Retails Sales:

Supply chains and logistics failures. How contingent business income interruption insurance coverage can help cover your loss.

The busiest sales season of the year is fast approaching for retail sales. If store based retailers don’t have sought after products to sell, buyers are unhappy and leave; or they just order online and have it delivered. Unfortunately, they are not buying merchandise from you if you don’t have what they want. So here you are depending on your supply chains and their ability to manage logistics successfully which includes timely delivery of merchandise to you. But what if those companies fail to deliver? Well, you can wait for another type of delivery.

Contingent business income interruption insurance

But chance are slim that the goods will arrive in time and you will most likely loose sales.

However, as a realistic alternative, you could purchase a type of little known insurance. You would think it might be called supply chain failure insurance but it isn’t. It is called contingent business interruption insurance, or CBI which is “an extension to other insurance that reimburses lost profits and extra expenses resulting from an interruption of business at the premises of a customer or supplier.” See https://www.irm.com/articles/expert-commentary/contingent-business-interuption-gettingallthefacts

Usually commercial general liability and business property insurance are the basic types of insurance a business needs along with workers compensation if the business has employees and inland marine coverage if they have specialized equipment. There are also various types of additional insurance coverage, usually added by endorsements, which may be appropriate for your business depending on your specific situation. Two of the available endorsements are business income interruption and contingent business interruption.

Business income interruption insurance is a type of insurance which is not covered by CGL or business property. So an ISO endorsement is needed to cover the loss specifically. This type of insurance covers a direct loss of income at your business location and it can be part of a Business Owners Policy or Commercial Package, if designed in that manner. There are conditions which must be meant for this coverage to kick in, which depend on the loss being directly to the insured’s property and actually sustained. Therefore, a loss which does not impact the insured’s owned property is not covered.

But contingent business income interruption insurance can cover your losses due to a supply chain failure.

This is a separate and distinct endorsement which only applies when the insured is not the owner of the property which suffers the actual physical loss. It specifically applies if the business supply chain is disrupted and income is lost by the insured due to the supplier’s failure to deliver for various reasons such as cargo theft, equipment failure, plant shutdown, cyber-attack or weather-related disasters. A direct business income interruption endorsement will not cover you in this instance. These two types are mutually exclusive and only one can actually apply in any given situation.

In older policies and some current policies, insureds had to purchase both primary direct business interruption insurance and a second specific endorsement for contingent business income interruption insurance using the proper ISO form. The insured business had to have the underlying endorsement for direct business loss of income and the amounts specified in the original direct loss endorsement determined what amount your indirect loss limits were. https://marsh.com/insights/research/business-insurance.html.

But in present times, some carriers, including the Hartford, automatically provide standard loss of business income (BI) in their BOP with a host of additional endorsements available, specifically including Business Income for Dependent Properties (or CBI) in available options, as well as many others. See: https://www.thehartford.com/business-income-insurance.

As dependence on supply chains evolve, claims have become more frequent. Documentation to verify the loss of income has become crucial to a successful claim. Algebraic formulas have been developed to calculate loss and are adjusted to take into account seasonality for retail businesses. http://www.air-worldwide.com/Blog/Supply-Chain-101–Breaking-Down-Contingent-Business-Interruption/

Businesses should be proactive before selecting a supply chain provider and be prepared for any loss.

Ask your supplier these questions before entering into a business relationship:

Does your supplier have a contingency plan to deal with natural and man-made disasters which interfere with delivery of goods on time?
Does your supplier have marine inland which will protect goods in transit and if so ask for a Certificate of Insurance and to be named as an additional insured on their policy? ( This will forestall any policy interpretation that CBI coverage is not applicable because it did not occur at the supplier’s place of business. This issue may not arise as arguably a business conducting a supply chain owns the transportation vehicle and it is the supplier’s property. But it never hurts to be doubly insured.)
Ask for a Certificate of Insurance for the supply chains general commercial liability policy.
Does your supplier have logistics management error and omissions liability policy? If so, also obtain a Certificate of Insurance.
Does your supplier have cyber risk insurance which covers third party losses from business interruption if the supplier is shut down due to a cyber-attack? If so, ask for Certificate of Insurance and to be named as an additional insured.

In closing it is always a good practice to establish a good working relationship with your key suppliers and engage in any working supply chain group to solve problems both before and after they occur.

Image Credit: Pixabay CCO Creative Commons free for commercial use.

