The U.S. Is seeing Some of the Largest Increases in Auto Accidents in More Than 50 years…
…And commercial auto insurance rates are spiking hard as a result. Carriers are backing down on coverage and most are putting some serious restrictions on their appetites.
See Property Casualty Insurers Association of America’s (PCI) 7 summer driving safety tips:
Also, see more from Hanover on why auto insurance rates are rising so dramatically:
-JK
Ransomware Victims Have Paid Out More Than $25 Million in Past Two Years
Ransomware victims have paid out more than $25 million in the past two years, according to a new study by Google, Chainalysis, UC San Diego and the NYU Tandon School of Engineering. The study reviewed 34 separate families and discovered that a particularly harmful strain, Locky, received more than $7 million in payments. Ransomware, which infects and locks a system until payment has been received, has become “an almost unavoidable threat” over the past few years. It’s shown to be popular amongst cybercriminals, who often demand payment in the form of bitcoin. Two ransomware attacks made earlier this year by WannaCry and NotPetya had been “deemed destructive in nature,” Forbes writes, but only received $140,000 and $10,000, respectively.
A viable solution to this sort of threat? A good Cyber Liability insurance policy will pay extortion expenses and extortion monies as a direct result of a credible cyber extortion threat. This is only one of the many areas a Cyber Liability insurance policy can help.
Cyber insurance can be essential in helping your company recover after a data breach, with costs that can include business disruption, revenue loss, equipment damages, legal fees, public relations expenses, forensic analysis and costs associated with legally mandated notifications. A lesser-known benefit of cyber insurance is the role it can play in protecting your company long before a breach occurs.
#RansomwarePayout #CyberLiability
-JK
The Perils of Using Unlicensed Subcontractors
All employers in the state of California that use employee labor must purchase and maintain Workers’ Compensation insurance. This requirement extends to contracting with and hiring subcontractors.
Here are some steps you can take to better manage your insurance and safety program when it comes to working with subcontractors:
Selecting A Subcontractor
Before a subcontractor begins work, confirm they are licensed and insured. You should only contract with licensed and insured subcontractors. Not having valid Workers Compensation insurance coverage renders a subcontractors license VOID. (Business and Profession Code 7152.2)
- Verify the subcontractors license: Contact the Contractors State License Board (CSLB). Visit http://www.cslb.ca.gov or call (800) 321-CSLB (2752).
- Verify the subcontractor is insured: Request a copy of their Certificate of Insurance that demonstrates Workers’ Compensation (WC) and General Liability (GL) insurance us current and active.
- Read the Certificate of Insurance and confirm the following:
- Named Insured: Verify the certificate shows the subcontractors company as the named insured.
- Types of Insurance Coverage: At a minimum they should have WC and GL coverage with limits of liability that adhere to the state minimum.
- Dates of Coverage: Make sure the policy is active, that the policy has not lapsed, and the dates extend through the end of the project or contract
- Confirm Coverage: Call the subcontractor’s agent or the insurance company to confirm information
- Request Updated Certificates of Insurance: If you work with the same subcontractors from year to year, mark your calendar to request updated certificates annually
- What if a subcontractor is unlicensed and not insured?
- “I’m a sole owner and exempt from insurance.” If this owner is working for you, most of the time they become a statutory employee and they would be covered under your Workers’ Compensation insurance policy
- Also, CA Labor Code 2750.5 presumes that an unlicensed person who performs work requiring a license is an employee and not an independent contractor. Verify licensing and insurance coverage!
What an Uninsured Subcontractor Can Cost You
- Legal Costs: The CSLB may initiate disciplinary action which may require you to hire legal counsel
- Increase in Insurance Premiums: As the uninsured subcontractor may be considered an employee, payments made to the uninsured subcontractor will be identified when your WC policy is audited resulting in additional premium.
- Claims Experience and Increased Costs: Your WC Insurance will be responsible for any injury to the subcontractor and their employees. Any claims paid under your policy will negatively affect your claims experience and all claims paid will apply to your experience modification factor three years, which can increase your insurance costs.
- Increase in Employment Taxes: You may be liable to the Employment Development Department for any unpaid contributions and tax withholding’s for the uninsured subcontractors employees
- Loss of Coverage: Under the California Insurance Code Sections 311 and 359, when an insured has misrepresented or concealed facts that are material to the application for insurance, the underwriter may rescind coverage or cancel the policy. Review your WC policy application, did you say yes or no to the use of subcontractors or sublet of work without certificates of insurance?
If you need loss control information to improve your loss prevention efforts, contact me anytime to discuss.
-JK
3 Key Elements of A Safety Culture
According to OSHA, “Safety cultures consist of shared beliefs, practices, and attitudes that exist at an establishment. Culture is the atmosphere created by those beliefs, attitudes, etc., which shape our behavior.”
Safety culture is the overall organizational attitude, belief, and values associated with safety in the workplace.
