Pay As You Go Workers Compensation

pay as you go workers compensationPay as you go workers compensation (sometimes called “pay as you owe”) helps smooth the audit process and provides cash flow to the business.

Workers compensation premiums are calculated by multiplying the rate by each one hundred dollars in payroll. Historically, workers compensation premiums were estimated in the beginning of the policy year; and audited for accuracy at the end of the policy year.

As a result of this estimate and audit process, sometimes a business would tie up capital on overpaid premiums to receive a return months later; and sometimes a firm would receive a large audit bill, followed by an increase in the then current year’s workers compensation.

Unless the business is very predictable, these audits were difficult to budget.

Pay as you go workers compensation contemplates this issue and offers an option to pay premium based on actual payroll. The business, or more often, their payroll service, sums payrolls in each class and either applies the rate or sends the payroll figures directly to the company for billing.

The business knows its workers compensation cost for that pay period immediately and with a great deal more accuracy. Budgeting is as easy as payroll budgeting since the two are tied together.

An audit will be conducted at the end of the year, but the effects should be much smaller.

Who should use pay as you go?

* Businesses with seasonal income and payroll so expenses tie to income more easily and
budgeting is easier.

* Businesses with large payrolls which benefit from the cash flow of this system.

* Businesses which assign payroll to different jobs to more easily tie payroll
expenses to specific sites.

At Mason & Mason, we work with several insurance companies that offer pay as you go Workers Compensation. If this is an option that appeals to you, give us a call. We can help you find a policy that provides comprehensive coverage that works for you.

Singing in the Rain

umbrella liabilityI love that scene from the 1952 classic “Singing in the Rain” where Gene Kelly belts out the title song while twirling an umbrella, splashing through puddles and getting soaked to the skin. I recently discovered that he was actually ill during the filming of that sequence – with a fever of 103! You know what they say… “The show must go on!”

The same is true for your business. Unfortunate circumstances come into our lives, and we must deal with them. Life doesn’t stop just because it would be convenient for us, does it? Enter the Umbrella policy.

What do umbrella policies do?

Insurance professionals can’t help themselves. We rely on wonk-ish diatribes to describe umbrella policies because they are technical in nature.

So let’s try to simplify.

Most companies buy insurance because they are required by law. Workers’ compensation and automobile liability allow companies to hire employees and use public highways. If they own property, their lender requires insurance. If the company leases space, the landlord requires premises liability.

But the real reason to buy insurance: trade a known loss (premiums) for unknown losses (claims). Your company can budget for the acceptable level of known loss which protects against normal, everyday losses associated with entrepreneurship.

With an umbrella policy, you’re buying catastrophic loss coverage for imaginable claims. Imagine the multi-passenger near fatal car wreck or the nightmare products liability claim that costs millions in damages.

You’re also buying coverage for unimaginable claims. Claims not covered by your automobile, general or employer’s liability:

  • Do you promote your company through social media? Libel and slander losses are covered by personal injury liability, usually excluded in general liability policies, usually covered on umbrellas.
  • Do you send employees out of the country? The stated territories for coverage under standard general and automobile insurance is the United States and Canada. For umbrellas, it’s worldwide. Now, some umbrellas specifically expand territory language to include “anywhere” because of commercial space travel.
  • Any possible sexual harassment in your organization? Again, usually excluded by general liability, but included under umbrella coverage.

These examples of rare occurrences give a taste of the importance of umbrella liability. Your company can be blindsided by large liability claims that are not anticipated by your typical liability coverage. Broaden the territory, widen the safety net, spend a little more premium, get more peace of mind.

Trade a little more known loss, your umbrella premium, for a lot of protection against the unimaginable loss. Then you too will be able to sing in the rain.

Data Breach – You’ve Been Hacked. Now What?

No matter how prepared you are – or you THINK you are – you can still suffer a cyber-security  data breach. According to a recent report released by the Online Trust Alliance, over 740 million records were exposed in 2013 alone, making it the worst year for data breaches to date. What you do next can have a profound impact on the reputation of the business, customer loyalty, employee morale, and, ultimately, your bottom line.

