Gendelman Insurance Newsletters

Too Few Businesses Are Covered for EPL

A recent survey by Assurex International shows that only 48% of the U.S. employers it surveyed have Employment Practices Liability (EPL) insurance. Although these companies said that they're aware of the threat of employee lawsuits based on such charges as discrimination (age, race, sex, and so on), unlawful termination, unfair hiring, and harassment - they're neglecting to purchase the most important protection against the large financial losses this kind of litigation can cause.

About one-third of the businesses surveyed had fewer than 75 full- and part-time employees, a third had 75 to 150, and another third had more than 150. Many of them are trying to prevent EPL lawsuits. The survey showed:

All of these are sound loss-control procedures - but loss control is not insurance.

Beware: The Employers Liability portion of your Workers Compensation policy (Coverage B) is not EPL insurance and doesn't cover the same risks. This section addresses lawsuits against the employer for most physical injuries not covered by the Workers Compensation (Coverage A) portion of the policy. Coverage A will pay for medical care, disability, rehabilitation for bodily injury by accident or disease, or death sustained by an employee on the job.

EPL insurance, on the other hand, usually pays damages and defense costs for employment-practices lawsuits. Without it, a company must pay this expense on its own - even if its done nothing wrong and can prove it. Being right doesn't reduce the costs of defending yourself!

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Nontraditional Work Arrangements Growing

A nationwide survey of 1,000 large firms by Buck Consultants, New York-based human resources consultants, shows that many firms are looking into nontraditional work arrangements. Some 41% are considering work-at-home policies, 38% telecommuting set-ups, and 29% job sharing. About two in 10 said that they're already using some of these alternatives.

Other kinds of nontraditional work schedules that companies are providing or considering include flex-time and part-time off plans (which combine vacation, holidays, and sick time).

If you're considering these kinds of arrangements, check with us first to see if any of them require a new look at your insurance structure. Telecommuting, for example, could affect your Liability and Workers Compensation coverage.

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The Business Owners policy (BOP) is a combination Property, Liability, and Business Interruption policy for small and medium-size businesses. It's often advantageous to owners of smaller businesses because it contains necessary coverage's, can be endorsed for additional protection, and is often less expensive than similar coverage in a Commercial General Liability policy. Recent changes have allowed many more businesses to be eligible for a BOP. For mercantile, service-based, office-based, and wholesale businesses: Maximum area has been expanded from 15,000 square feet to 25,000 square feet. Maximum gross have sales been increased from $2 million to $3 million. Four new classes of business are now eligible for the BOP: Contractors Some cooking and fast food restaurants Convenience stores with gasoline pumps Laundry and dry-cleaning operations Restaurants eligible for a BOP now include most fast-food operations, such as concession stands and snack bars; places with limited cooking, such as coffee shops, cafes, delicatessens, sandwich shops, and donut shops; ice cream and yogurt stores, and pizza shops, salad bars, and most takeout restaurants. Eligible restaurants can have a maximum of 7,500 square feet, and gross sales are capped at $1 million. Any business located in a building that is also occupied by a manufacturer or other non-eligible business is not eligible for the standard BOP. Restaurants at places of amusement are also ineligible. Of course, different companies offer different BOPs. Check with us to see if these changes affect your policy.

Contractors covered by the new include (hut arc not limited to): Installation, servicing, or repair of air-conditioning systems/equipment or appliances and accessories Carpentry in construction of residential property not exceeding three stories Interior carpentry Carpet, rug, furniture, and upholstery cleaning on customers premises Driveway, parking area, or sidewalk paving Drywall installation Some electrician work Fencing Some floor-covering installation Installation of furniture or fixtures in offices or stores Glass dealing and glazier work Insulating Interior decorating Some landscape gardening Masonry Painting, paperhanging, and plaster or stucco work Plumbing Residential roofing Septic tank maintenance Window cleaning

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Tis the Season to Watch Your Inventory

With the holidays coming up, many businesses, especially retailers, greatly expand their inventory. Without extra protection for such an increase, business owners face the possibility of an uninsured (or underinsured) loss.

