Tag: Business Insurance

Self Storage Facilities: Protecting the Bottom Line

Most businesses rely on their facilities to manufacture products or provide services. In the self storage industry, the facilities typically are the product. If property loss or damage is not fixed quickly, the business may fail. Though most believe their self storage facilities are adequately insured against property loss or damage, many overlook Ordinance and Law coverage. This oversight can be the downfall of any self storage facility.

Ordinance and Law insurance is designed to pay the extra expense of rebuilding to comply with ordinances or laws, such as building codes, which did not exist when the building was originally constructed. Since the costs of improving a structure to bring it up to code are specifically excluded under most property policies, this coverage can be quite valuable.

An insured’s obligation to rebuild according to current and stricter codes is often triggered when an insured building experiences a covered loss, such as a fire or hurricane. Unfortunately, many insureds first learn of this additional obligation and expense after they experience a property loss. To avoid the burden of these additional rebuilding costs, self storage facilities can add Ordinance and Law coverage to their current property insurance policies. Doing so will generally cover:

  • Loss to the undamaged portion of the building;
  • Increased demolition costs; and
  • Increased costs of construction.

Since rebuilding according to current building codes may suspend operations for an extended period of time, self storage facilities can purchase Business Interruption insurance to cover reductions in net income caused by an inability to continue business operations. Since payroll, mortgage/rent payments, money owed to suppliers, taxes, and other continuing expenses must be met, Business Interruption insurance may provide badly needed capital when operations are suspended.

Combining Ordinance and Law coverage with Business Interruption coverage, self storage facilities increase the likelihood of surviving not only the initial property loss, but a protracted suspension of operations resulting from the obligation to rebuild in accordance with current building codes.

While the decision to obtain Ordinance and Law and Business Interruption coverage should be easy, understanding specific policy provisions and terms can be difficult. Since there may be variations among different policy forms, it is important that you consult with an experienced insurance agent to discuss your options.

If you would like more information about protecting your self storage facility or obtaining Ordinance and Law and Business Interruption insurance coverage, please contact us.

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No Penalty for Noncompliance with ACA’s Notice of Coverage Options

On September 11, 2013, the United States Department of Labor announced that employers will not be fined or penalized under the Affordable Care Act for failing to provide employees with notice about coverage options available through the ACA’s Health Insurance Marketplace (Exchanges). This comes just weeks before the October 1, 2013 deadline for employers to begin providing the notice to their employees.

The announcement, which was posted on the DOL’s website as a “FAQ on Notice of Coverage Options,” states:

Q: Can an employer be fined for failing to provide employees with notice about the Affordable Care Act’s new Health Insurance Marketplace?

  1. No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.

A day later, the U.S. Small Business Administration posted similar information on its website.

This announcement comes as a surprise to those who assumed that noncompliance would be met with a fine or penalty. Though the ACA’s employer notice requirement does not contain a specific penalty provision, many assumed that the ACA’s general penalty of $100 per day would apply. And, since news of the DOL’s position came informally through its website rather than the formal regulatory process, some believe that fines or penalties for noncompliance remain a possibility in the future.

This new development has understandably left many employers unsure about how to deal with the ACA’s employer notice requirement. Though it is still the law, the DOL’s announcement has undoubtedly left many wondering whether a requirement can really exist without consequences.

At Setnor Byer Insurance & Risk, we are committed to guiding you through the constantly changing health care reform landscape. Check back with us periodically for future informational updates about the Affordable Care Act.

If you have specific questions about the Act or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, view our health product page.

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What is a Certificate of Insurance?

Certificates of Insurance are documents provided by Agents to verify the existence of insurance coverage. They are commonly used when an agreement or contract requires a party to maintain specific types of insurance. For example, a Certificate of Insurance can be used when:

  • A general contractor wants to verify that its subcontractor has the statutorily required workers’ compensation insurance;
  • A mortgage lender wants to verify that the homeowner has sufficient property insurance;
  • A commercial landlord wants to verify that its tenant has all the insurance coverage required by the lease; or
  • A homeowner wants to verify that its lawn service company has general liability insurance.

