Terrorism Insurance Finally Arrives

Events of 9/11 disturbed more than our collective sense of national security. They also disturbed the availability of insurance coverages in many areas of the country, particu- larly those perceived to have the greatest chance of future terrorist attacks.

If you live in Washington, D.C., New York City, San Francisco, or Chicago, congrat- ulations — maybe. According to plans filed by the Insurance Services Office (ISO) under the Terrorism Risk Insurance Act of 2002, you live in one of the three areas most likely to attract terrorists. And, under ISO’s suggested rating plans, you’ll be paying the highest price for terrorism cover- age. Currently ISO proposes three terrorism rate tiers, subject to review and modification by state insurance regulators. The preceding cities are in Tier One.

Tier Two sites are Los Angeles, Houston, Boston, Seattle, and Philadelphia. All other parts of the U.S. are in Tier Three. Actual rates from insurance companies might vary con- siderably. For example, the largest carriers may file their own rate factors independent of the ISO recommendations. Regulators and insurers are also working together to develop specifics on coverage amounts, provisions, and underwriting criteria.

For the latest developments in this evolving process, our risk management professionals are here to help. Contact us for a convenient time to review your situation and needs.

Is Spam Eating Your Business Dollars?

The spam problem is no joke! E- mail users suffered 6.7 million spam attacks in March 2003. One company estimates that each spam e-mail that hits an employee’s inbox costs $1 in lost productivity. America Online reports that its users are receiving 1.8 million messages per day from one particular “spammer.”

The problem for business? Spam e- mails offering business scams, sexist jokes, and even pornographic images are sitting on business computers, taking up storage space, and using time and resources. Some material included in spam messages is, at best, a waste of time and space and, at worst, illegal to possess.

DarwinMag.com, an online business technology magazine, recommends fighting back with an e-mail usage policy, followed by staff training in e-mail use and etiquette. The training should cover how to recognize and deal with spam and scams. There’s also an anti-spam web site that offers help for blocking and filtering spam (spam.abuse.net/userhelp/).

Are You an Equal Opportunity Employer?

What does the Equal Employment Opportunity Commission (EEOC) do?

The EEOC defines its mission as "to promote equal opportunity in employ- ment through administrative and judi- cial enforcement of the federal civil rights laws and through education and technical assistance."

The EEOC interprets federal employ- ment discrimination laws, which pro- hibit employment discrimination based on race, color, sex, religion, national ori- gin, age, or disability; and which pro- hibit retaliation for opposing job dis- crimination, filing a charge, or partici- pating in proceedings under these laws.

How do I determine if the equal employment opportunity (EEO) laws cover a business of my size?

All employees, including part-time and temporary workers, are counted for purposes of determining the number of employees in a business, according to the Equal Employment Opportunity Commission. These laws are:

• Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, religion, sex, or national origin. Title VII applies to employers with 15 or more employees.
   
• The Age Discrimination in Employment Act of 1967 (ADEA), which prohibits age discrimination against individuals who are 40 years of age or older. The ADEA applies to employers with 20 or more employees.
   
• Title I of the Americans with Disabilities Act of 1990 (ADA) prohibits employment discrimination against qualified individuals with disabilities. The ADA applies to employers with 15 or more employees.
   
• The Equal Pay Act of 1963 (EPA) prohibits wage discrimination between men and women in substantially equal jobs within the same establishment. The EPA applies to most employers with one or more employees.

Although the existence of an employ- ment relationship is most easily shown by a person’s appearance on the employer’s payroll, this alone doesn’t necessarily answer the question. Determining whether an employer has enough employees to be covered by these laws is, ultimately, a legal issue.

Call us to find out if your business is meeting EEO standards and if your insurance is protecting you the way it should.

Seasonal Income Requires
Seasoned Insurance

For many retailers it’s Christmas. For others it’s the summer. Or Mother’s Day. Or baseball season.

Is your business income largely dependent on a specific sea- son (or seasons) of the year? If an insured loss to your property caused your business to be closed or severely restricted only during that particular time of year, might it still crush your annual prof- its beyond hope? Are you cer- tain your business income insurance coverages will be there for you, no matter what the season?