Some Yuletide fires are not so warm and friendly! If a fire breaks out on your premises, for example, your insurance may cover only your usual amount of inventory, not the additional stock.

A seasonal increase provision in many Business owners policies (BOPs) allows an automatic 25% increase in the inventory insured by its Business Personal Property coverage to take care of seasonal or abnormal increases in stock values. For an extra premium, you can obtain an endorsement to increase this amount beyond 25%.

Some businesses, however, may need the increased protection provided by a Commercial Package rather than a BOP. The basic Commercial Package provisions don't cover increases in inventory automatically, as many BOPs do, but the Peak Season endorsement it offers may be better for certain situations than the endorsement available under the BOP. It's especially useful for companies that experience large fluctuations in their inventory at certain times of the year. There are several kinds of these endorsements and we can find the right one for your specific situation.

Depending on what kind of policy you have, you may be able to save some money by reporting your inventory's value every month. You would want to do this only when your inventory situation warrants it.

Let us know about your fluctuating inventory. Together, we can find you the strongest and most cost-effective protection for your particular situation.

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What We're Thinking About Y2K A recent Gallup poll sponsored by the National Science Foundation shows that as Americans become more aware of Y2K problems, some of our concerns have lessened while others have grown. In the most recent poll, 56% of respondents said they've heard of the Y2K computer problem (up from 39% last December), and only 21% now expect major problems in 2000 (up from 15%). About 21% said they think that problems will last only a few days around the first of the year. A higher percentage said they'll avoid plane travel around January 1 54% as opposed to 47% in December. A full 24% now say they'll buy a generator or a wood stove up from 17% in December. Many of those polled say that they're concerned about the security of their financial accounts, with 55% still saying they think it's likely that banking and accounting computer systems will fail. Other questions revealed that 43% believe the air traffic-control system will probably fail, and 40% expect grocery and other store shortages. WWW: Your Access to Ground You can employ software to block non-work-related sites on the Internet from anyone using your company's computers - and it may be to your advantage to do so. Besides reducing Internet expenses, these restrictions can cut down on the time your employees might waste on non-company matters. Are you worried that someone might consider this action an infringement on free speech? Don't be. The constitution bars government entities, not private business, from limiting free speech. Any programs or devices you employ to cordon off certain sites from your employees are perfectly legal.

Directors And Officers: Look Out for Y2K Directors, officers, board members, and senior executives could face charges of personal liability if they fail to exercise reasonable business judgment to prevent Year 2000 (Y2K) problems from adversely affecting their customers, suppliers, subcontractors, stockholders, employees, or other business associates. The good news: Companies that work with their customers, suppliers, and subcontractors to prevent possible Y2K problems will reduce their liability exposure if they do it in a timely manner. Officers and directors should always be aware of anything that could interfere with the company's operations or expose it to losses or lawsuits - Y2K-related or not. Insurance carriers should be notified of possible claims at the earliest opportunity. Meanwhile, make sure your Directors & Officers Liability insurance (D&O) is up to date and sufficient to cover your risks. Unless it contains a Y2K exclusion, this policy may cover some problems related to the Millennium Bug. Check with us.

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The Health of Small business

The number of American workers who lack Health insurance and employer-provided pension plans has been increasing, according to Business Week magazine. Part of the reason is that fewer small businesses provide insurance and pensions.

About 29% of U.S. small businesses offered Health Care benefits last year, compared with 46% in 1996. The U.S. population with no insurance rose from 15.6% in 1996 to 16.1% in 1997. In 1998, 19% of small businesses offered retirement benefits to their employees - down from 28% in 1996.
Small businesses account for half of private-sector employment.

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If you've heard all the stories about repetitive-motion injuries (RPIs), you may think that office workers are its primary victims. Not so. The U.S. Bureau of Labor Statistics said that in 1997 (the latest year for which data is available), repetitive typing or data-entry jobs continued to constitute just 0.6% (11,600 cases) of a total 1,833,380 injuries and illnesses requiring time away from work. The numbers were pretty much the same in 1996.

Nearly half of the total RPI cases - 47.7% - occurred in manufacturing jobs , according to the Bureau. Workers with the highest risk of RPIs included: