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Protect Your Business From Harassment and Bullying Allegations

Protecting Your Business from Harassment and Bullying Allegations in the Digital Era

REPRINTED FROM THE HARTFORD

Businesses should know that when an employee participates in online behavior that leads to other employees feeling harassed or bullied, there is an insurance policy to manage such claims and provide resources to mitigate ongoing exposures.

How often do you reach for your cell phone?

Chances are it’s several times a day. For a call, a text, to check the local weather or find a nearby eatery for lunch, our phones have become the catch-all for our daily needs. They have also made everyone available 24/7, delivering news and information and, yes, even providing a means for people to harass and bully others via social apps.

“Research shows a significant increase in people experiencing harassment or bullying through social media and online platforms,” relayed Jennifer Barbee, head of middle market management liability, The Hartford.

“With the rise of social media platforms like TikTok, Instagram and X (formerly Twitter), there are more channels and avenues for people to feel intimidated or to share inappropriate or unwanted information and images.”

While this is disconcerting for society, it should be top of mind for companies as well. If an employee is consistently engaging in behavior that is deemed unwelcome or unwanted by a colleague, it can become a material concern for their employer.

For this reason, employers are going to want to make sure their employment practices liability (EPL) insurance — which is designed to cover incidents of harassment in the workplace — is equipped to cover employees contributing to cyberbullying, discrimination or harassment online. Employers should seek out EPL coverage that specifically includes wrongful acts that occur via social media or social networks, such as the EPL policies within The Hartford’s recently released Private Choice Preferred suite of coverages.

Challenges of 24/7 Access

Over 300 million individuals regularly engage with social media, averaging two hours of use each day. Social media is viewed as a personal platform, but more and more, users are incorporating their professional lives into it, blurring the lines between work and personal spaces.

Employers can be held liable for employees who use personal social media accounts to engage in less-than-ideal behaviors, and the incidence of cyberbullying and harassment in the workplace is on the rise.

According to one survey, the frequency of online incidents rose 57% from 2017 to 2022, and 31% of the U.S. workforce responded that they had experienced some form of online bullying. Between 14 and 20% of respondents felt they had been a victim of cyberbullying in the previous week.

From unwanted contact and offensive jokes or images to cyberstalking, suggestive comments and threats, online harassment can include a number of poor behaviors. Further, there’s a level of tone that can get lost with online speak, adding confusion and upset to situations.

“Email, texting and social media channels can be difficult to interpret in the workplace. Even with good intentions, the tone of a message can be easily misunderstood,” Barbee said. “The lack of face-to-face interaction and the inability to convey nonverbal cues in these digital communications contribute to the challenges in accurately interpreting tone and intention.”

Finally, this digital world and its full-time access to people can inspire a level of bravery that some might not exhibit in person.

“Digital platforms create a sense of anonymity and distance, emboldening individuals to say and do things they might not otherwise,” said Barbee. “The lack of immediate, face-to-face consequences can lead to more aggressive or inappropriate behavior online.”

Consequences, Consequences

Employees who misbehave online — whether on their own time or not — can still disrupt a workplace. Harassing coworkers can lower morale for more than just the people directly impacted by their actions and can lead to lawsuits. Employers can be held accountable for such behavior by employees, and a solid policy around expectations and consequences is imperative.

“Today, more people report feeling bullied, and the issue has come to light in terms of how it impacts people. Coupled with the mental health challenges that have emerged post-COVID, this has led to increased settlements. In harassment cases, the presence of pictures or other evidence, such as text messages, tends to significantly increase the settlement amount, as it moves beyond a ‘he said, she said’ situation.”

Meanwhile, nuclear verdicts, above-average settlements and social inflation have led to a challenging legal environment for all businesses.

“Society has become more empathetic to what individuals are going through, and this has contributed to the rise in nuclear verdicts in the EPLI space,” Barbee explained.

Society is pushing toward zero tolerance of harassment and bullying behavior, empowering individuals to speak out against abuse and victimization. This growing empowerment to speak out is a very noble and important practice to prevent negative events from continuing — and it’s one that has already impacted the insurance industry.

“Insurers are reassessing their risk exposure and coverage offerings,” Barbee said. “It’s highlighting the importance of having a robust policy and procedure in place to handle these sensitive situations appropriately and compassionately.”

Stopping Incidents Before They Become Allegations

Insurers’ aim is to ensure their claims processes are equipped to handle these cases with care and professionalism, which includes training claims adjusters and offering resources and support for claimants.

Employers looking to protect their workers and remain whole should be implementing strategies to keep pace with both their insurers and the changing landscape of digital harassment.

That starts with proactively setting expectations with employees around preventing cyberbullying and harassment.

Employers can do this by implementing a social media policy and including it in their employee handbooks, outlining what kinds of behaviors are not tolerated on both company-owned and personal social media accounts.

“For instance, the policy should provide guidelines on appropriate behavior when interacting with colleagues on social media platforms. It’s important to remember that even on platforms like Snapchat, where content disappears, inappropriate comments or pictures can still be reported and have consequences,” said Barbee.

Defining what harassment and bullying look like in text, images and comments made via social media will also show employees what is not acceptable behavior online.

Perhaps the most important element of company procedure is to provide guidelines for reporting and responding to incidents should they occur. It is imperative that employees coming forward feel heard and safe when voicing their concerns.

