If your business rents an office, store, warehouse, or other commercial premises, you’re responsible for any property you use or store there, as well any damage you cause to the rented property. Commercial Renters insurance (also known as Business or Commercial Property coverage) will repay you if your equipment or stock is stolen or damaged, or if you damage the premises inadvertently.
Some Commercial Renters policies also provide limited protection for possessions of your employees on premises. You might also want to buy additional coverage for flood damage, and/or glass windows and displays, as well as Business Interruption insurance (which will reimburse you if fire or theft keeps you from operating).
The premium depends on the risk factors facing your business. For example, the risk of fire depends upon how the premises you’re renting is constructed, whether it has a sprinkler system, and its distance from the nearest fire station. If you rent in a high-crime area or have particularly valuable or desirable inventory or equipment, you’ll pay a higher premium.
You can reduce the premium by increasing your deductible and/or installing fire and theft alarms and other safety devices.
When insuring equipment and inventory, you can choose either replacement cost or present value coverage. Replacement cost, which is more expensive, will reimburse you for the full cost of buying new items. Present value reduces your reimbursement by calculating depreciation based on the age of the property.
If you run a home business from a rented dwelling, see if your Renters insurance covers property and liability for business activities. Although most policies don’t include this, you can obtain coverage through a policy rider.
To learn more, just give us a call at any time.
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The ammonium nitrate fertilizer plant in West, Texas that exploded last April had only $1 million in Liability insurance, which could cover as little as one percent of the estimated damage from the blast.
What’s more, according to an attorney for Adair Grain, Inc., which owns the West Fertilizer Co. the company did not carry Excess or Umbrella coverage.
The explosion occurred on April 17, killing 15 people (including 10 first responders), and injuring more than 200 others The blast, which left a 90-foot wide crater and registered on the Richter earthquake scale,, damaged or destroyed more than 150 buildings up to nearly 40 blocks away. A spokeswoman from the state insurance department estimated that damage could cost tens of millions of dollars, adding that other sources have pegged potential losses as high as $100 million.
At least six lawsuits representing hundreds of plaintiffs have been filed against the company and its owner. One of the plaintiffs’ attorneys, Randy Roberts, says that even though he was “floored” by the low level of West Fertilizer’s Liability coverage, “It’s not uncommon to see very serious operations [in Texas] conducted with minimum insurance or, in fact, no insurance.”
He expects that Adair will ask a judge to divide the $1 million in Liability coverage among the plaintiffs, and then file for bankruptcy – after which attorneys will look to see if other companies can be held liable for the explosion. “I don’t see the million taking care of even my three clients, much less the hundreds of people that need to be taken of,” says Roberts.
This disaster reinforces the need to make sure that you carry enough Liability coverage to protect your business against a worst-case scenario. As always, our Scurich Insurance Services Representatives are standing by ready to help.
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Who Benefits: Intern Or Company?
Although courts will use these factors to analyze a worker’s status, they don’t necessarily weigh all them equally. In fact, judges will often find that the most important criterion for determining whether someone is subject to the FLSA involves which party enjoys the primary benefit from the internship.
Essentially, if the intern benefits primarily from the arrangement, she will be considered a volunteer, rather than a paid employee. However, if the company is the primary beneficiary of the intern’s work experience, this person will be considered an employee who must be paid at least the minimum wage.
In one case involving a company’s use of trainees, McLaughlin v. Ensley, the Fourth U.S. Circuit Court of Appeals held that the owner of a snack foods distribution business had to pay trainees for route jobs. Before being formally hired for such a job, trainees were required to participate in what was usually five days of exposure to the tasks they would be expected to perform. They traveled an ordinary route with an experienced route man, loaded and unloaded the delivery truck, received instruction on how to drive the truck, restocked stores with the employer’s product, were introduced to retailers, learned basic maintenance on snack food vending machines and occasionally helped prepare orders of goods with financial exchanges. However, the employer did not pay the trainees during their training week.
In determining whether this practice was legal, the Fourth Circuit explained that the key question involved whether the employer or the trainees received the principal benefit from the orientation. The court held that the employer enjoyed a greater advantage than the trainees because they were, in fact helping the company distribute snack foods. The skills they learned in training were either so specific to the job or so general that they had practically no transferable usefulness. As a result, the appeals court ruled that the trainees who participated in the orientation program were entitled to receive minimum wages.
Contact Scurich Insurance for more information!
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Now that summer season is here, it’s time to review your payment obligations to interns.
The DOL’s Test for Interns and Trainees
Although the Fair Labor Standards Act (FLSA) doesn’t define intern or provide an exemption from minimum wages or overtime for interns, it recognizes that not everyone who performs duties for an employer is an “employee,” and thus entitled to compensation under the wage and hour laws. Generally, the FLSA provides that if a company benefits from using interns, it must pay them at least minimum wage. However if the intern isn’t doing anything that directly benefits your company but is just observing or learning, you might be justified in not paying him or her.
Whether student interns are considered employees under the FLSA depends on the circumstances surrounding their duties and activities. The U.S. Department of Labor (DOL)uses a six-part test to distinguish interns or “trainees,” from employees:
- The training, even though it includes actual operation of the employer’s facilities, is similar to what would be offered in a vocational school.
- The primary benefit of the training is for the intern.
- The trainees don’t displace regular employees, but work under close observation.
- The employer derives no immediate advantage from the activities of the interns, which on occasion might actually be counterproductive.
- The intern is not guaranteed a permanent job at the end of the program.
- Both parties understand that the intern is not entitled to wages for the time spent in the internship.
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Fraud and embezzlement in the workplace has become an epidemic, costing American businesses an estimated $400 billion a year (6% of total revenues), according to The Association of Certified Fraud Examiners. Smaller firms are particularly vulnerable, because they’re less able than their larger counterparts to afford extensive safeguard or to absorb the losses. What’s more, one in four workers who rip off their employers have been with the company more than ten years.
Employee Dishonesty insurance can protect your business from financial loss due to the fraudulent activities of an employee or group of employees. This coverage is also called Crime Coverage, Employee Dishonesty Bond, Fidelity Bond, or Crime Fidelity insurance.
The policy applies to acts by all current and former employees, as well as partners, trustees, and directors, together with volunteers, seasonal employees, and temporary workers under your control. Covered losses can include: 1) theft, robbery, burglary or embezzlement of money, securities, or physical property of the business; 2) forgery or alteration; 3) fraudulent transfer of funds; 4) computer fraud; and 5) counterfeiting cash or money orders.
The amount of coverage you’ll need varies with the loss exposures your business faces. As a rule of thumb, companies that handle cash and securities, need at least 20% of their annual revenue in Minimum coverage for fraud and theft losses is usually $100,000 and many policies will cover $500,000 without significant additional premiums. You can also set specific coverage levels for depositor’s forgery, computer, and funds transfers.
Depending on your situation, you can buy Employee Dishonesty either on a stand-alone basis or as an add-on (endorsement) to your Business Owners policy or other Commercial insurance coverage.
For more information on protecting your business against light-fingered employees, just give us a call.
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You’re facing a deadline to complete work under a major contract – when a voltage spike surges through your electrical lines, burning out computers and telephone equipment. How would you pay for replacing or repairing the damaged equipment, taking the steps needed to get back in production, and replacing lost income?
In today’s high-tech electronic world, more and more companies are buying Equipment Breakdown policies (formerly known as Boiler & Machinery insurance) to protect themselves against losses from a variety of mishaps that are sometimes unpredictable and often unavoidable: everything from mechanical failure or electrical short circuits to “arcing” (faulty wiring or motor burnout. The rapid growth of Internet marketing and “just in time” inventory make businesses more dependent than ever on computers – while critical data often exists only on the Internet or online databases that can’t be accessed when equipment breaks down.
Depending on their size and sophistication, some businesses include this coverage in their Property insurance, while other purchase it as an endorsement to the policy.
A comprehensive Equipment Breakdown policy should include:
- Reimbursement for the cost of repairing or replacing damaged equipment (Some policies also cover green construction, disposal and recycling methods)
- Replacement of income lost from downtime (“Business Interruption” or “Service Interruption” coverage)
- Assistance from your insurance carrier, ranging from maintenance guidelines and checklists and crisis planning templates to identifying sources for repairs, unusual parts, or replacement equipment that can be obtained quickly.
Our Business insurance experts would be happy to help you obtain a cost-effective Equipment policy that’s tailored to your needs. Just give us a call.
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