June 2013

Fraud and embezzlement in the workplace has become an epidemic, costing American businesses an estimated $400 billion a year (6% of total revenues), according to The Association of Certified Fraud Examiners. Smaller firms are particularly vulnerable, because they’re less able than their larger counterparts to afford extensive safeguard or to absorb the losses. What’s more, one in four workers who rip off their employers have been with the company more than ten years.

Employee Dishonesty insurance can protect your business from financial loss due to the fraudulent activities of an employee or group of employees. This coverage is also called Crime Coverage, Employee Dishonesty Bond, Fidelity Bond, or Crime Fidelity insurance.

The policy applies to acts by all current and former employees, as well as partners, trustees, and directors, together with volunteers, seasonal employees, and temporary workers under your control. Covered losses can include: 1) theft, robbery, burglary or embezzlement of money, securities, or physical property of the business; 2) forgery or alteration; 3) fraudulent transfer of funds; 4) computer fraud; and 5) counterfeiting cash or money orders.

The amount of coverage you’ll need varies with the loss exposures your business faces. As a rule of thumb, companies that handle cash and securities, need at least 20% of their annual revenue in Minimum coverage for fraud and theft losses is usually $100,000 and many policies will cover $500,000 without significant additional premiums. You can also set specific coverage levels for depositor’s forgery, computer, and funds transfers.

Depending on your situation, you can buy Employee Dishonesty either on a stand-alone basis or as an add-on (endorsement) to your Business Owners policy or other Commercial insurance coverage.

For more information on protecting your business against light-fingered employees, just give us a call.

Although you have insured the business property on your premises, this protection does not extend off site – unless you carry Inland Marine insurance.

This type of policy goes back as far as the 17th century when Lloyd’s of London extended coverage on ship cargos beyond ocean voyages to their final destination “inland.” Today, Inland Marine covers the property of a business when it’s in transit – or stored at a location away from the premises – as well as the property of third parties that’s held on the premises. Because this property is essentially “floating,” these policies are also known as Floaters.

Inland Marine coverage would apply in such scenarios as:

• A truck carrying designer handbags for an upscale department store is hijacked at a rest stop.
• A hailstorm damages bulldozers on a machinery dealer’s lot.
• A fire at a dry cleaners scorches customers’ clothing.
• A defective sprinkler system in a “big box” store warehouse soaks dozens of TVs.

You can buy Inland Marine insurance on either a “named peril” basis (which lists the specific risks covered) or as an “all risk” policy (which covers losses from all causes not specifically listed).

This coverage can provide valuable protection for the mobile or moveable property of almost any business, large or small: everything from camera shops and computer manufacturers through building contractors and jewelry stores to museums/art galleries and trucking companies.

As Business Insurance professionals, we can tailor a comprehensive Inland Marine policy to the needs of your company. Feel free to get in touch with us at any time.

You need Employment Practices Liability insurance (EPLI) to protect you from lawsuits filed (justly or unjustly) by anyone who you employ, have employed, or even considered employing.

Before you buy this essential coverage, be sure to ask these questions:

1. Who is insured? This should include the company as an entity, along with officers, directors, and every type of employee (full-time, part-time, temp, leased, loaned and seasonal). The importance of this becomes clear if you’re ever sued for a sexist slur made by temporary receptionist to a job applicant.
2. What claims does the policy cover? You want coverage for every eventuality: monetary damages, all types of legal proceeding from criminal to regulatory, settlements, judgments, lost pay, defense fees and punitive damages.
3. How does the policy define “wrongful employment practices” beyond the obvious (sexual harassment and racial discrimination)? Make sure that you have coverage for violations of federal, state, local and common law on employment discrimination;, deprivation of career opportunities; defamation; retaliation, negligent job evaluation, and failure to have an acceptable written employment policy.
4. What does the policy exclude? EPLI should include wrongful practices that might have taken place before you bought coverage – so you don’t have to worry about a suit by that disgruntled vice president you fired three years ago for pilfering paperclips.

A word to the wise: use EPLI as a last line of defense. Risk management for your business should include diversity and sensitivity training. The U. S. Equal Employment Opportunity Commission offers a wealth of free training resources, guides, compliance information, and links to free training throughout the nation.

As always, we stand ready to offer you our professional advice, free of charge.

You’re facing a deadline to complete work under a major contract – when a voltage spike surges through your electrical lines, burning out computers and telephone equipment. How would you pay for replacing or repairing the damaged equipment, taking the steps needed to get back in production, and replacing lost income?

In today’s high-tech electronic world, more and more companies are buying Equipment Breakdown policies (formerly known as Boiler & Machinery insurance) to protect themselves against losses from a variety of mishaps that are sometimes unpredictable and often unavoidable: everything from mechanical failure or electrical short circuits to “arcing” (faulty wiring or motor burnout. The rapid growth of Internet marketing and “just in time” inventory make businesses more dependent than ever on computers – while critical data often exists only on the Internet or online databases that can’t be accessed when equipment breaks down.

Depending on their size and sophistication, some businesses include this coverage in their Property insurance, while other purchase it as an endorsement to the policy.

A comprehensive Equipment Breakdown policy should include:

• Reimbursement for the cost of repairing or replacing damaged equipment (Some policies also cover green construction, disposal and recycling methods)
• Replacement of income lost from downtime (“Business Interruption” or “Service Interruption” coverage)
• Assistance from your insurance carrier, ranging from maintenance guidelines and checklists and crisis planning templates to identifying sources for repairs, unusual parts, or replacement equipment that can be obtained quickly.

Our Business insurance experts would be happy to help you obtain a cost-effective Equipment policy that’s tailored to your needs. Just give us a call.