Shooting for Optimal Commercial Insurance!

Gun Clubs or Shooting Ranges have many similarities, but are really two very different types of facilities. A gun club is usually operated by the membership which pays dues or fees to belong, while a shooting range is operated by the business owner or a group of investors/owners who operate the business. Shooting ranges are usually run for a profit and have business customers, while gun clubs may or may not be for-profit. Gun clubs have members and guests, not clients.

General Liability Class Codes - Find the best info about insurance for Gun Clubs and Shooting Ranges at https://www.generalliabilityclasscodes.com/

Assuming that you operate a shooting range for commercial purposes or you are getting ready to start such a business, you are going to need excellent gun club and shooting range insurance that will protect you and your customers from many perils.

First, shooing ranges have the same insurance needs as most businesses including commercial general liability, and workers compensation if you have employees. Usually these two types of insurance are fundamental for business owners as they are required by law in most states.

Second, you need property insurance to cover damages and repairs to all types of property which the business uses to operate. You should start by making a list of all commercial property that your business owns, similar to an inventory and include all types of property: e.g.

Real estate,
Buildings and their fixtures,
Office furniture and decorative pieces.
Automobiles, trucks, golf carts, tractors and lawn tractors and any other type of moving vehicles you use to care for the premises or in the business operations
Guns and ammo, gun cleaning equipment, and gunsmiths equipment
All other business equipment for instance: gloves, ear protection, protective glasses, archery
Equipment, or any other related items whether you furnish it rent it or sell it.
Signage not attached to the building needs to be specifically included by a supplement or endorsement.
Books of Account, computer hardware and software,

Depending upon how much and what types of equipment your business owns and operates, you may need an additional inland marine policy. Along with property coverage you should consider coverage for loss of the data, should a power or equipment failure damage the data or information stored, and additional protection from a security breach or cyber-attack to cover resulting costs for loss of income during an outage, expenses to make notification to those who privacy has been breached and damages to clients privacy.

Other items owned by the business will depend on what items you offer for sale such as food, drinks, alcoholic beverages, gun supplies, etc. If you sell food you might need lots of other equipment’s such as cooler, coffee pots, stoves, refrigerator etc. You may need a rider or supplement for refrigeration as this is a common exclusion on many property policies.

The key factor when purchasing insurance is to make sure the gun clubs shooting ranges obtain coverage for all property.

Shooting ranges should carry a combination of stand-alone and supplemental policies or a comprehensive business owner’s package with endorsements.

Next you need to consider what liability your business could incur from the operations of a shooting range. First of all you need liability for the use of any type of firearm or other types of sport like archery or clay/skeet. If your business offers instruction or classes in shooting you will need liability coverage and errors and omissions. You will need first and third party liability for these matters. You may also participate in competitive shooting and other events which will require event coverage or firearm related events coverage. If you decide to sell beer or alcohol you will need liquor liability specifically which will usually be an additional endorsement.

You may determine that you want to provide on premises gun repair and, or gunsmith services. In that case you will need products liability and errors and omission or alternately gunsmith insurance which specifically includes these types. You will need Marine Inland or Bailee’s insurance if you store clients’ guns or keep them while you repair the item. You will also want to include Crime Coverage to cover theft of your property or you clients by employees if your property insurance does not specifically cover it.

Shooting ranges may have special insurance needs when nearby residential property or businesses expand until they are closely located to your business. Neighbors and persons who are affected by your activities can sue for nuisance such as noise, pollution, and violation of regulatory and environmental laws and in particular pollution.

Lead pollution is a very serious environmental pollution concern for shooting ranges.

People in close proximity to the lead, which is contained in the bullets and the dust from the bullets when it hits the target, can suffer severe injury especially children. Lead pollution can cause contamination of adjoining properties and waters downstream from you. Lead exposure can lead to injuries to citizens and clients arising from the exposure to the dust and the bullets, as well as employees being injured by exposure. An environmental insurance policy or endorsement is an absolute necessity to battle litigation, fees and fines from regulatory and government agencies. In order to minimize some of your costs you will want to have a safety plan which includes having your ventilation systems monitored, cleaned, maintained and insured as well as your environmental policy. Your employees should take every safety precaution available while cleaning the facility to shield themselves from exposure to the lead dust. Employees are required to have their lead levels monitored by OSHA periodically, which can lead to warnings, fines, medical expenses, remedial action and closure of the business temporarily.