“It is not appropriate for a business to dismiss allegations purely because they happened outside work hours or on personal accounts,” Barbee said. After all, the matters that tend to be more significant and costly for companies are those where allegations are dismissed.

“Taking complaints seriously and having a well-defined process for addressing them can help mitigate potential risks and create a safer work environment,” Barbee said.

As always, having adequate insurance is just as important, including shoring up EPLI coverages. According to Barbee, the EPLI market is currently classified as a soft market based on its significant capacity, pricing, and broad terms and conditions.

“It’s important to educate employers and businesses about the potential exposures they face, regardless of their size,” Barbee added. “Some companies still believe that their familial atmosphere or the state’s at-will employment laws protect them from lawsuits, but they must be prepared to defend against allegations of harassment or discrimination.” &

Protecting Your Business from Harassment and Bullying Allegations in the Digital Era

By:  | May 6, 2024

How often do you reach for your cell phone?

Chances are it’s several times a day. For a call, a text, to check the local weather or find a nearby eatery for lunch, our phones have become the catch-all for our daily needs. They have also made everyone available 24/7, delivering news and information and, yes, even providing a means for people to harass and bully others via social apps.

“Research shows a significant increase in people experiencing harassment or bullying through social media and online platforms,” relayed Jennifer Barbee, head of middle market management liability, The Hartford.

“With the rise of social media platforms like TikTok, Instagram and X (formerly Twitter), there are more channels and avenues for people to feel intimidated or to share inappropriate or unwanted information and images.”

While this is disconcerting for society, it should be top of mind for companies as well. If an employee is consistently engaging in behavior that is deemed unwelcome or unwanted by a colleague, it can become a material concern for their employer.

For this reason, employers are going to want to make sure their employment practices liability (EPL) insurance — which is designed to cover incidents of harassment in the workplace — is equipped to cover employees contributing to cyberbullying, discrimination or harassment online. Employers should seek out EPL coverage that specifically includes wrongful acts that occur via social media or social networks, such as the EPL policies within The Hartford’s recently released Private Choice Preferred suite of coverages.

Challenges of 24/7 Access

Jennifer Barbee, head of middle market management liability, The Hartford

Over 300 million individuals regularly engage with social media, averaging two hours of use each day. Social media is viewed as a personal platform, but more and more, users are incorporating their professional lives into it, blurring the lines between work and personal spaces.

Employers can be held liable for employees who use personal social media accounts to engage in less-than-ideal behaviors, and the incidence of cyberbullying and harassment in the workplace is on the rise.

According to one survey, the frequency of online incidents rose 57% from 2017 to 2022, and 31% of the U.S. workforce responded that they had experienced some form of online bullying. Between 14 and 20% of respondents felt they had been a victim of cyberbullying in the previous week.

From unwanted contact and offensive jokes or images to cyberstalking, suggestive comments and threats, online harassment can include a number of poor behaviors. Further, there’s a level of tone that can get lost with online speak, adding confusion and upset to situations.

“Email, texting and social media channels can be difficult to interpret in the workplace. Even with good intentions, the tone of a message can be easily misunderstood,” Barbee said. “The lack of face-to-face interaction and the inability to convey nonverbal cues in these digital communications contribute to the challenges in accurately interpreting tone and intention.”

Finally, this digital world and its full-time access to people can inspire a level of bravery that some might not exhibit in person.

“Digital platforms create a sense of anonymity and distance, emboldening individuals to say and do things they might not otherwise,” said Barbee. “The lack of immediate, face-to-face consequences can lead to more aggressive or inappropriate behavior online.”

Consequences, Consequences

Employees who misbehave online — whether on their own time or not — can still disrupt a workplace. Harassing coworkers can lower morale for more than just the people directly impacted by their actions and can lead to lawsuits. Employers can be held accountable for such behavior by employees, and a solid policy around expectations and consequences is imperative.

“Today, more people report feeling bullied, and the issue has come to light in terms of how it impacts people. Coupled with the mental health challenges that have emerged post-COVID, this has led to increased settlements. In harassment cases, the presence of pictures or other evidence, such as text messages, tends to significantly increase the settlement amount, as it moves beyond a ‘he said, she said’ situation.”

Meanwhile, nuclear verdicts, above-average settlements and social inflation have led to a challenging legal environment for all businesses.

“Society has become more empathetic to what individuals are going through, and this has contributed to the rise in nuclear verdicts in the EPLI space,” Barbee explained.

Society is pushing toward zero tolerance of harassment and bullying behavior, empowering individuals to speak out against abuse and victimization. This growing empowerment to speak out is a very noble and important practice to prevent negative events from continuing — and it’s one that has already impacted the insurance industry.

“Insurers are reassessing their risk exposure and coverage offerings,” Barbee said. “It’s highlighting the importance of having a robust policy and procedure in place to handle these sensitive situations appropriately and compassionately.”

Stopping Incidents Before They Become Allegations

Insurers’ aim is to ensure their claims processes are equipped to handle these cases with care and professionalism, which includes training claims adjusters and offering resources and support for claimants.

Employers looking to protect their workers and remain whole should be implementing strategies to keep pace with both their insurers and the changing landscape of digital harassment.

That starts with proactively setting expectations with employees around preventing cyberbullying and harassment.

