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
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.
Did You Know Safety Improvements 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 1912-2003—have 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. Aging Entrepreneurs 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. Cover Your Home Bases 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. |
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. HSAs and the SBA 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. USPS—More Than Just Mail 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." |
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 outweigh—or at least offset—the 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 businesses—to which the FMLA does not apply—are 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.
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.