An effective communication strategy should follow these guidelines:

  1. data breachNotify key regulatory and legal authorities as soon as possible, unless this might impede a criminal investigation. Even if notification isn’t required by law, it’s an important courtesy.
  2. Make sure that staff roles and responsibilities for communicating the data breach are outlined and understood clearly.
  3. Tailor the notification process to the audience – high-value customers, senior employees, or individuals who might be particularly vulnerable (such as the elderly, the disabled, and minors) and to the nature of the breach; Handle the theft of confidential client information differently than the stealing of employees’ Social Security numbers.
  4. Have legal counsel review the method and content of all communications.
  5. Prepare for media inquiries to deliver a clear message for parties affected directly or indirectly. Be sure that your spokesperson is qualified and trained to deal with the media.
  6. Provide ways for victims of the data breach to ask additional questions and/or learn how to minimize potential harm.
  7. Test the plan: If you had to execute it, how well did it work, and how did you update it? Many businesses have discovered holes in their response plans after failing to consider the impact of a cyber security data breach on daily operations, or underestimating the attention the event drew.

To learn more about spreading the word after a data breach, please get in touch with us.

In The Cloud? Protect Your Data

the cloudMore and more businesses are storing data on off-site service providers (known collectively as “the cloud”) to reduce costs and boost efficiency. However, many companies either don’t realize how vulnerable this information is, or don’t have contracts that make third-party cloud providers responsible for lost, stolen, or corrupted data. Check out five of the top data breaches of 2013 here.

If there’s a data breach when you’re using cloud-based services, who should be held responsible? Storing software and/or databases on the servers of a cloud provider with shared infrastructure immediately eliminates many of your cyber security controls. Backing up data in multiple locations increases the likelihood that it will survive, but also raises the odds of a data breach. What’s more, shared infrastructure can leave this information exposed to malware or other computer viruses.

What about connectivity? After all, your cloud provider can’t guarantee that you’ll have access 100% of the time. If the remote server goes down or there’s a data breach, how long might it be before you’re able to restore operations? How might such an incident affect your company’s reputation, and its financial position?

An effective Cyber insurance policy can reduce these risks significantly by:

  1. Allowing you to limit the spread of sensitive or confidential information by reacting to cyber extortion as soon as possible
  2. Notifying your clients that their data has been lost
  3. Hiring a PR firm to get out the message to clients about the measures your company is taking to prevent future breaches
  4. Providing the ability to set up a data center
  5. Reimbursing customers and clients for confidential information compromised by the breach

Our agency can help you select comprehensive coverage that can protect your data in the cloud. Give us a call today.

Target Security Breach – Wake Up Call

security breachThe security breach of customer data at Target Corp. during the recent holiday season underscores the growing threat of cyber theft to retail businesses.

Between last November 27 and December 15, hackers stole data on up to 110 million debit and credit cards from customers of Target, the nation’s second largest discount store. The security breach occurred when a virus infected the company’s point-of-sale terminals throughout the chain, compromising debit and credit cards account numbers, expiration dates, cardholder names, e=mail addresses, home addresses, phone numbers, and credit verification value – information that bad guys have used to make counterfeit credit cards.

Immediately after a third party discovered the security breach, the retail giant: 1) alerted the relevant authorities and banks; 2) partnered with a forensics firm to investigate the crime; and 3) warned recent customers to monitor suspicious bank account activity, and contact the Federal Trade Commission and credit card monitoring systems portals. Said Chief Executive Officer Gregg Steinhafel, “Target’s first priority is preserving the trust of our guests, and we have moved swiftly to address this issue, so guests can shop with confidence.”

The company fended off thousands of complaints from customers about fraudulent charges on their credit cards and bank accounts, as well as dealing with a significant number of class action lawsuits alleging invasion of privacy.

Although it’s too early to put a price tag on the security breach, in 2009 retailer T.J. Maxx paid $9.7 million in a settlement with 41 U.S. states over the loss of customer data after hackers stole information on 45.7 million credit and debit cards two years earlier.

The Target data breach offers a stark reminder of why your business needs to protect confidential customer information – and to carry Cyber Liability insurance.

We’d be happy to help the cause. Just give us a call.

Internal Fraud – Fight Back!

An industry seminar on fraud risk, prevention and response, found 778 internal fraud cases in 2012  (more than two a day!) These scams included fake billing, corruption, and expense reimbursement.

