Need More Cash Flow for Your Business?

I realize that no business owner would answer “NO” to such a question, which is why I want everyone to know about a new way that some Workers’ Compensation (WC) Carriers are setting up premium payments.  

The traditional way of WC is to estimate a whole year of payroll figures, report those figures to the carrier and then get an estimated premium.  So what happens if the payroll numbers end up being different than the estimated payrolls? When the carrier audits the account at the end of the year, it will be determined if the business owes more money or if the carrier owes some money back to the business.  Either way, it’s no fun to write a check to the carrier for a policy that has already expired.  Nor does it feel good to know the carrier has been holding on to money that could have been used for the business, in the case of a refund. 

If a business’ payroll fluctuates from month to month, or if there is a good possibility for growth throughout the year, then the payroll reporting option could be a great one.  It is a simple concept that allows employers to report payrolls to the WC carrier at the end of each payroll period and pay premiums according to the reported amount.  It is simple to set up and here are some of the added benefits:

-          Improved cash flow by paying only what is owed during a payroll period.

-          Elimination of large down payments. (usually at least 25% of estimated annual premium)

-          Minimal audit adjustments, if any. Policies are still subject to audits.

-          No late fee charges.

Every company’s situation is different, but as you can see, there are options for available.

How are you handling your workers’ compensation policies?

5 Myths and Truths about Data Breach Liability

With the sensitive nature of the data that is stored both online and offline, there are many myths around how secure our information really is. Many are unaware of how a data breach can affect their business and personal lives.

Here we discuss 5 myths around data breach and the reality of the situation.

1. Myth - Data thieves only go after big, well-known companies; we are too small to be at risk.
Truth - Most breaches go unreported.  The Ponemon Institute conducted a study of companies of all sizes and found 51% of surveyed companies experienced cyber attacks daily, if not hourly.  In October 2009, a hacker gained access to the network of a small pub and redirected payment information to his computer instead of the credit card processing company.  The hacker has made an undisclosed amount of charges to the accounts of unsuspecting victims.  The investigation is on-going.  

2. Myth - Only companies that transact over the internet have an exposure to data breaches.
Truth - Most incidents of data breaches do not involve a website.  Data thieves know that the easiest way to a gold mine of information is to steal laptops, backup tapes, paper records, etc. 

3. Myth - Our IT Manager says that there is no way anyone could get into our network or data.
Truth - Even the largest companies with the largest IT budgets are successfully breached all the time.  Data breaches can come from outside hackers, but don't forget your former and current employees, vendors and others that have or had access to part of the network.  If your IT person says it's impossible to penetrate your network, it may be time to find a replacement. 

4. Myth - We already have coverage for this in our current policies.
Truth - Unless you have a data breach liability policy or endorsement in your insurance portfolio, you are not covered for the expenses involved for data breaches.  Some of the expenses involved that data breach liability would cover are: Notification Expenses to meet standards of CA law, Public Relations Expenses such as, credit monitoring for the possible victims, Forensics to find out how the breach happened and possible Lawsuits as a result of the data breach.  

5. Myth - It is too expensive to get a Data Breach Liability Coverage.
Truth - It is not as expensive as people may think.  It is priced according to the size of the exposure.  Many small and large businesses are adding this coverage once they understand the monetary damage that even one data breach could incur to their business.  There is also a very large carrier that is offering an endorsement to regular business owners' policies.

As you can see by this short list, there are many out there that are unaware of how to handle their sensitive data and how exposed they really are.

What measures to you take to guard your most sensitive information?

Employment Practices Liability - A Serious, but Overlooked Exposure for Businesses

I've noticed in speaking with many different business owners that some of them do not lose sleep over the idea of an employee suing them or their company.

However, if I follow up with more specific scenarios of what employees may sue for, I find that it sparks a conversation of issues currently happening with that company or it brings to light some concerns that the business owner may have been keeping in a secret hiding place. Consider the following examples of what an EPLI or Employment Practices Liability policy covers and then see if you agree with me that if this is not already part of your insurance portfolio, it should be:

• Wrongful Termination

• Sexual Harassment

• Discrimination

• Wage and Hour dispute

Coverage is not limited to these four examples, but these are the most common. Something to keep in mind is that we cannot always control what our employees do. Employees may harass or discriminate other employees or perhaps a vendor that frequents the office.  Now you have a lawsuit on your hands for something you may not have even known about until you read a letter on an attorney’s expensive looking letterhead.  This policy is one of the easiest to quote and it is well worth the time to do so.  Every company's situation is different and cost can fluctuate based on industries. Please feel free to forward this information on to anyone who could use this information, like anyone with employees! If you have any questions regarding Employment Practices Liability, please contact me at (760) 603-0131.