See the three key elements of a safety culture from Employers Compensation Insurance Company:
Many small and medium-sized businesses fail to invest in safety, when they’re the ones that can benefit the most from it. They have the most to lose in the face of a costly workplace accident. Creating a climate of safety doesn’t have to break the bank and it doesn’t require a large investment of time or a committed safety officer. Contact me today if you need help for your business.
Research is showing that, for every dollar a business invests in preventative measures, they’re seeing a four dollar return on that investment.
-JK
Commercial Auto Insurance Prices Likely to Keep Rising
Most lines of insurance cycle between soft and hard markets over a number of years, which has a direct impact on the price of insurance. The commercial auto insurance market is currently hardening after many years of a soft market, which has resulted in higher prices for both commercial and personal auto policies.
Between 2011 and 2016, competition between auto insurance carriers created a soft, buyer-friendly market. Since then, however, the high cost of claims and increasing costs of vehicle repairs have contributed to a noticeable transition in the market.
Contact me today. I can provide you with resources to help you understand and save on commercial auto insurance, including this prior post, “California Commercial Auto Insurance – Losses & Costs Rising.”
-JK
8 Ways To Help Control Employee Theft at Your Restaurant
As if the day to day challenges of running a restaurant aren’t enough. The fierce competition, marketing, keeping guests satisfied and coming back for more, getting those 5-star Yelp reviews. The list goes on and on. But what about your own staff stealing from you right under your nose? Employee theft is a big problem for restaurants. Annual costs associated with employee theft in the restaurant industry are estimated at $3 to $6 billion nationally!! Employee theft is a bad situation for any business, and unfortunately it’s a common one in the restaurant industry.
Restaurant employees may provide free food to their friends and family, or they may take restaurant items home or steal money and tips.
Here are some precautions to take to prevent employee theft at your restaurant:
- Have a Theft Policy and Make it Known: Make sure every employee knows how the company defines employee theft and the repercussions of any theft. Offer annual training on the subject and have employees sign a policy. Place posters and signs around the restaurant to keep the policy fresh in employees’ minds.
- Conduct Background Checks: Check the references of all hired employees. If the applicant is a high school student and has never had a job before, contact his/her guidance counselor or ask for the contact information from a babysitting or dog sitting job.
- Use Technology: Video surveillance cameras are an excellent way to catch potential thieves, but they can also be a positive for the restaurant by pointing out procedural problems or ensuring employees are being safe on the job. Also, using technology that limits the amount of employee cash handling can deter would-be thieves.
- Treat Employees with Respect: Employees who are treated fairly and with respect by their employers are less likely to steal from the company. The employees feel less justified in stealing from those who care about them and treat them with dignity.
- Conduct a Drawer Check: Make sure the money balances out at the end of each shift.
- Keep a Careful Inventory: After each shift, count the remaining items and compare them to the items sold, paying specific attention to the products you sell the most of. Make employees aware that you conduct these daily inventories to deter them from trying to steal anything in the first place.
- Keep Your Eyes on the Trash: Employees tend to steal things when they are taking out the trash. Use clear bags to reduce the likelihood that this will occur.
- Get to the Root of the Problem: If you suspect an employee of stealing, move him/her to another shift. If you recognize that you are now missing items from the new shift, approach the employee calmly and ask for an explanation.
- Protect Your Customers: A new way of stealing from customers is called credit-card skimming. Restaurant employees will swipe the customer’s card through an unauthorized magnetic card reader to obtain their account information. Then, the data is copied and used to make counterfeit cards. To prevent this from occurring in your establishment, monitor the register closely and only allow seasoned employees to handle customer money and credit cards.
Need help dealing with employee theft problems at your restaurant? Or, have other risk management issues you need guidance on? Contact me today to talk.
Focus on what you do best, providing the delicious food and ambiance that will keep your guests coming back posting those 5-star Yelp reviews. The money will follow and you deserve to have it in YOUR pocket.
-JCK
High Five! Commercial Property Insurance Is Tax Deductible
In addition to protecting your commercial real estate property, there is even more more good news when it comes to your commercial property insurance policy……it is tax deductible. Yes, you read that correctly. By protecting yourself and your property, you can write this expense off to save on taxes.
No matter where you live or where your property is located, you can take advantage of many federal tax deductions available to commercial property owners across the U.S. For example, you can deduct the premiums you pay for nearly every insurance option for your commercial rental activity, including:
- Fire, theft and flood insurance
- Landlord liability insurance.
- The cost of health and workers’ compensation plans for any employees who work on premises.
A major benefit of commercial property insurance is that it allows you to combine the many types of insurance covered into a single, cost-effective package policy that can help you get far better deals than if you purchased your insurance coverage’s a la carte (Property, General Liability, Business Income, Umbrella, etc.).
Furthermore, in the event that your commercial real estate property is adversely affected by a rare weather event like a flood, you can obtain a tax deduction for all or part of your loss.