Certificates of Insurance are issued to the certificate holder—the person or entity that needs to verify insurance coverage. Though common and relatively straightforward, there is quite a bit of confusion about what Certificates of Insurance do, and more importantly, do not do.

A Certificate of Insurance provides a superficial snapshot of insurance coverage that is in place at the time it is created. Contrary to what many believe, Certificates of Insurance:

  • Are NOT insurance policies.
  • Do NOT provide certificate holders with any rights under the insured’s policies. This means certificate holders cannot file a claim or request a defense under the insured’s policies.
  • Do NOT amend, extend or alter the coverage provided by the insured’s policies. This can only be accomplished with an endorsement, rider or amendment to the policy.
  • Do NOT create a contract between the insurance company and the certificate holder.
  • Do NOT guarantee that insurance coverages listed on a Certificate of Insurance will continue in the future. A Certificate of Insurance issued today may not be accurate tomorrow.
  • Are provided for informational purposes ONLY.

Though there are various Certificate of Insurance forms, those developed by ACORD (Association for Cooperative Operations Research and Development) are widely used to provide specific information about existing insurance coverage, such as:

  • the insurance companies issuing the policy
  • the policy numbers
  • effective dates
  • types of insurance (ex. general liability, automobile, workers’ compensation, property)
  • policy limits

These forms also provide a space to add additional comments or conditions. This is where problems may arise if an insured or certificate holder wants to add specific language to their Certificates of Insurance. For example, a certificate holder may want to state that there is an additional insured under the policy, or an insured may want the certificate to state that any obligation to indemnify the certificate holder is covered by the policy.

If such statements happen to be true, it is not because they were typed on the certificate. Remember that Certificates of Insurance do not affect, extend, or change the insurance policy, so any incorrect or contradictory statements are meaningless to the insurance company. They can, however, be grounds for a costly lawsuit, so an experienced insurance agent should be used when issuing or receiving Certificates of Insurance.

If you would like to learn more about dealing with Certificates of Insurance or how we can help, please contact us.

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Preventing Data Security Breaches

Every business must be able to identify the likeliest source of a data security breach so that they can also identify how to prevent it. Is it an executive’s laptop computer, the copy machine or the office’s wireless network? Could it be something else? Since the first step to preventing a data security breach is understanding the risk, it’s time to learn more about your business’s sensitive data.

Effective data security starts by assessing the kind of information a business has and identifying who has access to it. Evaluating data security vulnerabilities requires an understanding of how sensitive data moves into, through, and out of a business, and who has or could have access to it. Here are some tips from the Federal Trade Commission.

Take Inventory

Take an inventory of all devices and equipment capable of storing sensitive data, such as laptop computers, mobile devices, flash drives, off-site servers, disks and digital copiers. Do employees work from home? If so, add their home computers to the list.

The type and location of sensitive data should also be inventoried. Don’t stop with the office’s filing cabinets and computer systems. Sensitive data may also be received from other sources, such as websites, contractors or call centers. Every possible source and destination for sensitive data must be considered.

Track Sensitive Data

It is important to know how the business obtains, stores, shares and disposes of sensitive data. Every department should be consulted, including sales, information technology, human resources and accounting. Don’t forget about contractors and other third-party service providers.