Employers can do this by implementing a social media policy and including it in their employee handbooks, outlining what kinds of behaviors are not tolerated on both company-owned and personal social media accounts.

“For instance, the policy should provide guidelines on appropriate behavior when interacting with colleagues on social media platforms. It’s important to remember that even on platforms like Snapchat, where content disappears, inappropriate comments or pictures can still be reported and have consequences,” said Barbee.

Defining what harassment and bullying look like in text, images and comments made via social media will also show employees what is not acceptable behavior online.

Perhaps the most important element of company procedure is to provide guidelines for reporting and responding to incidents should they occur. It is imperative that employees coming forward feel heard and safe when voicing their concerns.

“Taking complaints seriously and having a well-defined process for addressing them can help mitigate potential risks and create a safer work environment,” Barbee said.

As always, having adequate insurance is just as important, including shoring up EPLI coverages. According to Barbee, the EPLI market is currently classified as a soft market based on its significant capacity, pricing, and broad terms and conditions.

“It’s important to educate employers and businesses about the potential exposures they face, regardless of their size,” Barbee added. “Some companies still believe that their familial atmosphere or the state’s at-will employment laws protect them from lawsuits, but they must be prepared to defend against allegations of harassment or discrimination.” &

Autumn Demberger is a freelance writer and can be reached at riskletters@theinstitutes.org.
To get a quote, contact us.

Get Help With Insurance, Inc.

223 S. Water Street, Suite B

Henderson, NV 89015

help@gethelpwithinsurance.net

https://gethelpwithinsurance.net

(702) 541-0882, office

(888) 258-0208, fax

Is investing in Business insurance worth it?

It’s often said that insurance is the one thing you buy, hoping that you’ll never need it. It’s true that no one wants to have to file an insurance claim, but when the unexpected happens, you’ll be glad you have the coverage you need.  

Here’s an in-depth look at the value of business insurance.

How much does business insurance cost?

To determine the value of a business insurance policy, start with the cost.

The cost of business insurance depends on several variables. There are different kinds of business insurance, and they are all priced differently. You may need one or more types of insurance, depending on the type of business you have and the services you provide.  Plus, your coverage will depend on things like the size of your business (payroll and/or revenue), the type of business you are in, the location of your business, among other things.

? The best way to find out how much insurance will cost for your business is to get a quote. That will tell you exactly how much it will cost to protect the business you’ve worked so hard to build., How do you know what kind of business insurance you need?

Most businesses need general liability insurance to cover claims by someone else that you damaged their property or caused a bodily injury. If you provide professional advice, you should also have professional liability insurance, which can cover your costs if you’re sued for negligence or faulty workmanship. If you use computers in your business, consider cyber security insurance to protect your business from a data breach or ransomware attack. And if you have employees, you may be required to have workers compensation insurance.

It’s important to get the right coverage to protect your business, but you also don’t want to buy more insurance than you need. If you’re unsure what type of insurance you need, you can find out in 20 seconds here.

An event planner learns the value of business insurance

? Here’s an example that shows the benefit a business may get in exchange for the amount they pay for insurance.

An event planner is hired to plan a large fundraiser for a non-profit organization. This event is typically responsible for raising the majority of the non-profit’s revenue for the year. The event planner sends out the invitations with the wrong date. The error is discovered a few days before the event, and the planner sends out email corrections, but many of the prospective donors are unable to make the new date, and the event falls far short of its fundraising goals. The non-profit sues the planner for the error, estimating that they lost $250,000 in donations.

The event planner now has to go to court or mediation sessions, taking time away from work to do so. They have to hire an attorney to defend themselves, and they may have to pay a settlement or judgment. These costs could total $300,000 or more, which would all come out of the event planner’s pocket.

If, however, the event planner had the foresight to purchase professional liability insurance and general liability insurance, they might have paid around $750 per year, depending on the size of their business. In this example, their professional liability insurance policy could cover their defense costs, the settlement or judgment, and even the amount of income they lost by not being able to work while they were busy with the trial or mediation. The event planner would only have to pay their deductible, which, in this example, would have been $5,000.

If the event planner had their insurance policies for five years before this claim, they would have paid out about $3,750 in premiums, plus the $5,000 deductible, for a total of $8,750. If they did not have insurance in this scenario, the event planner would have had to pay all of the $300,000 out of their own pocket, which could have put them out of business.

Another benefit of business insurance

Your business insurance can provide another benefit to you, even if you never have a claim. A business insurance policy can help you get more business. Here’s how.

More and more companies are requiring that their vendors and subcontractors have insurance so that if something goes wrong, they’re not left holding the bag. When you purchase business insurance from Hiscox, you’ll get a certificate of insurance, or COI, that shows potential customers that you’re insured and ready to work. Having your insurance in place before you bid on or apply for a job can help you get your bid in faster than the competition.

It can be tempting to try to cut corners with the cost of business insurance. But if you look at the numbers, you can see that the benefits far outweigh the costs. Get a quote for this valuable protection for your business today.

Get Help With Insurance, Inc.

223 S. Water Street, Suite B

Henderson, NV 89015

help@gethelpwithinsurance.net

https://gethelpwithinsurance.net

(702) 541-0882, office

(888) 258-0208, fax

from Hiscox Insurance Company

What Can You Do To Manage Your Business’ Reputational Risk?

by Stephanie Pennington, Director—Marketing & Sales Excellence, Main Street America Insurance •

It’s no secret that consumers want to spend their money with businesses they can trust. For that reason, your company’s reputation can be a huge factor in its success. In fact, a study published by O’Dwyer PR shows that 63% of a company’s market value is based on reputation.

