motor vehicle accidents before they occur is the first step toward any successful business auto risk management program.

There are many strategies that may improve the safety of your employees on the road, but they all share one important focus—prevention. Here are a few suggestions:

• Screen job applicants. Anyone can have a car accident, regardless of his or her driving ability. Inquiring about a job applicant’s driving record and performing a drug test could save you from hiring a potential risk. Driver attitude and behavior are also worthwhile considerations.
• Encourage consistent use of seat belts. According to the Network of Employers for Traffic Safety (NETS, 2007), many lives could be saved if seat belts were used consistently. NETS found that if seat belt use increased to 85%, 4,194 deaths could be prevented nationwide each year.
• Choose vehicles with a focus on safety. Vehicles that are equipped with safety features will better protect your employees in case of an accident. While seat belts may be the most effective safety feature, airbags, anti-lock brakes, and daytime running lights are also important.

An effective business auto risk management program is not complete without a sound insurance plan. Be sure you know what your business auto policy covers and what it does not. You’ll find the details of your coverage on the policy declaration page. As your business grows and changes, make sure your insurance protection is adequate. Consider the following:

• Non-owned auto coverage. Be certain your policy covers your employees’ use of their own vehicles for company purposes. Your policy should indicate coverage for “non-owned autos.” This is often designated by symbol “9” on your declaration page.
• Choosing the same carrier. Depending on the nature of your business, consider purchasing your business auto policy and your commercial general liability policy from the same insurance company to avoid possible complications when a claim could be covered—or excluded—by both policies.
• Coverage for vehicle contents. Vehicle contents are generally not covered by a business auto policy, so you should make sure proper coverage is in place via the policy providing your business personal property coverage.

There are many options available to meet your business auto needs. Assess your company’s current operations to help identify high-risk exposures, and then find effective methods for loss prevention. For more information, contact one of our qualified insurance professionals.

Electronic commerce and communication: a few insurance tips

Business opportunities in the virtual world of electronic commerce abound, but they inherently include exposure to risks and possible losses. In fact, business owners who operate in cyberspace may be subject to risks that are not necessarily covered under their insurance policies.

The insurance industry is currently addressing liabilities associated with electronic commerce and communication by offering a mix of errors and omissions and commercial general liability policies. If you are operating in cyberspace, you may want to evaluate your own exposure to Internet liabilities in order to determine the extent of your insurance needs. Below are three main risks today’s Internet businesses face:

Intellectual Property Risks. Currently, the Internet allows for the reproduction of logos, trademarks, and other copyrighted material through software and downloads. This technology could infringe upon the rights of other parties. Also, losses could arise if the enabling technology fails to perform as expected or guaranteed.

Media Liability Risks. As you surf the Internet to provide and promote your products and services, consider the risks associated with the creation, manipulation, or dissemination of content found in cyberspace. Some issues to consider are copyright and trademark infringement claims resulting from the use of published material, defamation suits caused by the broadcasting of libel and slander throughout global chat rooms, and invasion of privacy claims from tracking files that monitor user visits (i.e., “cookies”).

Breaches of Security Risks. Information you provide online could expose you to risk of loss if that information is stolen, damaged, or released without your consent. Security breaches or loss of data can occur by error (e.g., system malfunction) or malicious intent (e.g., computer hackers).

What to Do?

As you conduct business on the Internet, your risks and your exposure to associated risks may vary. Here are a few tips about insurance coverage for online activities that may help you navigate the web of potential liabilities:

• Review your liability, property, and other insurance policies for coverage in those geographic locations where you intend to work. Generally, insurance policies limit coverage to specific geographic regions, so you may not be protected against claims instigated in other states and countries.
• Consider purchasing specialized insurance policies that are similar to those purchased by media and communications professionals. Generally, companies using the Internet to provide or promote products and services are subject to the same risks as companies in the media industry.
• Attempt to obtain business interruption insurance that is not specifically tied to a physical event or occurrence. For example, loss of Internet service that could prevent you from conducting business could result from system viruses and other technological breakdowns.
• Develop and maintain a formal, written business Internet and intranet policy, a policy for responding to and remedying complaints, and procedures for dealing with independent contractors and consultants. Be sure to train your employees accordingly.