This process should provide a business with a thorough understanding of:

  • Who provides sen­sitive data? Does it come from customers, credit card companies, banks or other financial institutions, credit bureaus, job applicants, contractors, third-party service providers?
  • How is sensitive data received? Does it come via phone, fax, mail or email? Is there a website designed to request and receive sensitive data? Are there any other possible entry points?
  • What kind of sensitive data is collected? Do business operations require or permit collecting financial information (credit cards, bank accounts, credit reports), personally identifying information (drivers’ licenses, social security numbers) or medical information?
  • Where is sensitive data stored? Is it kept on disks, tapes, laptops, smartphones, tablets or other mobile devices? Employees’ personal computers or mobile devices? Where are data backups and copies stored?
  • Who can access sensitive data? Is access to sensitive data limited to only those who need it? Are there security measures in place? Is sensitive data protected against unauthorized access by contractors or other third-party service providers?

Throughout this process, pay particular attention to certain kinds of sensitive data. Identity thieves typically look for social security numbers, credit card and other financial information.

Organizations should also consider protecting against data security breaches with insurance.Various cyber liability products are available to protect against privacy injuries, such as identity theft, and to cover the cost of complying with various data breach notice laws. Given the complexity of the risk, an experienced insurance agent should be consulted to ensure that adequate coverage is obtained. If you would like to learn more about insuring against data security breaches, contact us.

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What is a Third Party Over Action?

Assume an employee suffers an accidental workplace injury. After collecting benefits under his employer’s workers’ compensation insurance policy, the employee tries to get more money by filing a negligence lawsuit. Can the employer be required to pay the employee for his negligence damages? Maybe. Would the employer’s commercial general liability insurance policy cover this? Maybe not.

Workers’ compensation laws are basically a trade-off. On one hand, employees enjoy the benefit of what is essentially a no-fault compensation system that provides benefits for workplace injuries. In exchange, employees generally give up the right to sue their employers for negligence. So, if our employer is immune from the employee’s negligence lawsuit, what is there to worry about? A Third Party Over action.

A Third Party Over action is a type of action in which an injured employee collects workers’ compensation benefits from the employer and also sues a third party for causing or contributing to the employee’s injury. Then, because of some type of contractual relationship between the third party and the employer, the liability for the employee’s lawsuit is passed back to the employer. Here is an example of a typical Third Party Over action.

John, an employee of Acme, trips on a broken floor tile while at work. Despite collecting benefits under Acme’s workers’ compensation insurance policy, John also sues the owner of the building where Acme’s offices are located because it negligently failed to repair the broken tile. Under Acme’s lease, Acme is contractually required to indemnify the building owner for any claims brought by Acme’s employees. Upon being sued by John, the building owner demands indemnification from Acme pursuant to the lease, and essentially passes the liability for John’s negligence lawsuit back to Acme.

Though state statutes and judicial decisions may provide employers with limited protection in certain situations, Third Party Over actions still pose a significant risk. Employers that have agreed to indemnify a third party for its employees’ lawsuits must find out whether they are insured against the risk. This can be very difficult.

Claims involving injured employees are typically not covered by commercial general liability (CGL) insurance policies. However, a Third Party Over action may be covered by some CGL policies if the employer’s indemnification agreement with the third party meets the policy’s requirements. Other CGL policies may exclude Third Party Over actions altogether. This is why it is important to read both the policy form and the third party indemnification contract very carefully.

Given the complexity of Third Party Over actions, a reputable insurance agent with substantial experience in evaluating and insuring against Third Party Over actions should be consulted.

If you would like to learn more about protecting your organization against Third Party Over actions, please contact us.

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Affordable Care Act’s Employer Mandate Delayed Until 2015

Shortly before the July 4th holiday, the U.S. Department of the Treasury announced that enforcement of the Employer Shared Responsibility requirement under the Affordable Care Act (Act) will be delayed until 2015. The employer mandate, which generally requires employers with at least 50 full-time or full-time equivalent employees to offer health care benefits or pay a penalty, was scheduled to go into effect on January 1, 2014.

Through a dialogue with businesses about the Act’s employer and insurer reporting requirements, the administration learned of concerns about the complexity of the requirements and the need for more time to implement them effectively. As a result, the administration decided to delay the Act’s mandatory employer and insurer reporting requirements.