Although the companies affected suffered minimal losses in more than half of these cases, their headaches came from private civil claims, potential government investigations, criminal prosecutions, and bad publicity.

Fraud can be uncovered by everything from employee tip-offs and management reviews to internal audits and even “gut” feelings by an experienced observer.

If you’ve been scammed from the inside, start with a prompt and thorough internal investigation. Gather the facts, preserve evidence, assess legal repercussions, and take corrective action – before an outside authority does. Being the first to report the incident to the government can take the sting out of an official probe.

internal fraud
To correct the situation you should:

1) make amends to the victims

2) revamp corporate-compliance programs

3) strengthen internal controls. Make sure that these actions are tangible and specific.
Consider offering substantial financial incentives to employees who might suspect that something fishy is going on, but may not want to get involved.

Lastly, insurance can help protect your business from the loss of money, securities, and inventory resulting from employee dishonesty. For example, Fidelity and Crime coverage usually includes property theft, losses due to forgery, and electronic wire transfer fraud.

Your insurance program should include a cyber policy. A recent court decision expands coverage of cyber losses under fidelity bonds. Damian Brew, managing director of Marsh’s FINPRO practice warns, “Having insurance coverage without cyber insurance is like playing hockey without a goalie.”

Our business insurance professionals would be happy to review your internal fraud-control program. Just give us a call.

Walt Disney, Magical Advice for Business (and Life)

Walt DisneyIn the world of entertainment, perhaps no name is more widely known than that of Walter Elias Disney. Today marks the 112th anniversary of his birth, and has me reflecting on the impact this great man – the Magic behind the Kingdom of creativity – has had on our world. He was such an influential innovator and entrepreneur in his day, and even now, he is teaching still. Using some quotes from the legend himself, here are a few of the lessons I’ve learned from Walt Disney – about business, and life.

Dream big.

“All our dreams can come true if we have the courage to pursue them.”

What would you do if your dreams had no limits? Don’t let your comfort zone hold you back from where your dreams would take you. We have so many fears – fear of the unknown, fear of not being good enough, fear of what others may think, fear of failure. Insurance can mitigate many risks, and often we fear something that will never happen. If you have a dream, chase it. Find a way to make it happen and above all, don’t let anyone else limit your dreams.

Communicate your vision.

“Of all the things I’ve done, the most vital is coordinating those who work with me and aiming their efforts at a certain goal… you can design and create and build the most wonderful place in the world. But it takes people to make the dream a reality.”

You have a vision. Success in bringing your dream to life is directly related to how effectively you communicate that vision to the people you work with. According to a study published in Claremont McKenna College’s Leadership Review, when leaders discuss their organizations’ vision in a specific way, not only is the vision better understood, the leaders are also seen as being more effective in general. Want to have people who are as invested in your dream as you are? Communicate your vision with clarity and passion.

Send the right message.

“Disneyland is a show.”

What kind of experience are you providing for your clients? Remember that everything you do (and everything you don’t!) is communicating a message. From your voicemail greeting right down to delivering your product or service to the consumer, all of it is speaking for you. Make sure it’s saying the right thing.

Embrace your setbacks.

“Everyone falls down. Getting back up is how you learn to walk… all the adversity I’ve had in my life, all my troubles and obstacles, have strengthened me… you may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you.”

Don’t waste any experience. Difficult circumstances hold within them lessons to be learned. Often what we perceive as a negative situation can become a catalyst for personal and professional growth. Take the experiential wisdom gained with setbacks and carry it with you into the future. You (and your business) will be better for it.

Just do it.

“The way to get started is to quit talking and begin doing.”

I don’t know about you, but I have a lot on my plate… and I don’t have a magician’s apprentice to help me get it all done. At times it can be overwhelming. Taking a cue from Disney, if you’re obsessing about a massive to-do list, it’s time to stop thinking stressing about everything in front of you and

Aspire to Excellence

“Whatever you do, do it well. Do it so well that when people see you do it they will want to come back and see you do it again and they will want to bring others and show them how well you do what you do.”

Yeah. What HE said. :-)

How about you? Do you have a favorite Walt Disney quote? We’re discussing today over at our facebook page. Join us!




HO HO HO Host Liquor Liability

host liquor liabilityThe holidays are almost upon us and alcohol will be flowing at company parties throughout the land. Beware! If an employee or guest gets inebriated at a social function sponsored by your business and then injures another person, you could be held liable. It’s time to take a look at Host Liquor Liability.