As you conduct business in cyberspace, consider your company’s online liability risks and the insurance you may need to protect your interests. One of our qualified insurance professionals can assist you in obtaining the appropriate coverage before a virtual malfunction becomes a real world loss.

When disaster strikes,business income insurance to the rescue!

Recent disasters have prompted business owners to evaluate their disaster preparedness, risk management, and insurance programs. If a natural disaster were to force you to temporarily suspend business operations, how would you meet your payroll obligations or cover other fixed costs?

Business income insurance, also called business interruption coverage, is designed to replace the income your business would generate under normal circumstances in the event of a disaster or other covered peril. It can help your company get back on its feet by providing funds to help cover critical expenses and lost profit until the business is up and running again.

Policy Limits

Most policies restrict coverage to business interruptions that cause direct physical damage to or the loss of property at the insured site. Special coverage is needed for boiler and machinery breakdowns and off-premises power failures.

Besides covering critical fixed costs during a shutdown, you may also require funds to help accelerate your recovery after a loss. For instance, you may need to hire temporary help, rent or purchase new equipment, or rent or move into a substitute facility. These are referred to as “extra expenses.” Some policies cover these costs, while others do not. You may also purchase extra expense coverage separately.

To determine the appropriate amount of coverage, estimate the maximum time operations could be suspended by a covered loss and assess the lost profit and continuing expenses that would accrue during the interruption. If continuing your operations after a loss is essential, determine the cost beyond normal expenses (air freight, cost of equipment, overtime pay for construction workers, cost of moving and temporarily operating elsewhere, etc.) to continue operating during reconstruction.

Be Prepared

It is important to realize that business income coverage is limited to the period of time it takes to restore damaged property. Since time will be of the essence if disaster strikes, it is worthwhile to identify your exposure in advance so you will be able to take action immediately. Here are a few tips:

• Create an action plan noting everything that must be done to resume operations on a full- or part-time basis after a disaster.
• Identify all machinery and equipment critical for business operations and develop a plan to provide backup coverage, if needed.
• Locate alternate sources for the materials and supplies you rely on, in case something should happen to your major supplier. If a supplier is responsible for a sizable portion of your revenue, consider contingent business income coverage for protection, should the supplier sustain a catastrophic property loss.

There are many things to consider when it comes to helping your business survive a crisis. Business income insurance can help provide a critical source of funds during a temporary shutdown. For more information, and to address your specific circumstances, give us a call.

Protect the MVP from a disability

You may be your business’s most valuable player (MVP). Therefore, proper measures should be taken to protect both your income and your business should you suffer a disability. Disability income insurance offers protection against an accident or health crisis that limits your ability to earn income. Depending on your income, coverage may replace 45% to 75% of your pre-disability earnings. The policy’s cost generally depends on such factors as the risk level of your occupation, your age, your health, and the scope of coverage. Consider the following policy features:

Definition of Disability. Some policies cover you if you are unable to work in your current occupation or one appropriate for your training and level of experience. In contrast, other policies cover you only if you are unable to work in any occupation. If you become disabled, this distinction can make a big difference.

Residual Benefits or Partial Disability Coverage. Under certain specified circumstances, if you become disabled but are able to earn a portion of your previous income, residual benefits or partial disability coverage pays a portion of your benefits to supplement your reduced income.

Guaranteed Renewable. With this feature, the insurer cannot refuse to renew your policy or change any terms, except for premium cost, as long as you continue to pay your premiums on time.

Guaranteed Insurability. This provision allows you to increase your monthly benefit, even if you experience health changes that would otherwise prevent you from obtaining additional disability coverage.

Cost-of-Living Adjustment (COLA). This feature helps protect your benefits against the effects of inflation during a long-term disability.

Also, consider a business overhead expense (BOE) policy that can help cover lost profits and continuing fixed costs, such as salaries and ongoing business expenses, in the event you suffer a disability.

In general, disability benefits are paid monthly after a predetermined waiting period, limited to a maximum amount and a specified period of time. A comprehensive disability plan that includes both disability income and business overhead expense insurance can help protect your livelihood and ensure that your business stays up and running.