According to the announcement, this delay is designed to:

  • Provide the administration more time to consider ways to simplify the new reporting requirements consistent with the law.
  • Provide more time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.

The administration recognized that delaying the Act’s mandatory employer and insurer reporting requirements will make it impractical to determine which employers owe shared responsibility payments for 2014. As a result, the administration decided to also delay enforcement of the employer mandate, stating that “these payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015.”

The Treasury says it will be publishing formal guidance regarding the delayed enforcement soon and that proposed rules will be published this summer. Once these rules have been issued, the administration says it will work with employers, insurers and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015.

So what should employers be doing now? The Employer Shared Responsibility provision is still the law, it just isn’t being enforced. Not surprisingly, talking heads are making predictions and debating whether it’s really speeding if nobody can pull you over. Unfortunately, the manner in which employer’s will be affected by the delay will not be known until additional guidance is issued.

At Setnor Byer Insurance & Risk, we are committed to guiding you through the changing health care reform landscape. Check back with us periodically for future informational updates about the Affordable Care Act. If you have specific questions about the Act or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.

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Protecting Sensitive Data: How Secure is Your Wireless Network?

In previous articles we discussed how laptop computers and the office copy machine increase the risk of data security breaches. Another significant risk to an organization’s sensitive data is the wireless network. Since today’s workplaces are increasingly “going wireless,” the Federal Trade Commission recommends taking the following steps to protect wireless networks.

Understand how a wireless network works. Going wireless generally requires connecting an internet access point to a wireless router, which sends a signal through the air, sometimes as far as several hundred feet. Any computer within range can pull the signal from the air and access the internet. Unless precautions are taken, others can “piggyback” on the network or access information on the computer.

Use encryption. Encryption encodes the information so that it’s not accessible to others. It is the most effective way to secure a network. Two main types of encryption are available: Wi-Fi Protected Access (WPA) and Wired Equivalent Privacy (WEP). WPA2 is strongest so it should be used whenever possible. Since some older routers use the less secure WEP encryption, consider upgrading to a newer, more secure router. Note that wireless routers often come with the encryption feature turned off, so be sure to turn it on.

Use anti-virus and anti-spyware software. Since hackers are constantly developing new ways to attack computers and networks, security software is necessary. This software needs to be updated periodically so systems should be set to update automatically whenever possible.

Change the name of the router. The name of the router (often called the service set identifier or SSID) is likely to be a standard, default ID assigned by the manufacturer. Change the name to something private and unique.

Change the router’s pre-set password. Manufacturers typically assign a standard default password to a wireless router. Default passwords should be changed. Visit the manufacturer’s website to learn how to change the password.

Limit access to the wireless network. Every computer that is able to communicate with a network is assigned a unique Media Access Control (MAC) address. Wireless routers usually have a mechanism to allow only devices with particular MAC addresses to access the network. However, since MAC addresses can be mimicked, don’t rely on this step alone.

Turn off wireless network when it’s not being used. A wireless network cannot be accessed when it is turned off.

Be cautious when using a public wireless network. Many cafés, hotels, airports and other public places offer wireless networks for their customers to use. These “hot spots” are convenient, but they may not be secure.

Organizations should also consider protecting against data security breaches with insurance. Various cyber liability products are available to protect against privacy injuries, such as identity theft, and to cover the cost of complying with various data breach notice laws. Given the complexity of the risk, an experienced insurance agent should be consulted to ensure that adequate coverage is obtained. If you would like to learn more about insuring against data security breaches, contact us.

If you would like to learn more about preventing data security breaches, take our online course Information Risk Management: Strategies for Preventing and Mitigating Information Security Breaches.

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New Deadline for Affordable Care Act’s Employer Notice Requirement

Under the Affordable Care Act (ACA), employers are required to give employees written notice about their options for purchasing health insurance through Affordable Insurance Exchanges (Health Insurance Marketplaces). Though the original March 1, 2013 deadline was delayed, the Department of Labor (DOL) recently announced the new deadline for employers to begin giving this notice.