When things are going well, your business’ reputation can lead to:

  • Greater opportunities
  • Increased profits
  • Interest from stronger, more qualified job candidates

However, small businesses face a number of reputational risks every day that can negatively impact day-to-day operations. That’s where your commercial insurance policies come in. Reputation insurance is a small but important part of your commercial insurance coverage. It can help protect your business from serious, long-term losses in the event of a crisis.

Reputational Risk Insurance

Business reputation insurance is a set of additional coverages that can be added on to your Business Owners Policy to boost your coverage and protect your business. These coverages include:

Business Owners Liability Insurance

Liability insurance is a basic coverage included in any commercial insurance policy. In most cases, liability insurance protects your business from bodily injury, personal injury, and property damage claims. But it also protects against reputational risks like lawsuits brought against your company for libel, slander, and advertising injury.

Cyber Insurance Coverage

In this day and age, cyber insurance is vital coverage for any business. In the event of a data breach or other cybersecurity threat, your cyber policy offers helpful resources to:

  • Minimize reputational fallout
  • Protect your customers’ sensitive data
  • Defend you in the event of a lawsuit

Crisis Management Insurance

Crisis insurance covers public relations services for businesses after a reputation crisis, such as a data breach or scandal. Once on board, the PR team can work to get ahead of the crisis, reducing its impact and protecting your business’ reputation.

Reputation Insurance

In some cases, businesses will even purchase specific coverage called reputation insurance. These policies protect against things like lost revenue in the aftermath of an incident. Insurance companies often reserve reputation insurance policies for large companies because they are difficult to underwrite and very expensive.

Common Business Reputation Risks

Most often, reputational harm comes from four types of risk:

Company Actions

These reputational risks are the direct result of your business’ actions and decisions, including:

  • Refusing to comply with state, local, and federal regulations
  • Bad business practices that result in security breaches or threats to your employee and customer data
  • Lawsuits, layoffs, bad working conditions, and other public scandals
  • Consistently providing poor quality products and customer service

Representative Actions

Your company representatives are those people who are directly connected to your business, like employees. These risks are often caused by engaging in bad or unethical business practices, like:

  • Employing leaders who have negative reputations or engage in unethical behavior
  • Employee misconduct scandals
  • Employees who represent your brand negatively or post negatively about your business online

Partner Actions

Your partners are those businesses that provide support and supplies to your company. It may not seem like the company responsible for your office supplies could risk your own business. But partners can create a number of reputational issues including:

  • Engaging in misconduct that causes a public scandal
  • Representing your business negatively to potential partners and customers
  • Experiencing interruptions that negatively affect your business, like software outages

External Actions

External actors are most often customers and former employees. This risk category can be especially tricky given their close proximity to your business and the potential for negative experiences. The risks brought by external actions include:

  • Negative online reviews or social media posts
  • Negative press coverage of your business
  • Cyberattacks and data breach

Assessing Your Reputational Risk

Reputational risk insurance is an important coverage for any small business to have. But we understand that it is an optional protection not every business owner will choose. When deciding if reputation insurance is right for your business, there are a few things to consider. For example:

  • Do you handle significant sensitive information for your employees or customers?
  • What is your company’s cyber risk and have you ever had a data breach before? For this, keep in mind that cyber threats aren’t just for large corporations. An increasing number of data breaches affect small businesses every year.
  • How many risks does your company face in its day-to-day operation? For example: customers, employees, social presence, media scrutiny, etc.

Risk Management

The good news is you can easily reduce your business’ reputational risk by being proactive. Here are a few ways you can protect your company reputation:

Frequently assess your risk — as your business grows and things change, take time to review your reputational risk and make any necessary changes to your operations.

Train your staff — ensure every member of your team knows how to operate ethically, protect your customers’ data, and provide high quality service every time.

Protect yourself and your company— invest in the right insurance coverages to protect your business, yourself, and your staff from the unexpected risks that come with doing business.

Talk to an independent agent today to evaluate your business’ reputational risk.

Does Business Insurance Cover Spoiled Food?

by Jaime Wagoner , Regional Sales Director, Main Street America Insurance •

A business owners insurance policy is vital coverage for any small business owner to have. It can protect you, your business and your staff in the event of unexpected losses like property damage, injuries and even lawsuits.

According to data from the National Institutes of Health, a single incident of food-borne illness can cost restaurants upwards of $2 million in damages, legal fees and more. Fortunately, having food contamination insurance coverage can protect your business from devastating out of pocket costs.

What is Food Contamination Coverage?

As you can probably guess, food contamination coverage is a type of business coverage that helps restaurants and other food-based businesses:

  • Replace spoiled and contaminated food
  • Pay for required equipment cleaning
  • Recover lost income from business closure, and more

This includes perishable beverages, meat, dairy, produce and any other item that needs to be properly stored and cooked to maintain food safety. Because food that isn’t properly stored can lead to food-borne illness, it’s important that you throw any potentially spoiled food away.

Is Food Spoilage Coverage Included in my Policy?

Yes and no. Food spoilage coverage is not automatically included in a standard business owners policy. However, it is a simple add-on that you can have written into your business insurance policy for a small added cost.

