Protecting Your Company’s Secrets

n today's information age, many companies fear losing trade secrets or other proprietary information. The loss can occur in many ways. Secrets might be leaked by a key employee who goes to work for a competitor, or they might be stolen by a hacker. Even though you have legal protection from this type of loss – thanks to the passage of the Economic Espionage Act in 1996 – you need to fulfill the requirements of the act before the feds will get involved.

The difficult part is meeting the legal definition of a “trade secret.” In that regard, corporate information must meet a specific set of criteria to qualify as a trade secret. For the most part, you need to accomplish six steps:

• Assess the availability of the information outside the company.
• Record who inside the company has the information.
• Institute a means to protect the secrecy of the information.
• Establish the value of the information.
• Quantify the time and effort the company put into developing the information.
• Determine if much of the information could be properly and easily acquired or duplicated by others.

Emergency Phones in the Workplace

The Americans with Disabilities Act of 1990 (ADA) has had a significant impact on how businesses deal with disabled persons. Everything from walkways to means of egress to restrooms to parking now must be ADA compliant.

There is, however, one area that has received very little attention. That is the need for emergency phones to be available to everyone. If your business has not yet made this move, you’re not alone. While the ADA does not provide a specific requirement, they do say that emergency phones should be available for everyone to use, regardless of disability.

One of the reasons for the lack of response is confusion over what a proper system is. Phones for the disabled should include built-in dialers, a device that communicates the user's location to the person answering the phone, and visual notification to the caller that the call has been received.

These requirements usually can be met with digital ID and voice ID, both of which let the person answering the phone determine the location of the caller. There are a number of phone systems available that provide the basic system requirements. Many also provide advanced features such as automatic redial, voice announcer, operating temperature, polling features and weather resistance. Research into available options is strongly recommended.

Here are some suggestions to maintain high productivity without sacrificing the technology:

• Draft and publish an Internet usage policy (Acceptable Use Policy).
• Issue each employee with Internet access a copy of the policy.
• Provide separate login identification for each employee with Internet access.
• Make certain all employees with computer access realize that their Internet movements are not secret.

Spammer Gets His Day in Court

Washington State’s landmark law aimed at curbing the use of unsolicited commercial e-mail, commonly known as “spam,” has withstood a State Supreme Court challenge. The State’s Attorney General now can proceed with a pending case against an Oregon man accused of spamming millions of people. In a bit of irony, the Oregon man's e-mails were promoting a book he wrote that taught people how to use spam for profit.

Washington’s new anti-spam law is designed to prohibit the sending of commercial e-mails that contain misleading information in the subject line or use a bogus return address. The law allows fines of up to $2,000 per violation. It also lets consumers and Internet service providers sue and collect as much as $500 and $1,000 per violation, respectively.

The tough anti-spam bill has been hailed by business groups who are tired of having to clear their e-mail boxes of hundreds of unsolicited
e-mails daily. Scott Mueller, chairman of the Coalition Against Unsolicited Commercial E-Mail (CAUCE) notes, however, that “the nature of spam ensures that the problem will continue as long as the Congress delays passage of federal anti-spam laws.”

Moreover, financial service companies are concerned that anti-spam
laws might restrict communications between banks and their customers.
Regardless of who wins this debate, the fact that Washington’s law has been upheld could mean that other states and even the federal government may be spurred to take action. Stay tuned.

Insuring Improvements

Many companies today rent premises from a third party – a warehouse for extra finished goods or a retail sales outlet in a strip mall, for example. Frequently those companies end up modifying the premises to suit their specific needs. These betterments and/or improvements normally become the property of the landlord, regardless of who purchased and paid for the actual work. However, the issue of insuring the betterments and/or improvements is unresolved by this legal
ownership.

Insurance coverage for this improvement is normally an issue that is determined by the lease provisions. The logical approach would be to have the landlord include the value of the improvements in with his or her overall building values. If the landlord does assume responsibility for insuring the improvements, you also will want to modify the lease provisions to require the landlord to repair or replace the improvements if they are damaged or destroyed.

However, if the landlord is unwilling to purchase the coverage and modify the lease provisions, you will need to purchase the insurance protection. In this case, have the value of the improvements added to your commercial property policy and make certain that your property policy covers your “use interest as tenant” in any improvements. You also will want to make certain that a loss to the improvements will be paid on a replacement cost basis. Most policies, however, will convert to an actual cash value basis if repairs are not promptly completed.