Beginning October 1, 2013, employers must provide the required ACA notice to new employees at the time of hiring. In 2014, the DOL will allow employers to satisfy this requirement by providing the notice within 14 days of an employee’s start date. An employer’s current employees must receive their notice no later than October 1, 2013.

Notice must be given to each employee regardless of their plan enrollment status or their part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan. The notice, which must be understood by the average employee, may be provided by first-class mail or, in some instances, electronically.

The ACA’s notice requirement applies to employers covered by the Fair Labor Standards Act (FLSA). The FLSA generally applies to employers with one or more employees who are engaged in, or produce goods for, interstate commerce. Also the FLSA typically does not cover enterprises with less than $500,000 in annual dollar volume of business. However, the FLSA does cover specific entities regardless of their dollar volume of business, including hospitals, preschools, elementary and secondary schools, institutions of higher education, and federal, state and local government agencies.

To help employers satisfy their notice requirement, the DOL has prepared two model notices. There is one model notice for employers who offer a health plan to some or all employees, and another model notice for employers who do not offer a health plan. Employers may also use modified versions of these model notices as long as the required information is present.

If you would like to learn more about your obligations under the Fair Labor Standards Act, click here. If you would like information about insuring against FLSA claims, click here.

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Are You Ready for the 2013 Hurricane Season?

For those living or working in areas at risk of experiencing a tropical storm or hurricane, June 1st rarely passes unnoticed. At Setnor Byer Insurance & Risk, we understand that preparing for Hurricane Season is rarely easy and often stressful. We also understand that a lack of awareness and preparation can make a bad situation worse, and that the best way to limit the risk is to take preventative steps now.

The National Oceanic and Atmospheric Administration (NOAA) estimates a 70 percent probability that the 2013 Hurricane Season will bring:

  • 12 – 18 Named Storms (winds of 39 mph or higher)
  • 6 – 10 Hurricanes (winds of 74 mph or higher)
  • 3 – 6 Major Hurricanes (winds of 111 mph or higher)

These estimates indicate that activity will exceed the seasonal average of 11 named storms, six hurricanes and two major hurricanes.

According to NOAA administrator Jane Lubchenco, Ph.D., “the United States was fortunate last year. Winds steered most of the season’s tropical storms and all hurricanes away from our coastlines…However we can’t count on luck to get us through this season. We need to be prepared, especially with this above-normal outlook.”

Though different situations call for different measures, the following tips can assist you in developing your own plan for dealing with the 2013 Hurricane Season.

Before the Storm

  • Monitor the news to allow time to prepare.
  • Identify all tools and equipment that will be needed to secure property before a storm and limit the damage after the storm (flashlights, batteries, caulking, tarpaulins, sandbags, cutting and fastening equipment, etc.).
  • Clear drains and downspouts to minimize the risk of flooding.
  • Move items inside.
  • Unplug electrical equipment and move property away from windows.
  • Check and secure all documents and records.
  • Take or update photographs of real and personal property.
  • Gather insurance policies and agent/insurer contact information.

After the Storm

  • Only after it has been declared safe to do so, look for any property damage and take reasonably necessary steps to protect against any further damage.
  • Report fallen power lines to power company immediately–stay away from them!
  • Check exterior walls and roof for damage from wind, rain, flying objects and rising waters (flood insurance).
  • Check all interior perimeter walls, floors, and roof for leaks and water damage.
  • Document all damage with photographs and video.
  • Prepare detailed damage reports.
  • Call your insurer or agent as soon as possible to report damage.

While preparing for Hurricane Season is never easy, our team of experienced and responsive professionals can work with you to make sure that your home, cars and property are protected.

