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Vol. 13 No.
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Home-based
businesses: insurance considerations
Business owners
with home-based companies face unique insurance considerations.
Your homeowners or renters policy is not
designed to protect your home-based business.
In
general, homeowners policies provide limited coverage (typically
around $2,500) for business equipment, which may be inadequate
for most high-end personal computers and printers. In addition,
liability coverage is unlikely if someone is injured on
your property during business hours. Also, income losses
due to business interruption do not come under the purview
of a homeowners policy. There are three basic ways you can
help ensure adequate coverage for your home-based business:
1) obtain endorsements,
or added coverage, to your existing homeowners or renters
policy;
2) buy an in-home
business policy that specializes in business conducted
from home; or
3) buy a business
owners policy (BOP).
Homeowners
Policy Endorsements
Depending on
the type of business you run, you may be able to
increase your homeowners policy limits for business equipment
and general liability for a relatively small, additional
premium. For example, if a courier slips on your icy front
walk, a liability endorsement may protect you from
responsibility for paying damages if legal action were taken
against you. The type of business you operate may affect
your insurability for liability protection using an endorsement.
In-Home
Business Policies
For more comprehensive
coverage, consider an in-home business policy. You can select
higher limits for business property, as well as business
interruption coverage that will provide for lost income
and ongoing expenses if you are unable to operate your business
because of damage to your home. This is in addition to several
other business-related coverage features that are typically
unavailable in a homeowners policy. For example, coverage
may protect against the loss of important documents and
records, accounts receivable, and off-site business property
or equipment. Furthermore, the liability concerns for a
home-based business owner are broader than the scope of
a typical homeowners policy. An in-home business policy
generally offers liability coverage for accidents that occur
on the premises, as well as for legal action taken against
you as a result of your business services or products.
Business
Owners Policies (BOPs)
Lastly, for
business owners with more involved operations, including
manufacturing and other operations outside the workplace,
a BOP might be a better fit. BOPs generally include: coverage
for a building and its contents; business interruption coverage
in the event a catastrophe, such as a fire, forces operations
to cease; and liability protection for all your business
operations.
Typically, a
BOP covers business property that is exposed to risks such
as fire, smoke, hail, wind, theft, vandalism, and some forms
of water damage (for instance, from leaking roofs or broken
pipes). Insurable property includes, but is not limited
to, buildings, office furniture and equipment, machinery,
inventory, and signs.
While you can
increase your homeowners coverage to meet some of your business
needs, insurance solely for your business does not replace
coverage for your home. Give us a call. We can help you
assess all of your needs business and personal
to determine the best ways to customize your insurance
protection
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| Protect
your business from cyber-crime Security
breaches on the information superhighway seem to be an increasingly
serious problem for corporate America. Hackers, disgruntled
employees, computer viruses, and fraud all wreak havoc that
could run as high as several hundred billion dollars annually.
Such losses associated with computer break-ins could threaten
the existence of any business.
Savvy
Detective Work
Perhaps computer
crime is worsening because the workplace is increasingly dependent
on information technology, such as shared networks and the
Internet.
To protect the
workplace from these unconventional and extremely costly property
risks, business owners should consider implementing their
own cyberspace policing system.
Here are a few
elements to help prevent computer crime:
•
Establish and implement security procedures. Developing
a policy at the highest levels of the company will help transform
information technology concerns into a "high-profile"
issue. Maintaining tight security around mainframe computers
and local area network file servers, and installing door contacts,
connected to an alarm system, will help to prevent any unauthorized
removal of computer diskettes. It will also aid in the prevention
of computer breaches and fraud.
•
Equip computers with passwords and anti-virus software.
Passwords help deter hackers from cracking codes and may be
one of the easiest methods to help prevent computer break-ins.
Efficient use of this technique may include choosing unusual
passwords and frequently changing them to keep potential hackers
guessing. Additionally, viruses lurking in cyberspace may
infiltrate computer systems and render them useless. Anti-virus
programs provide protection against these attacks, and businesses
may want to consider updating this software periodically to
combat the arrival of any new viruses.
•
Install firewalls and data encryption technology. Firewalls
block unwelcome cybersurfers from direct access to company
computers and data. They are also used to restrict employees'
personal use of the Internet during office hours. These security
devices inspect every approaching Internet connection and
use a predetermined set of rules to determine whether to allow
that connection. Likewise, data encryption, in which information
is transmitted encoded, requires a particular "key"
to unscramble the data on the receiving end. An encryption
device will help prevent unauthorized individuals from obtaining
and misusing sensitive information.
•
Provide advanced protection with detection and monitoring
devices. These additional security features raise red
flags or warning signals to companies, because they identify
repeated attempts by unauthorized individuals and hackers
to break into a system.
Plan
of Attack
Prudence may be
the driving force behind the success of any security program.
Along with common sense procedures, businesses should consider
implementing software and other security measures. They should
also assess how sensitive their information is in order to
structure a system with the appropriate level of security.
Businesses may also investigate Computer Fraud Insurance to
protect against losses their security measures couldn't prevent.
Please give us a call. We can help you evaluate your
needs and create affordable solutions. |
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Did
You Know
From the
dawn of the Industrial Age, worker safety has been
an everpresent issue in the workplace. With conditions
much improved since then, employers may be pleased
to learn that according to the National Safety Council
(NSC, 2004), unintentional workplace fatalities (not
including homicides and suicides)from the years
1912-2003have decreased 93%. This statistic
is a drastic improvement considering the current workforce
is four times larger and produces nine times the goods
and services than the workforce over 90 years
ago.