Consider this scenario: After polishing off four eggnogs in an hour at the company’s Christmas party, one of your workers toddles off to his car. The employee almost makes it home when he runs a red light and T-bones a car. The car is damaged and injures the driver. The driver then sues your business for negligence in allowing the employee to drive home although he was clearly “under the influence” at the company party.

What’s more, under state and local “social host” laws, your business might face a fine or even imprisonment for continuing to serve alcohol to an adult who is legally drunk.

Under your comprehensive general liability policy is a clause for host liquor liability. The insurance company will pick up the tab for property damage and bodily injuries, up to “each occurrence” or “general aggregate” limits for the CGL. This coverage will also pay for court costs, legal fees, and other expenses – and these payments will not apply to the limits.

Be sure not to confuse host liquor liability insurance with Liquor Liability coverage, which protects businesses that manufacture, serve, or sell alcoholic beverages (such as liquor stores, bars, and taverns) against claims for injuries caused by intoxicated customers. If you’re in one of these businesses, you’ll need both types of policy.

To learn more, feel free to get in touch with our agency at any time.

Is There an App for That?

mobile appsThe global market for mobile application technology should top $25 billion by 2015. If you’d like to get a piece of this action by developing and marketing an app, experts recommend that you take these steps:

  1. Follow the rules. Starting any business requires following a series of steps (from registration to hiring employees). These 10 Steps to Starting a Business will help you check all the necessary boxes.
  2. Expect to be monitored. Apps come under intense scrutiny. Negative reviews from consumers and experts, complaints, and horror stories can be fatal. Although regulation of the mobile market is in its infancy, online apps fall under the scrutiny of truth-in-advertising and data privacy laws regulated by theFederal Trade Commission’s (FTC) Bureau of Consumer Protection.
  3. Disclose all charges up front. Developing a custom app can be costly. If you try to recoup some of this investment by charging users, state these fees clearly and completely. Full disclosure is essential if children will use your app. If parents learn their child has racked-up unauthorized fees because your policy wasn’t clear, you’ll face a customer relations nightmare.
  4. Develop and communicate your privacy policy. The Future of Privacy Forum Application Developer Responsible Data Use Project found that 22 of the 30 top apps lacked any such policy. Many privacy policy generators available online give app developers options for customizing their policies. If your target market includes children, check the Children’s Online Privacy Protection Act, which governs information that online businesses (and mobile apps) collect about children 13 years or younger.
  5. Consult a lawyer. Because every app start-up is unique, get advice from an attorney who specializes in privacy and consumer protection law.

Good luck!

Home-based Businesses = Opportunity (and Risk)

Home-based businesses offer entrepreneurs significant cost savings, such as eliminating the expense of commercial space and commuting. However, when it comes to buying insurance, too many of these owners are short-changing themselves – and putting their investment at risk.

A recent survey by the Independent Insurance Agents & Brokers of America (IIABA) found that nearly 60% of the nation’s 11 million home-based businesses don’t have insurance. Of those entrepreneurs, nearly 40% thought that their Homeowners policy protects them from business-related risks, while almost 30% said their businesses were too small to insure.

According to IIABA Vice President of Education and Research Madelyn Flannagan, owners of home-based businesses face significant financial losses from theft, accidental damage, natural disasters, vehicle accidents, and liability (for example, if an employee is injured on the job). Homeowners insurance usually does not cover these risks, warns Flanagan.

To help entrepreneurs protect their home-based businesses, IIABA offers these guidelines:

Home-based businessesReview your Homeowners policy. Coverage for certain business items is limited and does not provide Liability insurance for home-based businesses. What’s more, the standard Homeowners policy does not include Business Interruption coverage, which reimburses you if a loss causes your home business to cease operations. However, you might be able to add these coverages to your policy by endorsement.

Consider business insurance. You have several options including an Incidental Business Endorsement, a business owners package (BOP) or an In-Home Business Owners policy.

Protect yourself. If your home-based business is a full-time occupation, you need Life, Health, and Disability insurance, as well as Workers Compensation.

The bottom line: An investment in insurance can provide security and peace of mind as your home-based business grows.

For more information, feel free to get in touch with us at any time.