So if you want a bang up insurance policy covering all your needs do some homework, meet with your agent, ask lots of questions and make sure the policy you purchase is right for you.

Automobile Repair Shops:

Ways to keep your Automobile Shop running like “Greased lightning”

Automobile repair shops are one of the most needed and highly utilized businesses in the car loving culture of America. Despite the vast popularity of cars, the repair industry has a somewhat tarnished image. So why do people who love cars or those who just really need a car for transportation have a negative viewpoint about automobile repair shops?

People often feel that they were mistreated and/or deceived,treated rudely, charged unfair prices; or faulty workmanship was performed. They then tend to label the whole industry as bad. Likewise, repair shops experience all varieties of customers and are subjected to rudeness theft, fraud, disloyal clients who purchase a cheaper product from a competitor while asking you for your advice, and other unpleasant situations. Unfortunately, this is reality in the car repair business.

Automobile Repair Shop

There are numerous types of automobile repair shops in the industry ranging from one owner with just a few employees to chains stores that feature oil changes and minor repairs to full service garages and huge dealerships. There is no one right formula for success for all. This article focuses on general auto repair shops which provide a wide range of repairs to the public. Of course customers are vital to the industry, and you are codependent on customers just as they are on you. What steps can you take to establish or improve the public perception regarding this symbiotic relationship?

People just really want to be treated fairly. And they want to have their “baby” looking and running like greased lightning. For non-musical car lovers “Greased Lightning” was the white 1948 Ford Deluxe convertible hot rod emblazoned with shooting silver and gold flames on the fenders which conveyed the image of being fast as lightning in the musical “Grease.” This car became an icon in the movie industry and to the public. It was known as a “chic magnet” by the members of the T-Birds gang led by Danny Zuko (John Travolta) in his famous portrayal of their leader. “Greased Lightning “was restored in the movie and roared to life after the proper care and attention of the T-Birds and their shop teacher. The rival gang leader drove Hell’s Chariot, a 1949 Mercury, which featured black paint and red shooting flames. This car was lost for a time after the movie, and later it was also lovingly restored in real life, by its original builder, after setting dormant for many years on the Paramount Lot.

You can take an example from “Grease” and use the process of restoration to establish or rebuild a favorable image for your automobile repair shop by combining good old fashioned excellent customer service combined with CYR (Cover your risks). A few suggestions for this are:

Antique automobile repair shop

Set the bar for a pleasant customer experience

When a potential client enters, greet and assist them or indicate you will be with them very shortly.
Direct them to the waiting area. If you provide coffee or water say so or post the price.
Have a play area for kids if possible, with quiet inexpensive activates such as coloring.

Combine aesthetics with customer safety

Keep the waiting area in a safe area of the building where no one is exposed to an injury.
Keep the public waiting area and restroom clean and visually appealing. Routinely inspect the area for hazards/risks such as puddles on floor and use fall prevention measures.
Keep the outside parking lot safe, fix holes in parking lot and sidewalks, provide outdoor lighting, routinely police the area for broken glass, contraband and contaminants, such as needles, which carry blood borne pathogens.

Learn to appreciate the customer’s input and put it to good use.

Ask the client what they feel is the problem, listen and acknowledge their opinion and solicit more information with questions.
Explain what else the problem might be and what your procedures are:
If you need to run diagnostics tell them upfront whether it’s free or there is a charge and why it needs to be done.
Be aware of client’s financial situation: If a client suddenly declines upon learning about the fee, offer them options. (Monetary embarrassment to the customer is a driving factor in their decision making) If they do not have the ability to pay immediately work with them to set a price and a time line for fixing issues one at a time if at all possible. If they cannot proceed immediately due to finances, thank them for their business let them know you will be willing to assist them when they are ready.
(Mechanics liens usually prevent the client from being able to simply not pay for your services). An explanatory brochure on mechanics lien should be available that you can have the customer read. If they want to proceed having the client sign a contract which says a mechanics lien can be used if they default is s a good risk management practice and puts the client on notice.
If you start work on a vehicle and have to revise your estimate let the client know ASAP and get their consent.
After service, advise the client of upcoming needed repairs and maintenance. A print out would be great.
Be patient with complaints, acknowledge and fix the problem if at all possible.
And try to keep calm and carry on!

My Insurance Question - Get the best answers to your Automobile Repair Shop Questions.