Our agency can assist you in this important area. Make certain that you have the protection you need. Give us
a call.

Power Outages: Are You Ready?

Many energy experts predict that more states and, as a result, more businesses across the U.S. will be facing energy shortages for quite some time. Unfortunately, “fixes” to the problem take time, and, if decisive action is not taken soon, this problem could extend well into the next few years.

As business owners, there are steps you can take now to protect your company against blackouts and/or voluntary power cutbacks. You should develop a business continuity plan to help assess the possible effects of power outages. The plan will formalize your strategy to respond quickly to emergencies while maintaining customer service. In the plan, you need to:

• Develop a communication system to maintain contact with staff and customers in the event of an outage.
• Identify a source for emergency lighting and power resources, such as emergency generators.
• Address facility issues such as site security, evacuation and safety procedures.
• Implement a formal shutdown procedure for all equipment.
• Protect equipment from loss of power, surges and voltage fluctuations.
• Coordinate activities with local law enforcement, fire and other emergency services.

Make certain to test the strategies that are developed. Find out now if your insurance policy will cover a prolonged power outage. Give us a call so that we can review this important aspect of your insurance
protection.

Disaster Pre-Planning Helps

While it is impossible to completely protect against the consequences of natural disasters, having a properly designed disaster-recovery plan can greatly reduce the disruption caused by a disaster. Common elements:

• Risk Assessment. Complete an assessment of your business to determine potential damage from natural disasters.
• Processing and Operations Priorities. Develop plans to handle the critical needs of your organization.
• Recovery Team. Develop a list of employees (and their skills) who can be mobilized in the event of disaster.
• Data Collection. Review computer
  hardware and software requirements, including backup for essential records and replacements.
• Recovery Procedures. Outline the procedures and identify those individuals that will perform each task.
• Test the Plan. Make certain that the plan works by performing drills throughout the year.

Copies of a company’s disaster recovery plan should be provided to key management personnel. And copies should be available at offsite storage facilities and should be filed with the local fire department and other emergency facilities so they know what to expect.

By taking appropriate steps, you can greatly improve your company's chance for a quick return to business following a disaster

Beware of Punitive Damages

The U.S. Court System has utilized the concept of punitive damages for years. The concept is quite simple: For companies found guilty of egregious crimes, the courts can assess an additional amount of compensation to be awarded to a plaintiff as punishment for those acts, over and above the normal monetary settlement.

Two highly visible cases have brought the “egregious” clause of the law into the spotlight.

• Stella Liebeck became world-famous when a court awarded her $2.7 million in punitive damages. Liebeck suffered third-degree burns when she attempted to remove a lid from a cup of coffee and it spilled in her lap.
• Almost as well known was a $4 million punitive damage award in BMW of North America v. Gore. In this case, the award was made because BMW did not advise Gore that it repainted a section of his new BMW that was damaged in shipping.

Is there a solution to these punitive damage problems?

One option to which a number of insurance experts point is alternative dispute resolution (ADR). The ADR approach offers a number of advantages for the defendant. These include flexibility, lower transactional costs and potentially swift resolution. The most important benefit to the defendant, however, is confidentiality: ADR settlements are not made public and, thus, cut down on adverse publicity. While not all situations lend themselves to an ADR approach, most cases could be settled this way.

We will be happy to review your general liability policy. Just give us
a call.

Are You Liable for Someone Else’s Acts?

Business owners face an emerging exposure involving liability for criminal acts of others that occur on your property.

Tort law has found that business owners have a duty to protect customers and visitors against unreasonable risk of physical harm. While all businesses have this risk, common targets are apartment buildings, hotels/motels, and retail stores.

Obviously, the key to mitigating this exposure is to take measures to prevent foreseeable incidents. But this isn't easy. As the owner, you cannot be held liable for a crime-related loss unless you breach the duty to protect, and that breach becomes the “proximate cause” of the injury. The courts now have determined circumstances are foreseeable if a prior, similar incident has occurred.

The courts also have established liability if the “totality of circumstances” indicates you could have anticipated the injury. The "totality" issue would include such things as crime rate of the surrounding area, past complaints, etc.

These losses normally are covered by premises liability coverage. But they can be quite expensive, so it's clear that adequate insurance limits are critical. We’ll be glad to review your current program.