An independent insurance agent can help you review your current policies and decide if food spoilage insurance is right for your business.

Common Causes of Food Contamination

Most often, covered losses from food spoilage come from power outages, equipment failure, and mishandling of perishable items.

Power Outages

Whether a storm knocks out power lines or an incident beyond your control damages your electrical wiring, a prolonged power outage can mean bad news for your business. If your food inventory is left too long without electricity or a backup generator, it can leave you vulnerable to food spoilage and contamination.

When this happens, the best thing you can do is operate with the assumption that your food cannot be salvaged. Getting reimbursement for food loss in power outages is easier than paying to manage an outbreak of food borne illness if you serve bad items.

Equipment Breakdown

Imagine the feeling of opening your business one morning to find that your walk-in freezer broke down overnight and all your food inventory is spoiled. It can happen to any food business. Fortunately, with the right coverage your insurance will pay to help you replace any lost inventory and get back to business.

Mishandling or Improper Storage

In some cases, food can be delivered to your restaurant contaminated with bacteria like E. coli or salmonella. Unless a recall is issued in time, you could accidentally cook and serve the spoiled food to customers, resulting in an outbreak of food-borne illness.

When this happens, your insurance policy will help pay to replace the food, clean your equipment, and protect your business from medical and legal expenses.

Filing a Food Spoilage Insurance Claim

Filing an insurance claim for food spoilage is simple! Just work with your agent to report the loss, and be ready to provide any necessary information like:

  • How the loss happened
  • How much food was lost
  • Purchase information for the spoiled items
  • Service policies on any affected equipment and dates they were last serviced

Keep in mind that for equipment coverage, insurance companies may require that you have a service policy in place and keep a regular maintenance schedule to ensure the policy will pay out.

Talk to an independent agent to learn more about Main Street America Insurance’s business insurance coverage.

Commercial Property Insurance – Why do you need It?

by Marcus Haynes, AVP, Regional Sales, Main Street America Insurance •

Commercial property coverage, also called business property insurance, is an important part of your small business coverage. It protects you from many of the risks that come with owning or renting a space for your company.

In many cases, landlords and mortgage lenders require commercial property insurance coverage. However, investing in a policy is a great choice either way. That way you can enjoy the peace of mind that comes with knowing your business is safe.

What is Covered Under Commercial Property Insurance?

A commercial property insurance policy protects your business from physical losses including:

Owned and Rented Buildings

Whether you’re using a storefront or an office, your commercial property coverage protects the building itself from fire, burglary, lightning, wind and more.

Furniture and Other Items

Many of the items inside your business, such as desks, chairs, lighting fixtures, and more, also have protection.

Supplies and Equipment

Your commercial property insurance policy also protects office supplies and equipment. This includes things like computers, registers, or anything else you need to do business.

Inventory

This is especially important for retail stores and similar businesses. In the event of a loss, your policy protects your business’ product inventory.

Coverage Examples

Now you’ve got a clearer idea of just how important business property insurance is for small businesses like yours.

Let’s look at a few examples of commercial property insurance in action:

Example 1

Imagine you have an overnight electrical fire in a clothing store. The fire damages portions of the building’s structure and destroys a lot of the merchandise you had in the stock room. Commercial property insurance will help repair the shop’s structure and replace that inventory. Your policy protects you from out-of-pocket expenses that could seriously hurt your business.

Example 2

Sally owns a doughnut shop in a popular downtown location. One night, a burglar breaks into Sally’s shop. The burglar damages the door frame on his way in and steals cash from the register. He then destroys a display case before leaving.

Because Sally has business property coverage, she can be back up and running in no time. Her policy will pay to repair the door, replace the display case, and even replace the stolen cash (subject to policy limits).

Factors to Consider with Business Property Insurance

Rising reports of natural disasters have had a significant impact on the insurance industry. In fact, experts suggest that the number of natural disasters is continuing to rise. And with it, the cost of many insurance policies.

Policy holders are feeling the heat, from homeowners insurance to commercial property coverage. Here are a few things to keep in mind when choosing a space for your business or searching for coverage:

The property’s location is an important factor that could mean you pay more or have limited coverage. This applies to buildings in areas at risk of wildfires, hurricanes and other severe weather.

Flood zone risk – if your business is in a high-risk location, it could affect your rates. Not to mention, you’d need to consider adding flood insurance to your coverage.

Your commercial policy does not include flood insurance. It’s only available through FEMA’s National Flood Insurance Program, but it can be a real lifesaver after a storm.

Building materials are another consideration, as they may increase or decrease your building’s fire risk. As you may have guessed, those that use fire-resistant materials are the better choice.

What you use your property for matters as well. Some businesses like restaurants are a higher risk to insure. However, insurance companies are likely to consider an office building as low risk.

Proactive protection is one of the simplest (and most important) things to consider. Being close to a fire station, having a fire suppression system, and a good security system can make a big impact.

Do I Need Commercial Property Insurance Coverage?

The simple answer is yes. Your building’s landlord or mortgage lender will often require proof of coverage before you can open your business. This includes coverages like general liability insurance and commercial property insurance.

The good news is Business Owners Policies often automatically include commercial property coverage. This makes it an easy policy to add to your portfolio.

