There are two risk exposures that few business owners can afford to overlook: property loss and liability loss. Property insurance generally covers your building, contents, and equipment in the event that physical property needs to be repaired or replaced due to perils such as fire, theft, wind, or certain types of water damage. Liability insurance helps protect you and your company from liability arising from day-to-day business operations. You should consider obtaining sufficient coverage for product liability and premises liability to help protect your business in the event someone is injured while using your products or visiting your facility. In addition, business owners in search of the most complete protection must also prepare for the possibilities of business interruption, disability, and the loss of key employees.

In assessing the risk exposures particular to your business, you should consider what can go wrong and how such events might affect the running of your business. Once you have established your potential vulnerabilities, consider which forms of insurance coverage best meet your needs.

Business Owners Policy: While property insurance and liability insurance can be secured separately, a business owners policy bundles both property and liability coverage in one package. This combined policy typically 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. In addition, coverage may also include protection against business interruption.

Business Interruption Insurance: While few business owners would dare think of leaving their buildings and contents uninsured, or their businesses unprotected from liability, many neglect to insure the purpose of their businesses—the earnings. Business interruption insurance helps maintain a regular flow of earnings after the business has been wholly or partially disabled by a disaster. In other words, coverage is designed to do for the business what the business would have done for itself had no loss occurred, including paying for the lost net profits of the business, plus any continuing expenses that may occur during "down time" caused by a peril covered by the policy.

Business Overhead Expense Insurance: While preparing for business interruption is important, so is preparing for the possibility that an accident or illness could interrupt your ability to conduct business. Could your firm survive if you were forced to stop working? Business overhead expense insurance can help sustain your business during a disability by paying expenses such as: salaries and benefits; rent, lease, or mortgage payments; property taxes; equipment costs; certain insurance premiums; maintenance costs; and utility bills. In general, benefits are: paid monthly after a predetermined waiting period; limited to a maximum amount; and restricted to a specified length of time (often from one to two years). Business overhead expense insurance does not, however, replace the need for your own personal disability income insurance, which protects your income, and may replace 45% to 75% of your pre-disability earnings. (For more information, please see related article on page 3.)

Key Employee Insurance: In addition to considering the potential for your own health crisis, have you thought about the consequences of suddenly losing a key employee to disability or death? Along with losing a valued member of your management team, you would also be losing the person’s skill, "know-how" and, perhaps, the important business relationships he or she had cultivated over the years. Key person insurance covers, or "indemnifies," a company against the loss of a valued team member’s skill and experience. The proceeds help provide funds to recruit, hire, and train a replacement; replace lost profits; and reassure lenders that funds will be available to help repay business loans.

Because businesses vary in nature, grow, and change, there is no standard insurance policy available to cover all contingencies. For a review of your coverage needs and your policy options please give us a call. We can help you ensure the future of your business.

If you spend time each day at a computer keyboard, you are probably familiar with one form of repetitive stress—carpal tunnel syndrome—that can result in pain and/or numbness in the wrist and fingers.

Repetitive stress injuries (also called cumulative trauma disorders—CTDs) can result from repeating movements many times or working in a prolonged awkward or cramped position, and can affect the hands, wrists, arms, back, neck, and shoulders.

CTD injuries are not new. In the 1800s, it was not uncommon for telegraph operators to suffer from "telegrapher’s finger," and workers in many other occupations (including meat processors, roofers, auto workers, textile workers, assemblers, and cashiers) have long been affected by repetitive motion stress.

Ironically, since writers, reporters, and editors—who now spend much of their time at computer keyboards—have joined the growing number of workers experiencing one form or another of repetitive stress, CTDs have received more attention in the media.

A Somewhat Cloudy Issue

Nevertheless, the widespread recognition of repetitive stress injuries has not brought complete clarity to the problem. If, as some suggest, CTDs develop over a period of time possibly going back many years, how much of CTDs is related to the aging process or to stress outside rather than inside the workplace? (Insurers are particularly interested in these questions, because the answers will determine which insurance mechanism—primary health, disability, or workers compensation—will be most affected.)

Regardless of where such injuries occur, and to what extent they are caused or aggravated by the workplace, employers are facing increased pressure from OSHA (Occupational Safety and Health Administration) to become proactive in the area of workplace injury prevention. The business community is justifiably concerned about how potential costs to control CTDs will, in fact, pay off in terms of higher employee productivity, fewer CTD claims, and lower insurance costs.

Redesigning the Workplace

In the face of these pressures and rising disability claims related to CTDs, many companies are looking to consulting firms specializing in ergonomics to help prevent CTDs and control risk exposure.

Ergonomics, also known as human factors engineering, is the study of how people interact with machines and their working environment. It examines the nature of the job and the body movements necessary to perform that job. The goal of studying these people-machine relationships is to maximize worker performance, comfort, and safety.

One of the key elements of grassroots programs in injury prevention has been the matching of employee capabilities to the demands of the job. Starting with a worksite analysis to identify risk factors, both the employee and the job may be "reengineered."

Redesigning a job may involve implementing changes to work stations, tools, or work requirements; reshaping employees may include providing education to increase awareness and physical fitness programs to enhance employee health. A less stressful work posture, more frequent rest breaks, and job rotation are the types of changes that may be implemented to help reduce CTDs.

OSHA emphasizes that occupational ergonomic problems are a significant safety and health concern in the workplace. The discovery of risks in the workplace, the ability to modify the work environment, and the training of the workforce will all play a role in reducing work-related injuries. If ergonomic reengineering of the workplace is successful, it should enhance employee productivity and help control injury-related costs.

You may be your business’s most valuable player (MVP), and proper measures should be taken in the event you suffer a disability. To qualify for Social Security disability benefits, you must be severely disabled and, even then, you will have to wait at least six months for payments to begin. Social Security disability was not intended to be an individual’s sole source of disability income, thus benefits are often less than what you might need to cover your regular living expenses.

Disability income insurance offers protection against an accident or health crisis that limits your ability to earn income. Depending on your income, the maximum coverage you can buy may replace 45% to 75% of your pre-disability earnings. The policy’s cost generally depends on such factors as the risk level of your occupation, your age, health, and the scope of coverage. Consider the following policy features:

• Definition of Disability. Carefully review the definition of disability in your policy. Some policies cover you if you are unable to work in the occupation in which you were employed or for which you were trained, or if you can no longer earn as much as you once did in that field. In contrast, other policies cover you only if you are unable to work in any occupation. This distinction can make a big difference if you become disabled.
  
• Residual Benefits or Partial Disability Coverage. Under certain specified circumstances, if you become disabled and are only able to earn a portion of your previous income, residual benefits or partial disability coverage pays a portion of your benefits.
  
• Guaranteed Renewable. With this feature, the insurer cannot refuse to renew your policy or change any terms, except for premium cost, as long as you continue to pay your premiums on time.
  
• Guaranteed Insurability. This provision allows you to increase your monthly benefit, even if you experience health changes that would otherwise prevent you from obtaining additional disability coverage.
  
• Cost-of-Living Adjustment (COLA). This feature helps protect your benefits against the effects of inflation during a long-term disability.
  

Also consider a business over-head expense (BOE) policy that can help cover lost profits and continuing fixed costs, such as salaries and ongoing business expenses, in the event you suffer a disability. In general, benefits are paid monthly after a predetermined waiting period, limited to a maximum amount, and restricted to a specified length of time (often from one to two years). A thorough disability plan that includes both disability income and business overhead expense insurance can help protect your livelihood and ensure your business stays up and running.