Source: The Hartford
-JK
Orange County Great Park
Since we’re in the middle of a lazy President’s Day holiday weekend with no real plans, my wife and I decided to check out Orange County Great Park in Irvine on Sunday to visit the Sunday Farmers Market. Located pretty much in the center of Irvine, not far from the Spectrum, Orange County Great Park is a transformation of the former Marine Corps Air Station El Toro into a massive metropolitan park.
The Certified Farmers Market is held from 10 a.m.-2 p.m. every Sunday. Fresh, locally grown fruits and vegetables, handcrafted artisan products, and food trucks are on site to buy from. The weather was kind of crummy so the turnout was sparse but we bought some good food to take home to enjoy. We also walked a lot of the park which is dog and child friendly. It’s a great place to let them run loose and drain their energy.
Orange County Great Park has “The Great Park Balloon” which is the park’s main attraction. With the ability to hold up to 25 to 30 passengers, and soar 400 feet above the surrounding landscape, it serves as a public observation deck for the Great Park’s development and offers a 360° view that spans 40 miles on a clear day. Unfortunately, it wasn’t a clear day and the weather wasn’t ideal, so the balloon was closed . All good though.
Overall, it was a fun inexpensive way to get out to enjoy the weekend. I highly recommend it if you have kids or dogs and are looking for inexpensive family entertainment. Here are a handful of Orange County Great Park:
For more information including hours and activities, visit Orange County Great Park.
-JK
What Does Business Insurance Cover?
Business insurance coverage for a commercial operation can include the following and more:
General liability insurance: Covers third party liability claims for injuries to other people.
Professional liability and malpractice insurance: aka Errors & Omissions Insurance (E&O). E&O covers professionals against loss due to negligent professional duty, wrongful acts, and advice and services that lead to another person’s loss or injury.
Product liability insurance: Covers against faulty products and damage, illness, injury or death that may occur from using a faulty product.
Property insurance: Covers loss and damage to your commercial business property due to fires, theft, storms and other causes.
Commercial vehicle insurance: Covers commercial vehicles and drivers for collision, liability, property damage, personal injury and “comprehensive” (now known as “other than collision”).
Workers compensation: Covers your employees if they become ill or injured while working on the job.
Loss of income: Also referred to as Business Income, this covers your business expenses such as rent and employee wages if you can’t operate your business.
Key person insurance: Covers loss of income that may result from the head of the business or other key personnel becoming incapacitated or passing away (also known as key man insurance).
Cyber-crime insurance: Provides protection for risks due to Internet use and online communications.
Each and every business is unique. A food products manufacturer or distributor doesn’t have the same risk exposures as a software developer. As an everyday Joe, you’re expected to know if you need these coverage’s or not for your business. If your head is spinning or you’re feeling overwhelmed, this is why you work with an insurance agent or broker.
Let’s face it, most people really don’t like insurance, they don’t care to read their policies, and they just wish someone else would take care of it for them. I like insurance (don’t judge me), I read policy forms all day long for my clients, and people call me to handle all their business insurance needs so they don’t have to. Pick up the phone and call me today or email me if you have questions about these overage’s and whether your business needs them or not.
-JK
EEOC Launches Small Business Resource Center
One of the most challenging aspects of owning a small business (particularly in California) is knowing and following legal requirements regarding hiring, managing, and sometimes terminating employees. It seems like there are new laws drafted daily. How can one possibly stay on top of it all???
The Equal Employment Opportunity Commission (EEOC) recently launched a Small Business Resource Center designed to assist small business owners in their compliance with employment laws they, the EEOC, enforce.
This new dedicated EEOC Resource Center contains a general overview of small business obligations including the posting and record-keeping requirements to assist in staying compliant with the myriad of nondiscriminatory laws.
The website also has available FAQs, tips, fact sheets and videos, as well as no-cost outreach programs. This is a good resource to keep in mind when you need to make sure how you are treating employees is legal.
I wouldn’t recommend that you try to do it all on your own though. Use a professional Human Resources consultant or attorney when necessary when dealing with sensitive matters surrounding the employment process.
Need help finding a reputable Human Resources consultant or attorney to help with your business? Contact me today. I have relationships with some great ones who can help you out.
-JK
About Me
I grew up in Fullerton, CA and graduated from Servite High School in Anaheim. I have my Bachelors degree from Loyola Marymount University in Los Angeles. I currently live in Tustin, CA.
Please contact me if you need help with any of the following lines of insurance for your business:
-Cyber / Data Breach
-Commercial Property
-Commercial General Liability
-Products Liability
-Workers Compensation
-Commercial Auto
-Umbrella/Excess Liability
-Errors & Omissions/ Professional Liability
-Employment Practices Liability
-Directors & Officers
-Life & Disability Insurance
Jimmy Kinmartin, CPCU 