If you're
nearing retirement age, but aren't ready to stop working
just yet, have you ever thought about starting your
own business? If so, you might be interested in a
report by USA Today (2005). It states that over 5.5
million workers over age 50 run their own start-up
businesses. Also, over 40% of these entrepreneurs
are considered part-time workers, whereas only 26%
of overall employees are part-time.
If your
business is home-based, is it properly insured? According
to the Insurance Information Institute (III, 2004)
and a new survey commissioned by the Independent Insurance
Agents & Brokers of America (IIABA), over one-third
of the 11 million home-based businesses in the U.S.
today do not have any coverage. For more information
on insuring your home-based business, check out the
article on page 1 and give us a call. We're happy
to answer your coverage questions.
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For
Your Information
Youth
Rules
Today's
youth may be a great resource to your small business.
But are you aware of the rules
governing your younger employees? The Department of
Labor's youth website, www.youthrules.dol.gov, can
be a helpful resource for determining the hours and
capacity in which teens can work. With information
for teens, parents, educators, and employers, the
site offers tips on how to protect teen employees
from injuries and illnesses in the workplace.
The relatively
new Health Savings Accounts (HSAs) allow employees
to save money tax free for qualified medical expenses.
If you are interested in the benefits of these accounts
for your employees, then you may want to check out
the Small Business Administration (SBA) website, www.sba.gov.
Here you'll find plenty of comprehensive information
about HSAs, covered by high deductible health plans
(HDHPs), including a list of frequently asked questions
and answers.
When you
think of the United States Postal Service (USPS) you
may think of it as only a way to send mail. However,
the USPS can be a useful tool for a small business
owner eager to grow his or her business. Their website,
www.usps.com, offers business owners advice such as
"3 Facts About the Mail and Growing Your Business"and
how to "Turn a Good Customer into a Loyal Customer
in 7 Steps."
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| The
FMLA and your business Attracting
and retaining top employees is a key issue for many companies
in today's marketplace. With cost control a high priority
for employers nationwide, businesses can benefit from understanding
the various noncompensation-related factors that can help
contribute to greater workplace satisfaction.
Workplace
Initiatives
One way for companies
to attract and retain high quality workers is to broaden their
family and medical leave policies. From an employee's
perspective, the guarantee of a job at the end of such a leave
is an extremely desirable aspect of an overall benefits package.
Employers can benefit too, since low employee turnover
decreases training costs and results in fewer disruptions
to continuity. Thus, many companies recognize that it makes
good business sense to adopt a family-friendly approach, because
the benefits outweighor at least offsetthe costs
that may otherwise be incurred.
Under the Family
and Medical Leave Act (FMLA) of 1993, businesses with more
than 50 employees are required to provide eligible employees
with up to 12 weeks of unpaid leave for childbirth, adoption,
or the serious illness of an employee or immediate family
member. However, small businessesto which the FMLA does
not applyare not required to do so, but may voluntarily
choose to enact benevolent leave policies.
According to a
U.S. Department of Labor (DOL) report, Balancing the Needs
of Families and Employers: Family and Medical Leave Surveys
2000 Update, more than 35 million employees had taken
leave under the FMLA as of the year 2000. The DOL reported
that 78.7% of employees who took leave under the FMLA felt
that their time off had a positive effect on their ability
to care for family members, and 93.5% felt their leave enabled
them to more easily comply with instructions from their doctors.
In addition, 83.7% felt their leave sped up their recovery
(DOL, 2000).
In terms of business
productivity, profitability, and growth, employers subject
to FMLA regulations generally felt the legislation had no
noticeable impact on their operations. To cover for an employee's
absence, 98.3% of surveyed establishments temporarily assigned
work to other employees. Furthermore, of all companies surveyed
(including those not subject to the FMLA), approximately one
out of five offer leave beyond the 12 weeks guaranteed by
the FMLA (DOL, 2000).
Coverage
Concerns
While many employers
may theoretically favor the idea of family and medical
leave, it is not surprising that they may be concerned about
how to provide adequate work coverage during an extended leave.
Assigning the work to other employees or outsourcing certain
functions may be practical in some cases, but not in others.
Fortunately, the
rise in the number of qualified individuals working for temporary
help agencies offers a contemporary solution. In the past,
"temps" may have been viewed as less qualified workers.
However, today, it's rapidly becoming clear that more and
more individuals are choosing temping as an alternative work
style. Also, today's temps are available for all types and
levels of positions. Whether a company needs a short-term
secretary, graphic designer, engineer, computer programmer,
or even a chief financial officer, temporary agencies now
exist to fill the bill.
It
Makes Good Business Sense
A family-friendly
work environment can offer benefits for all parties in a workplace.
Workers who have chosen temping as an alternative work style
benefit from the recognition that they can step in and make
valuable short-term contributions. Employees benefit when
their employers recognize and support their need to care for
newborns and aging parents, and when they provide job security
during medical leaves. Finally, small businesses gain by reducing
turnover and retaining skilled employees.
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Copyright
© 2005 Liberty Publishing, Inc. All rights reserved.
The content of this newsletter
is taken from sources that are believed to be reliable. However,
this newsletter
is not intended as a substitute for legal, financial, or professional
counsel.
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