Heighten Security

Much has been written about the vulnerability of the computer systems used by U.S. businesses. Maintaining e-commerce security measures is a major task for many companies.

Valuable corporate information often resides on portable computers. Even information on PDAs and mobile phones could represent a major security breach.

The first step in preventing the theft of key data is determining how information can be stolen or lost if your employees’ laptops, PDAs, or cellular phones are stolen. Next, develop a specific internal control plan with procedures to maintain reliable and accurate records and safeguard all corporate assets.

Numerous commercial products can minimize damage that the theft of a portable device can cause. These products also limit the amount of data that can be extracted, should the device be stolen. Encryption software can provide yet another method of loss control, as can password lockout programs.

Sometimes, such basic measures – as the effective use of passwords that consist of six or more characters, numbers or letters – can provide security. When using letters, the alternation of upper and lower case can be just as effective as some of the more expensive options. The key is to develop a plan and make certain that all employees implement it.

If you’d like us to review your insurance for e-commerce risk, just give us a call.

Are Online Sales Right for You?

If you’re considering jumping into the online auction pool to test the waters for your business, make sure you have the right insurance coverage.

Selling goods on auction sites has moved beyond an Internet “garage sale” or “flea market.” eBay’s fastest growing categories involve businesses selling their products. The online auction world is now a credible and increasingly important player in moving excess inventory or creating another marketing channel for new products and services.

Of course, there are insurance implications to creating an online “store.” If you’re exploring the opportunities of creating an online sales channel, give us a call to discuss any changes your insurance might need.

It Might Not Be The Bookkeeper

Doing business in today’s economic environment can create significant amounts of risks. As companies nationwide try to find ways to keep their doors open, they’re downsizing, merging, and consolidating. Notably, these are the types of activities that cause employees to believe they’re justified in committing fraud. Employee fraud is a growing problem that involves such serious scams as asset misappropriations, fraudulent financial statements, bribery, and even corruption.

Currently, it’s estimated that American businesses lose more than $40 billion annually due to employee fraud. Recent studies have found that the most harm comes from the executive suite, not from a disreputable bookkeeper. The study, prepared by the Treadway Commission, found that higher-level executives of the victim’s company caused 83% of fraud that occurred from 1987-1997.

As with most risks, prevention is the best way to reduce losses. Companies must implement internal checks and balances to assure ethical behavior. Companies also should be certain to obtain the proper commercial crime coverage. If you have questions about your crime coverage, don’t hesitate to contact our staff for a coverage review.

Don't shred that

Shredding of documents can leave a company without insurance coverage. Document shredding has led to charges of obstruction of justice in the Enron affair and contributed to lawsuits over insurance coverage. The Enron/ Anderson case highlights the need for businesses to develop formal document-retention procedures.

Any procedure must recognize that companies can’t be expected to retain all data for extended periods. Lack of storage space will preclude this option for most firms. However, companies should consider retaining important documents for at least six years, because destruction prior to that might be considered obstruction of justice.

The American Institute of Certified Public Accountants notes that because standards for document storage are specific to business type, they’re difficult to regulate. It also points out that the prospect of sanctions and fines under the law doesn’t deter firms from shredding documents that could engender litigation. Quality standards and verification can help prevent business and insurance fiascoes.

Are Background Checks Needed?

According to Clarence M. Kelley and Associates, a company that specializes in conducting background checks, more employers are being sued for inadequate screening of applicants. The law clearly shows that employers have a duty to screen employees. Kelley and Associates notes that the average award in these suits comes to $1 million.

More employers are considering implementing background pro-cedures and that might be a wise decision. One out of every 47 Americans was either on proba-tion, on parole, or in prison during 2000, and three out of four appli-cants falsify some information on their applications.

Considering these statistics and the legal implications of hiring potential security problems, background checks can form an essential component of risk management. In addition to prevention measures such as background checks, maintaining the proper liability insurance coverage is critical to protecting your business.

Call us for a review of this important coverage; we’d be glad to help you better understand what you have and whether the limits of coverage are reasonable. Ask us, too, about options for professional liability coverage.

Upgrade Please

These days, employees are always asking for faster and smarter computers, peripherals and networks. Competition has kept prices down for these business tools — so employers often feel compelled to oblige. After all, we all want our workers to be more productive, and modern computers and fast networks can help.

Be sure insurance coverage
matches up with your
new computer equipment

But as you’re making these upgrades, we want you to think about your property insurance coverage as well. It’s important that we discuss with you how or if your policy would pay for damage or theft to hardware, software, networks, and related equipment.

Also ask us about your data — often the most valuable property a business has, and often overlooked.

Reduce Insurance Costs

You probably use many risk manage-ment techniques without identifying them as such. For example, you wear a seatbelt when you drive. That’s a risk management technique known as prevention.

Your office building might have sprinkler heads at regular intervals on the ceiling. This is another risk management tech-nique known as reduction.

There are probably other risk management techniques that you haven’t implemented just because you haven’t had the time to examine the possibilities.

How does risk
management save
you money?

It reduces losses and the expenses of co-insurance, deductibles, and excess of coverage. It improves your insurance profile, making you more attractive to insurance companies and lowering your premiums. It also minimizes productivity losses from injuries or physical plant damage.

You can find other risk management ideas for your business from trade journals, local business associations, your suppliers, and trade associations. But don’t overlook your best source – us! We can advise you on techniques that will significantly improve the availability and pricing of your insurance program.

What's a Hard Market?

Insurance pricing and underwriting have traditionally followed a cycle. In a “soft market” insurance carriers find highly favorable conditions for underwriting. As a result, prices tend to fall and cov-erages available to the average insured become broader.

A “hard market” is the opposite. Condi-tions for underwriting insurance profitably become more difficult, prices rise, and coverages become narrower and tougher to obtain.

With the exception of certain coverages, the insurance marketplace has been soft since the mid-1980s. Now, however, increasing litigation, rising medical costs, and tougher worldwide economic conditions have combined to push the marketplace into a much harder mode.

This hard market eventually will pass. But in the meantime, some coverages will probably become even more difficult to find and pricing will continue to rise.

How can you successfully navigate any insurance marketplace, hard or soft? Consult a professional insurance agent trained to find you the best solutions for your needs. Especially in a hard market, it’s essential to have someone you can trust to seek out the combination of coverages and pricing that best meets the needs of your business.

We’re looking out for you. Give us a call with any concerns about this tougher economy and its effect on your insur-ance protection.

Natural Disaster Resources

Business owners need to apply preventative measures to reduce losses from a natural disaster. The Institute for Business and Home Safety offers a superb resource for information.

http://www.ibhs.org/

IBHS is a non-profit education initiative of the insurance industry created to reduce deaths, injuries, property damage, economic losses and human suffering caused by natural disasters.

The recently upgraded site maintains:

• A series of retrofit guides and manuals that can help homes and businesses survive natural disasters.
   
• Property protection tips
   
• Extensive search functions in the site’s online library and building code sections
   
• News briefs with links to relevant content.

Subscribers can also request e-mail notification of new material on specific topics.