Basic insurance coverage forms that provide income protection are often written on the assumption that your business’ income flow will remain relatively level throughout the policy year. Although this is more than adequate for the typical business, and coverage amounts can easily be adjusted for slight income variations during the year, the forms don’t anticipate wide swings — such as a retail store that might earn nearly 50% of its annual receipts during the Christmas shopping sea- son. Or the motel that earns nearly all of its income during the summer months. These types of businesses need special modifications and endorse- ments to make sure their cov- erage limits are there precise- ly when they’re needed — and in amounts that recog- nize the level of need at the most exposed times of year.

Now’s the perfect season to give us a call to find out how we can change your business income insurance coverage from “one-size-fits-all” to a fit tailored for your needs.

Business Risk Management Tips

An insurance company recently listed its top strategies for businesses to manage risk and reduce losses. These include:

1. Complete a comprehensive loss analysis. Learn from the past and put resources where they’re most needed and effective.
    
2. Identify the true costs of losses, then translate these costs into sales dollars. Use this information to allocate resources to help reduce or eliminate losses.
    
3. Check web sites, trade literature, loss control professionals, and other resources. Insurance carriers, agents, and trade groups offer potential sources of information and assistance.
    
4. Perform a material handling assess- ment. Moving materials is typically a “non-value-added” activity that can cause high-severity losses.
    
5. Do an ergonomic assessment. Inefficient movements also are “non- value-added” activities that can cause high-severity losses. Improving ergonomics can lessen fatigue and increase productivity and efficiency.
    
6. Implement a strategy for managing change. Confronting changes in the oper- ation up front can reduce risk manage- ment expenditures and prevent losses.
    
7. Educate senior staff on the fundamentals of risk management. Decision-makers who are knowledgeable about the purpose and benefits of risk management can be a business owner’s best allies.
    
8. Discuss safety issues at manage- ment meetings.
    
9. Review product safety. Many firms provide safe workplaces, but overlook the safety of their products. Product safety problems can have a significant business impact.
    
10. Focus training on reducing specific losses and monitor success.

Please call us for more risk manage- ment ideas targeted for your business. We’d be glad to help.

Leasing Unpopular
With Car Manufacturers

Ford Motor Company has decided to stop leasing vehicles in New York State. The reason: State laws in New York (as well as Connecticut and Rhode Island) hold vehicle owners, rather than drivers, finan- cially liable for car accidents. General Motors has also voiced concern about these laws. Leasing companies such as Ford and General Motors are listed as owners on leased cars.

Leasing is popular for business owners nationwide, but is used twice as often in New York due to tax advantages, according to Reuters. One in four car sales in New York is actually a lease transaction. Another key reason for the popu- larity of leasing: Business owners enjoy the flexibility of replacing their cars or car fleets every few years.

Ford said it would offer new leasing customers a product called a “balloon loan” in New York; these loans function like leases but shift car ownership to the driver.

If you have questions about liability for your business vehicle or fleet, contact our office.

Lawsuit Costs

The costs of our country’s civil justice system have increased by a factor of 100 since 1950. The societal costs of tort actions now equal a 5% tax on wages in the U.S.

So says Lord Levene, chairman of Lloyd’s of London, which helps provide capacity for commercial insurance policies in the United States and around the world. “The U.S. litigation system, if left unchecked, will destroy the American spirit of enterprise and drain the U.S. economy,” warned Levene.

“We need to strike a balance so that individuals do have a means of redress and risk- takers have a safety net should things go wrong but aren’t dragged into court at the most inconsequential slip,” Levene said, urging Congress to find this balance and act against the awarding of excessive damages.

He added that lawsuit abuse “strikes at the very heart of the American spirit for enter- prise. We now have a system in which doctors can’t deliver babies for fear of being sued and can’t afford to pay for the insurance coverage. In such an environment, what hope is there to keep the spirit of risk-taking alive, to fuel the appetite for innovation and cre- ation?” To make sure your liability insurance meets your legal needs, give us a call.