Every business (and every location) comes with its own risk. For that reason, some businesses will be a better candidate for commercial property insurance. These include businesses that:

  • Own or rent a physical storefront/office
  • Are at risk of lawsuits as a result of day-to-day operation
  • Invite customers, clients or other visitors to the property
  • Want to reduce their risk and enjoy greater peace of mind

Common Questions About Commercial Property Insurance

Do I need commercial property insurance for a home business?

Home business owners don’t need to purchase a commercial policy because they aren’t renting or buying a space. However, it’s a good idea to contact an insurance agent to discuss your specific coverage needs.

Are there any policy exclusions?

Yes. Business property insurance does not cover:

  • Flood damage, for that you’ll need FEMA flood insurance
  • Business vehicles, you would need a commercial auto policy
  • Equipment breakdown. Though you can often add that as an extension coverage
  • Intentional or illegal acts

How can I lower my premiums?

Get proactive! Here are a few ideas for reducing your business’ risk:

  • Install smoke alarms and other fire suppression devices
  • Install a quality security system
  • Inspect and maintain your HVAC, plumbing and electrical systems
  • Train your employees on proper operations and safety precautions

Talk to an independent agent to learn more about commercial coverage with Main Street America Insurance.

Protecting Your Business: Understanding ERISA Bond Coverage

by Richelle Smith, Director, Bonds Small Business, Main Street America Insurance •

As a business owner, it’s important to understand the insurance requirements that apply to your company as well as the various types of bonds your business may need.

One specific requirement is ERISA bond coverage, which is a type of insurance that protects employee benefit plans from fraud or dishonesty. If your company provides its employees with a pension or 401(k) plan, the IRS will require you have an ERISA Bond.

In this simple guide, we’ll delve into the fundamentals of ERISA bond coverage and why it’s important for your business.

What is ERISA Bond Coverage?

ERISA stands for the Employee Retirement Income Security Act, which is a federal law that sets standards for private employee benefit plans. This includes retirement and pension plans, health insurance plans, and other types of employee benefits. ERISA bond coverage is a kind of insurance that is necessary by law for all employee benefit plans under ERISA. It protects the plan from losses caused by fraud or dishonesty on the part of plan administrators.

Who Needs ERISA Bond Coverage?

  • ERISA bond coverage is mandatory for all employee benefit plans under the ERISA act.
  • This requirement applies to plans sponsored by private employers, government entities, and churches.
  • Anyone who is responsible for managing the funds or assets of an employee benefit plan must have a bond, unless they meet the criteria for exemption under ERISA.
  • The only exceptions are for plans that are fully funded by insurance contracts or solely funded by the employer.

What Does ERISA Insurance Coverage Protect Against?

ERISA bond coverage protects against losses caused by fraud or dishonesty on the part of plan officials or fiduciaries. Examples include:

  • Theft, embezzlement, larceny and forgery
  • Wrongful abstraction, wrongful conversion, willful misapplication, and other illegal acts
  • Errors or omissions

How Much Coverage is Required?

The amount of ERISA bond coverage required depends on the size of the plan. For plans with fewer than 100 participants, the minimum coverage required is $1,000. For plans with 100 or more participants, the minimum coverage required is 10% of the plan’s assets, up to a maximum of $500,000. Additional coverage may be required if the plan includes nonqualifying assets.

By understanding ERISA bond coverage requirements and ensuring that your employee benefit plan is properly covered, you can protect your business and your employees from financial losses.

If you need help getting ERISA bond coverage find an agent near you today.

Cyber Insurance – Is the claim First-Party vs Third-Party

by Chris Cox, AVP, Regional Sales, Main Street America Insurance •

When someone mentions a data breach, what kind of company do you think of? Likely, large retailers, banks or other companies dealing with the data of thousands or millions of customers are the first that come to mind. The reality is that nearly half of small businesses also experience cyberattacks.

According to Astra Security, a study revealed that nearly 43% of cyber attacks are on small businesses, yet just 17% of small businesses have cyber insurance.

Cyber insurance coverage is one of the best ways to protect yourself, your business and your customers. With the right cyber insurance policy in place, you can recover faster and protect your business from significant losses.

Common Cyber Security Risks

First, let’s talk about some common cybersecurity risks your business may face. Most often, these threats include:

Malware –malicious software designed to invade your network and steal data, including ransomware, trojans, spyware and more.

Phishing – when a cyber criminal reaches out by phone or email in an attempt to get victims to share personal information, usernames or passwords.

Spoofing – a technique where criminals spoof your business domain or email addresses to fool customers into giving them personal data.

Supply Chain Attacks – when criminals target third-party vendors your business works with through either software or hardware supply chain attacks.

Preventing Cyber Attacks

There are steps you can take to get proactive and try to prevent cybersecurity threats on your business, including:

Have a Plan
Don’t wait for a breach to happen to prepare your business for a cyber event. Instead, come up with a plan for how your staff will actively work to prevent breaches, how you’ll respond internally in the event of a cyber attack and how you’ll work with your customers to recover.

Enhance Your Security
Restrict access to sensitive data to only those who need it. Secure your systems with unique credentials for each employee and change passwords often. Conduct regular training with your staff on cyber security and risk prevention.

Review and Improve
Regularly review your security protocols and make changes when necessary to protect your staff and business. And don’t forget to keep software up to date with the latest updates and patches to avoid leaving your systems vulnerable to attack.

