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
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.
“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.” &
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
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 is happening to Commercial Auto Insurance?
5 Forces Driving Commercial Auto Insurance Costs
by Travelers Insurance
Over the past decade, auto insurance rates have increased steadily; well exceeding the rate of inflation over the same period. But what’s driving this upward trend? Explore factors that have significantly impacted the rates for commercial auto.
1. Bodily Injury Loss Costs
In the five-year period from 2018 to 2022, auto severity has increased a substantial 40% even as frequency has declined.1 Causes include an increase in deadly accidents, rising verdicts in legal cases and medical cost inflation. In fact, the latter is expected to grow 7% in 2024, up from 6.0% in 2023 and 5.5% in 2022.2
2. Attorney Involvement
With attorneys actively pursuing auto accident business, more claimants now have legal representation. These claims see higher rates of expenditures for medical procedures and treatment.3 A complete fleet management program can help reduce your exposure.
3. Distractions and Impairment
Distractions behind the wheel, from vehicle infotainment systems and mobile devices to driving under the influence, can lead to significant risks: 30% of companies surveyed reported that they have employees who have been involved in crashes due to mobile phone distraction, and deaths due to preventable crashes are up 18% versus pre-pandemic levels.4
4. Inexperienced Drivers
Resignations and retirements are leading to a shortage of commercial operators, increasing the chance that less experienced replacement drivers are behind the wheel. Operators in new vehicles and covering new routes can also contribute to an increase in accident rates.
5. Vehicle Repair and Replacement Costs
Autos have become more expensive to insure and repair. Newer vehicles are outfitted with advanced materials and technology designed to make driving more comfortable and safer. When these vehicles are involved in an accident, costs can be high, and labor shortages and inflation have only exacerbated the issue. In fact, motor vehicle parts and equipment costs have increased almost 24% since September 2019.5 Meanwhile, used car prices are still up almost 47.9% in 2023 compared to the average from 2015 to 2019, despite recent softening.6 This directly impacts the cost of claims in the event of a total loss. Finally, rising auto thefts are further contributing to increased claim costs.
Sources
1LexisNexis Risk Solutions Auto Insurance Trends Report
2Health Research Institute
3Attorney Involvement Keeps Claims Soaring (June 2023, The Institutes)
4Travelers 2023 Risk Index – Distracted Driving
5Auto Insurance: The Uncertain Road Ahead (2023, APCIA)
6Edmunds Used Vehicle Report (Q3 2023)
If you need a Commercial Auto or Commercial Trucking insurance quote, please contact us.
Get Help With Insurance, Inc.
223 S. Water Street, Suite B
Henderson, NV 89015
(888) 258-0208, fax
A View Into the Workers’ Compensation Market
Workers’ Compensation insurance continues to be a standout in the insurance world, having experienced average state-approved advisory rate reductions for the last decade. Whether the market will change moving forward remains to be seen, as wage growth, medical inflation and other factors all impact the Workers’ Compensation market.
Wage Growth Is Driving Payroll Growth
Wage growth continues to drive payroll growth in Workers’ Compensation. According to a report by the National Council on Compensation Insurance (NCCI), while wage growth has moderated from its peak in 2022, it remains solidly above pre-pandemic growth rates and is positioned to stay elevated in 2024.1 Several factors are behind the continued wage growth, according to the NCCI, including union activity and newly negotiated contracts, higher minimum wages and inflation.
2022 saw a big spike in hiring and wages post-COVID, as many industries experienced labor shortages in the aftermath of the pandemic. However, hiring leveled off in 2023, with layoffs in specific sectors —such as tech — causing payroll growth to dip.
According to the Department of Labor, employment rose by 3.1 million in 2023, significantly below the 7.3 million jobs added in 2021 in the wake of COVID and the 4.8 million added in 2022.2 Still, job growth for 2023 was higher than the average of the previous five years (2.3 million) before the pandemic. Initial job estimates for 2023 were 2.7 million, later revised to 3.1 million.
Moving ahead, high inflation and minimum wage increases across numerous states continue to paint a healthy picture for payroll growth in 2024. According to the Economic Policy Institute (EPI), on January 1, 2024, 22 states were set to increase their minimum wages, raising pay for nearly 10 million workers.3 The EPI projects that state minimum wage increases will result in an additional $6.95 billion in worker income.
Furthermore, on January 1, 2024, 38 cities and counties raised their minimum wages above their state’s wage floors, increasing the number of workers likely to earn more. For example:
- In Illinois, workers saw an increase in the minimum wage from $13 to $14 per hour beginning in January, with another increase expected in 2025.
- In California, the minimum wage for fast food workers rose to $20 per hour effective April 1. That’s $4 higher than the overall state minimum wage of $16 that went into effect January 1.
- As of June 2024, healthcare workers in California earn a minimum of $18, $21 or $23 an hour, depending on the type of facility that employs them and where they work.
Meanwhile, California workers in other industries are asking for an increase in wages. In Los Angeles, for example, a proposed ordinance would institute a $25 minimum wage for workers in the tourism industry before the 2026 World Cup and the 2028 Olympics, which would rise to $30 an hour by 2028.4
The Challenges of Medical Inflation
Medical inflation continues to challenge insurers and claim costs, which is also underscored in NCCI’s annual survey of carriers. As medical costs rise, carriers are worried about frequency, severity and large claims.
Over the short term, the market will weather the higher medical costs; However, along with wage legislation and general inflation, which increase indemnity payments, the long-term impact is concerning.
Workers’ Comp Pricing
Of course, accounts with significant wage growth see premiums rise. In addition, pricing is tightening in certain states. California, New York and New Jersey, for example, are adjusting rates only slightly downward due to higher claim costs driven by litigation and medical inflation. However, many other states have issued double-digit rate reductions this year, including Florida and Arizona.
In addition, some carriers are exiting certain classes where rate adequacy is insufficient, and profitability isn’t where it should be. The good news is that the market has a lot of capacity to place these accounts when carriers’ appetites change.
If you need workers compensation for your business, contact Bonnie Grant at (702) 541-0882. Here is my contact info:
Get Help With Insurance, Inc.
223 S. Water Street, Suite B, Henderson, NV 89015
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.