For over 30 years, Setnor Byer Insurance & Risk has been helping our clients prepare before the storm and rebuild after. Our clients benefit from a Hurricane Insurance Program that includes an emergency and after hours claims service hotline in addition to guidance for disaster planning.

If you would like more information about how Setnor Byer Insurance & Risk can help you prepare for the 2013 Hurricane Season, contact us.

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Prevent Data Security Breaches by Protecting Laptop Computers

While laptop computers can increase workforce productivity, they also increase the risk of harmful and costly data security breaches. Since a lost or stolen laptop can jeopardize sensitive information, the Federal Trade Commission recommends the following preventative measures to protect laptop computers and the personally identifying information it contains.

Treat laptops like cash. People don’t leave their cash unattended, not even for a minute. When traveling, cash isn’t usually checked with luggage and it isn’t left in the backseat of the car. Keep the same watchful eye on the laptop as you would on cash.

Lock laptops with a security cable. Whether in the office, a hotel or some other public place, a laptop security cable should always be used. Attach it to something immovable or to a heavy piece of furniture, such as a table or a desk. Security cables work similarly to bike locks. You can purchase them at Office Depot, Amazon, Staples, etc.

Be on guard in airports and hotels. The confusion and shuffle of security checkpoints can be fertile ground for theft. Keep an eye on the laptop when going through airport security. Hold onto it until the person in front of you has gone through the metal detector, and wait for it to emerge on the other side. When staying in a hotel overnight, a security cable may not be enough. Store the laptop in the room safe. If leaving a laptop attached to a security cable in a hotel room, consider hanging the “do not disturb” sign on the door.

Consider an alarm. Depending on security needs, a laptop alarm can be an excellent security device. Some laptop alarms sound when there’s unexpected motion, or when the computer moves outside a specified range. A program that reports the location of stolen laptops upon being connected to the internet can also provide additional security.

Consider carrying laptops in something more discreet than a laptop case. When taking a laptop on the road, carrying it in a computer case may advertise what’s inside. Consider using a suitcase, a padded briefcase, or a backpack instead.

Don’t leave laptops unattended. Though colleagues may seem trustworthy, avoid the temptation to leave laptops unattended, even for a minute. Laptops should be taken whenever possible. If taking the laptop is not an option, use a cable to secure it to a table or desk.

Don’t leave a laptop in a car. Parked cars are a favorite target of laptop thieves. If leaving a laptop in a car is the only option, keep it locked up and out of sight.

Don’t put laptops on the floor. Whether at a conference, coffee shop, or registration desk, laptops should not be left on the floor. If it is necessary to put the laptop down, place it between your feet or up against your leg so you remember that it’s there.

Don’t keep passwords with the laptop or in its case. Remembering strong passwords or access numbers can be a challenge. However, leaving them in the laptop carrying case or on the laptop is like leaving keys in a car. In the event a laptop is lost or stolen, don’t make it easy for a thief to access sensitive information stored on the device.

Create ‘Uncrackable’ Passwords

The best passwords are over 6 characters, include upper and lowercase letters, and use numbers and symbols. Passcreator.com can generate a password that is nearly impossible to crack. However, this would mean you probably won’t remember it on your own. So, if you have to write any of your passwords down keep that document separate from your laptop. You can write them down on a piece of paper and keep them in your wallet. You can store them on Google Drive. Just be sure to password protect the doc! You can also store them on an Excel spreadsheet and protect the workbook to make it harder for a hacker to view its contents.

Encrypt sensitive data. The consequences of a lost or stolen laptop can be minimized by encrypting the data stored on the device so that it cannot be accessed by anyone without the proper authorization.

Organizations should also consider protecting against data security breaches with insurance. Various cyber liability products are available to protect against privacy injuries, such as identity theft, and to cover the cost of complying with various data breach notice laws. Given the complexity of the risk, an experienced insurance agent should be consulted to ensure that adequate coverage is obtained. If you would like to learn more about insuring against data security breaches, contact us.

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