Review Your Insurance Policy
Your team should regularly review all commercial insurance policies to ensure you have the coverage you need and that premiums are up to date. While this won’t technically prevent a loss, it will help you avoid headaches in the event of a data breach.

Like many other things, understanding cybersecurity threats is key to protecting your business. Now, let’s talk insurance.

What is First-Party Cyber Insurance?

Simply put, first-party cyber insurance directly protects your business. With first-party cyber coverage, your business is protected from damages caused by a cyberattack that occurs on your network or systems.

As hard as we try, there is no way to 100% prevent a data breach, so you need to be prepared. Because first-party cyber coverage directly protects your business, it is a vital insurance policy for any small business to have.

In most cases, coverage includes:

•    Rebuilding your network or replacing technology after an attack
•    Restoring any data destroyed after malicious or accidental breaches
•    Recovering data loss after a natural disaster or other accident
•    Legal and public relations help to restore your business’ reputation
•    Reimbursement of income lost while your systems are down
•    Reimbursement of ransom payments made to cyber criminals

First-party cyber insurance can protect you from most of the cybersecurity threats your business will face and can help you get back up and running with minimum loss.

What is Third-Party Cyber Insurance?

The term third-party refers to the clients, partners, and vendors your business works with every day. Knowing this, the biggest difference with third-party cyber insurance coverage is that it’s designed to protect your business from actions taken by third parties after a breach.

Essentially, this coverage protects you by:

  • Paying legal fees, court costs and damages if a third party sues your business
  • Offering legal and public relations help to restore your business’ reputation
  • Paying judgments if your business is found liable for a data breach
  • Helping your business navigate and pay settlements outside of court

Data from Security Ventures show 60% of small companies go out of business within six months of a cyberattack. While this coverage won’t help you recover lost data or get your business up and running, it can save you from spending hundreds of thousands of dollars in unexpected legal fees after an incident.

What Isn’t Covered by Cyber Insurance?

As with any other insurance, first-party and third-party policies have exceptions and exclusions. No cyber insurance policy will protect you or your business from:

  • Intentional acts, like fraud or criminal conduct
  • Prior acts, meaning claims you knew about before your coverage began
  • Legal fees resulting from a criminal trial or grand jury proceedings
  • Business interruption if your systems are under the control of a third party

Choosing the Right Coverage

Now that you know what both first-party and third-party cyber insurance are, how do you know which coverages you need?

First, you need to evaluate your business risks. Take a close look at all your company’s vulnerabilities and data collection habits, so you know what type of coverage you’ll need. Start by reviewing the following:

  • The type of data you collect and store, including all sales, personal, and banking information
  • How susceptible your business and network are to threats. Are there gaps in your security?
  • What local, state, and federal regulations your business needs to comply with
  • What steps both you and any third parties you work with are taking to prevent a breach
  • How many breaches or near-breaches your business and any third parties have experienced before

From there, an independent insurance agent can help you look over your current policy, evaluate your risk and determine which coverages (and what level of coverage) your business needs to be fully protected.

To learn more about cyber insurance and get coverage, find an independent agent today.

What Factors Impact Business Insurance Costs

by Richard Vaughn , Head of Sales, Main Street America Insurance •

As a business owner, you know insurance is a necessary expense. Understanding the costs associated with business insurance and the factors that influence your policy, is a key part of a sustainable business plan. Certain factors are related directly to the type of business you run, while others correlate to the economy and the ever-changing world around us.

What Drives Business Insurance Costs?

  • Type of Business: The type of business you operate is a primary factor that affects insurance. For example, a construction company may have higher insurance costs than a consulting firm due to the higher risk of property damage and injuries on construction sites.
  • Business Size: The size and scale of a business also influence insurance costs. Generally, the larger the business, the higher premiums will be.
  • Location: Where a business is located can also impact insurance costs. For example, a business located in an area prone to natural events like hurricanes or earthquakes will likely have higher insurance costs than one located in a low-risk area.
  • Industry Regulations: Certain industries have specific regulations that require businesses to carry certain types of insurance coverage. For example, healthcare businesses are required to have malpractice insurance in many states, and trucking companies must have commercial auto insurance.

Why Is Business Insurance Going Up?

Insurance rates change over time, even without any changes to your policy itself. Factors like inflation, changing weather patterns and labor costs all play a part. Let’s dive deeper into what may cause rate increases:

  • Weather-Related Events: According to the NOAA, in 2023 the United States experienced 28 weather and climate events costing at least 1 billion dollars. That marks the fourth year in a row with 18 or more separate billion-dollar disaster events, indicating this could be the new normal.
  • Technology: Businesses are increasingly vulnerable to cyber threats and data breaches. Anne Neuberger, Deputy National Security Advisor, recently shared information predicting the annual average cost of cybercrime will exceed $23 trillion by 2027. Additionally, a study by Astra Security revealed that nearly 43% of cyber-attacks are on small businesses, yet just 17% of small businesses have cyber insurance. These factors can impact premiums for business owners.
  • Cost of Materials: The rising cost of construction materials has a direct impact on premiums. It’s reported that the cost of materials like wood, plastics, composites, plaster, and thermal protection will hit average increases of 6.5% through 2025.
  • Construction Labor: Contractors are facing labor shortages, supply chain issues, and overall higher costs, leading to an increase in the cost of labor. Rebuilding after a claim may not just cost more, but also take longer while they wait on materials and available workers, which can increase the cost to pay a claim.
  • Economic Conditions: Fluctuations in the economy also influence insurance premiums. While inflation slowed in 2023, a recent report indicated that consumer goods prices rose 3.4% annually to close out the year.

