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Activities that take place on the company’s premises during breaks as a regular incident of employment. |
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Activities you directly benefit from (apart from any indirect improvement in your employees’ health and well-being). |
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Activities you directly or indirectly require employees to participate in as a condition of employment, or that you offer as a service to employees, such as on-site yoga classes. |
Company-sponsored recreational and social activities, or those held on company grounds or during work hours, may be fun and games, but they could leave you with a serious liability exposure. That’s why you need to plan your insurance coverage accordingly. Give us a call for help in assessing your risks.
Business insurance and risk management programs are designed to reduce and control costs. 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.
Risk exposures generally fall into three
categories: direct and indirect property losses; loss of income attributable to property
losses; and liability losses of a general, statutory, or contractual nature.
Merely renewing policies without taking a fresh look at risk exposures may prove costly. For example, if a business has grown, coverage limits that were adequate at one time may not meet current requirements. Furthermore, changes in the nature of your business may mean that additional types of coverage should be considered.
In evaluating your business, it may be helpful to enlist both management and employee input. Often, daily familiarity with specific areas of operation can make one person aware of potential risk exposures that may seem insignificant to someone with a different perspective. Also, an examination of past loss patterns can help you determine how successful your loss control strategies have been in the past.
Most business risk management programs begin with an assessment of the property insurance needs of the business. Here are some questions you might ask to determine the adequacy of your current property coverage:
While by no means a complete list, these are some of the questions you might want to pose as you begin to assess your risk management program. Usually, the parameters of property exposure will help to uncover the areas of income and liability exposure that need to be addressed.
Once you know the scope and magnitude of the risk exposures specific to your business, you can begin to design an effective risk management program. While various types of insurance will certainly play the central role in your strategy, eliminating or reducing risk (to whatever extent possible) and self-insuring (where risk retention is cost effective) should also be considered integral parts of a complete program.
In the business world, things can change quickly, and sometimes it is easy to be lulled into a false sense of security. By meeting with us at least once each year, you can assess how your business is growing and changing, thereby assuring your risk management program remains adequate for your needs.
U.S. companies pay a heavy price for poor workplace ergonomics. Work-related musculoskeletal disorders (WMSDs) caused 647,000 missed workdays in 1996, more than one-third of all the time workers lost due to sickness or injury. The dollar cost is estimated at $15 to $20 billion each year, with indirect costs running as high as $45 to $60 billion. Source: Occupational Health and Safety Administration (OSHA).
A disaster, whether from fire, flood, earthquake, or vandalism, could spell an end to your business. According to the International Facility Management Association, 60 percent of companies experiencing a disaster never reopen. A University of Minnesota study found that once your doors remain closed for as few as four and one-half days, you could experience a 50 percent drop in operational capacity.
Many small companies are doing their purchasing online these days. But in cyberspace, as elsewhere, it’s “buyer beware.” According to the National Consumers League, complaints of online fraud were up 600 percent from 1997 to 1998. Auctions accounted for 68 percent of the total. To prevent potential problems, avoid paying “offline” with a check or money order. Use a credit card through a secure connection, since you can dispute a charge, or an escrow service.
In today’s competitive and highly-regulated business environment, small business owners must keep pace with the latest developments in such areas as compensation and benefits, diversity, labor relations, and employee safety and health. The Society for Human Resource Management offers extensive information and many useful links from their Web site (www.shrm.org/). Or, contact them at the Society for Human Resource Management, 1800 Duke Street, Alexandria, VA 22314, telephone 703-548-3440.
No time to visit the library for help with your small business? The Small Business Administration (SBA) has an online library reading room with many interesting workbooks, brochures, guides, and fact sheets for small businesses (www.sba.gov/library). You can also call the SBA toll-free at 1-800-UASKSBA for answers to small business questions.