Ways to Manage Business Insurance Costs

Like so many other things in business, it’s important to be proactive. Let’s explore some ways to manage commercial insurance costs.

  • Bundle Your Policies: Many insurance companies offer discounts for bundling multiple policies, such as business owners’ policy, liability, and workers’ compensation insurance. Bundling policies can also make it easier and more efficient to manage your insurance coverage and premiums.
  • Implement Risk Management Plans: Avoiding an insurance claim is one of the best ways to keep insurance costs down. By doing things like conducting regular safety training for employees, properly maintaining property and equipment, and having a disaster recovery plan in place, you can help prevent a loss.
  • Pay in Full: Many insurance providers offer paid in full discounts to policy holders who make a single payment rather than breaking their premiums down into monthly installments. In some cases, you may receive a discount for setting up auto pay rather than manually making payments each month.
  • Review Your Coverage Regularly: Business insurance needs may change over time, so it’s essential to review coverage regularly. As your business evolves, you may need to increase your coverage limits or add new types of coverage to adequately protect your business. Alternatively, if your business downsizes or changes its operations, you may be able to reduce your coverage and lower your premiums.

Be sure to review your coverage with a local insurance agent at least once a year to ensure you have the right coverage.

What is Advertising Injury For Small Businesses?

by Stephanie Pennington, Director—Marketing & Sales Excellence, Main Street America Insurance •

As a small business owner, you may have heard the term “advertising injury” in relation to business liability insurance. But what exactly does it mean, and why is it important for your business?

Understanding Advertising Injury

Advertising injury is a type of harm that can occur because of your business’s advertising activities. This can include things like copyright infringement, defamation, or false advertising. For example, if your business uses a slogan or logo that is like another company’s, you could be sued for trademark infringement. Or, if you make false claims about your product or service in your advertising, you could be sued for false advertising. In today’s digital age, where businesses are constantly promoting themselves through various channels, the risk of advertising injury is higher than ever.

Coverage Under Business Liability Insurance
Business liability insurance, also known as general liability insurance, is a type of insurance that protects businesses from financial losses due to lawsuits or claims made against them. This can include claims of bodily injury, property damage, and yes, advertising injury. Most business liability insurance policies include coverage for advertising injury, but it’s important to review your policy to ensure that this is the case. If not, you may need to purchase additional coverage or a separate advertising injury policy.

Why Your Small Businesses Need Legal Protection
Small businesses can be particularly vulnerable to advertising injury claims because they often don’t have the resources or legal expertise to defend themselves against a lawsuit. This can result in significant financial losses and damage to your company reputation. Having legal protection in the form of business liability insurance can provide small businesses with the necessary resources to defend themselves in court. This can include coverage for legal fees, settlements, and judgments.

Types of Advertising Injury

There are several types of advertising injury that small businesses should be aware of:

  • Copyright Infringement: Copyright infringement occurs when a business uses someone else’s copyrighted material without permission. This can include images, videos, music, or written content. For example: if a small business uses a photo from a stock image website without purchasing the proper license, they could be sued for copyright infringement.
  • Trademark Infringement: Trademark infringement occurs when a business uses a name, logo, or slogan that is similar to another company’s, causing confusion among consumers. This can also include using a trademarked term in your advertising without permission. For example, if a small business uses a slogan that is similar to a well-known brand’s, they could be sued for trademark infringement.
  • Defamation: Defamation occurs when a business makes false or damaging statements about another person or business. This can include libel (written statements) or slander (spoken statements). For example, if a small business makes false claims about a competitor’s product or service in their advertising, they could be sued for defamation.
  • False Advertising: False advertising occurs when a business makes false or misleading claims about their product or service. This can include exaggerating the benefits of a product or making false claims about its effectiveness. For example, if a small business claims that their product can cure a certain illness without any scientific evidence to back it up, they could be sued for false advertising.

Protecting Your Business Against Advertising Injury

As a small business owner, there are several steps you can take to protect your business against advertising injury claims. These include:

  • Review Your Advertising Materials: Before publishing any advertising materials, it’s important to review them carefully to ensure that they do not infringe on any copyrights or trademarks, and that they do not contain any false or misleading claims.
  • Purchase Business Liability Insurance: Business liability insurance can provide crucial legal protection for small businesses. It’s important to review your policy and make sure that it includes coverage for advertising injury.
  • Consult with a Legal Professional: If you’re unsure about the legality of your advertising materials, it’s always best to consult with a legal professional. They can review your materials and provide guidance on how to avoid potential legal issues.

Real-World Examples of Advertising Injury Claims

According to a recent CBS News piece, there were a record number of food litigation lawsuits filed from 2020 to 2023. Another article in Business Insider cites 18 different businesses that were charged with false advertising claims. These stories serve as a reminder for businesses to be careful about the claims they make in their advertising and to ensure any claims you make are backed by truth and evidence.

By taking the necessary precautions and having legal protection in place, small businesses can avoid financial losses and damage to their reputation, allowing them to focus on growing and succeeding in their industry. Talk to an insurance agent today to discuss the coverage options available for your business.