Fires in the workplace can be costly for business. According to the National Fire Protection Association (NFPA), more than 150,000 non-residential fires in 1996 resulted in nearly $3 billion in direct property damages. This figure would be even higher if it included lost business income and other indirect costs. To help improve fire safety at your company, visit the NFPA Web site at http://roproc.nfpa.org/
Crime and violence seem to be everywhere—on the nightly news, in the movies, on television programs, maybe even at a shop down the street from you. But you probably never think it will find its way to your business. Unfortunately, crime is often random in occurrence and there’s no way of knowing who the next victim will be. Whether you own a high-profile jewelry store, a family restaurant, or have a manufacturing plant, workplace security is essential.
Crime-proofing your
business is not as complicated as it sounds. There are many different options to choose
from, enabling you to find something that works best for your individual needs. Here are
just a few ideas:
1. Quality doors and locks. The number one precaution is to have a metal or solid wood door and cylinder locks that resist kicking, drilling, and beating. Some lock manufacturers offer the added benefit of keys that can only be duplicated on specially designed machines, which are not available at standard key shops and hardware stores.
2. Remote control locks. To protect your office and employees during the day as well as at night, you may want to consider a remote control lock. While their features vary greatly, the general purpose is to let you decide who should be admitted. A video camera displays the visitor.
3. Video surveillance cameras. Cameras catch criminals in the act, ultimately aiding in identification. They are available in both stationary or movable models.
4. Proper identification and security personnel. The addition of security personnel can help minimize the threat of burglary, especially for companies with large facilities and sprawling grounds. Also, companies with many employees may find great benefit in adding a security/employee check-in system, which can include identification badges.
5. Office safes. If you purchase an office safe, make sure it is big enough that it can’t be easily carried off by a thief. Also, you may want to bypass a safe with a manual combination lock, since employees may not always take the time to rescramble it after they close the door. Safes with electronic keypads eliminate this hassle, making them less likely to be left unlocked.
6. Heat and motion detectors. These monitor changes in heat and/or motion and respond with an alarm or bright lights. While they can be highly effective, they are not a good idea if you have an office watch dog or other pet that might trigger the detector.
If you are going to invest in an alarm system, the best choice is one that directly alerts a private security agency or local police station. However, an alarm that rings on the property can also help by either scaring off a burglar or attracting the attention of someone nearby.
No matter what steps you take to safeguard your business, they should always be accompanied by the proper crime insurance.
For many employers, group term life insurance is a popular employee benefit because it is relatively inexpensive. Group term life insurance is especially attractive when a company has many younger, lower-paid employees. In addition to low cost, the premiums for $50,000 of group term life insurance coverage are fully deductible to the company. In many circumstances, this can certainly be a win-win situation for both employer and employee.
However, what happens
when older, more highly-paid executives are thrown into the mix? In such cases, costs can
dramatically rise because term insurance premiums are higher for older individuals. Also,
if a group life insurance benefit is based on multiples of income, this can further
increase the employer’s cost and could potentially create a tax liability for the
employees.
Today, rising group insurance costs place many businesses in a precarious situation. If a company elects to forgo group term coverage altogether, then it risks losing key employees to competitors. At the same time, a company may not be able to justify the increasing expenses. Fortunately, businesses have a choice.
Executive group carve out is a cutting edge benefit strategy that allows employers to control the costs of a group term life insurance plan, receive full deductibility for expenses, and maintain their company’s competitive and recruiting edge. Here’s how it works.
Group term insurance
coverage for older, highly-paid employees that exceeds $50,000 is essentially “carved
out” of the existing plan. In return for the “carved out” portion of term
insurance coverage, these employees are given a permanent, cash value life insurance
policy. The new cash value life insurance policy is owned by the employee. The employer
provides the employee with a bonus, which is used to pay policy premiums.
There are several key advantages that executive group carve out provides for both the employer and the employees:
In today’s highly competitive business world, it is
important for businesses to be creative, yet cost-effective, with the benefits they offer.
If your business currently offers group term insurance coverage, it may be worthwhile to
explore how an executive group carve out plan may benefit both employees and the business.
© 1999 Copyright. The content of this newsletter is taken from sources which are reliable but are not guaranteed to completely state the available information. This newsletter is not intended as a substitute for legal, financial, or professional counsel.
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