Show off your talent:

Display large pictures of cars you have lovingly restored or fixed with their happy owner’s as well as showcasing automotive industry awards and Certificates of Membership from industry associations which address customer excellence.
Display testimonials or thank you letters from clients
Use miniature cameras to record your employees work to prevent mistakes and complaints. Then furnish a complimentary picture for the client showing them with their car smiling.

There are many other things you can do to feature your company in a positive light and focus attention on the quality of your work.

At the same time you want to take every step possible to protect your business from any bad apples while also protecting your valued clients and employees with comprehensive insurance coverage.

General Auto repair shops are in the business liability category of Automotive Services and Sales.
The SIC Business Code would most likely be the General Automotive Repair Shops-7538.
The NAICS Liability Classification would be 811111-General Automotive Repair.
The ISO General Liability is 10073 Auto Sales, Repair and Service and the Worker’s Compensation Class code is 8380 Auto Repair.

Various types of insurance will be necessary. All automobile repair businesses will need worker’s compensation which is mandatory if they have employees and do not have the ability to self-insure.

Employers Insurance Company has created this great video about the Workers’ Compensation Insurance needs of Automobile Repair Shops.

You will need General Liability (slips and fall) and business property. You may want a BOP with the following: Business income and extra expense, Hired and non-owned auto, Commercial Crime, and Umbrella. Be aware that some business property policies do not cover signs which are not attached to the building, so you would need a rider.

Automobile repair shops also need to determine whether they need Garage Liability, or a Garage keeper’s policy. These two types are not identical. They address different needs. Generally speaking Garage Liability is more useful for a dealership that does auto repairs than a stand-alone auto repair shop. Many times a dealer will need both garage liability and garage keepers if they do auto repairs.

Garage keeper’s is best for a non dealer auto repair shop which may combine legal liability, direct primary and direct excess for customer’s automobiles. Commercial General Liability has an exclusion for client’s cars which are in the care, custody and control of an auto repair shop including test drives. Garage keepers covers what would be missed under the exclusionary language of the GLC policy and function much like Bailee’s insurance.

If your repairs fleets of autos for government, large corporations or schools; most of them will require Garage keeper’s with direct primary coverage and a Certificate of Insurance. Some may require that they be listed as an additional insured.

Cyber insurance is also highly recommended in light of the Payment Card Industry Standards and threat of data breach. You could be liable for the invasion of privacy, notification costs and damages should a customer’s data or identity be stolen.

Other types of insurance worth considering: Employment Related Practices, Moneys and securities, Accounts Receivable, Computers, Goods in transit, Valuable Papers and Records, Employee Benefit, Environmental Impairment and or sewer back up.

With all of the clients concerns and safety addressed and insured you can focus on your main priority. Making cars run like greased lightning!

Microblading in 2017:

Microblading, isn’t it like Tattoo’s or Permanent Makeup? Is it too risky for your beauty salon?

Microblading is all the rage at present and anticipated to continue growing exponentially in 2017. Numerous types of businesses are performing this beatification process and thousands of women are scurrying to places where they can have the technique performed. If you are thinking of adding microblading to the current menu available at your beauty salon or spa, you need to be aware of the benefits and the risks to ensure your business is protected.

Microblading: If you're thinking about adding microblading to your salon or tattoo parlor, get the answers to your liability risks at https://www.generalliabilityclasscodes.com/

Microblading is the process of making minute incisions in the skin surrounding a person’s eyebrows and injecting tattoo ink or pigment, which is preferred by some artists, to make the client’s eyebrows appear full and lush. In Microblading you are not cutting hair or applying an external chemical process to hair which can grow back rapidly; you are cutting into the skin and tissue in close proximity to the eye and the brain with a needle very similar to a scalpel. You are injecting tattoo ink or pigment into the cuts in the skin and tissue which can result in a variety of infections and complications. These include fistulas, inflammation, inflammatory diseases of the eye, eyebrow, facial tissue, glands and muscles with spreading to the brain, scarring, and hyper-pigmentation. http:/www.ivylasersalon.com/microblading-dangers-and-disasters/Additionally, there is danger of transmittal of blood borne pathogens and communicable diseases. All of these can be caused by:

Contamination of the instruments used in the procedure,
the actual ink or pigment injected into the skin,
And/or the local water used to dilute the inks used in the process.

Microblading is not the only common name for this procedure. It is also referred to as eyebrow embroidery, micro stroking or feather touch and technically includes the process of micro-pigmentation. According to the Skin Science Institute, it is usually administered by an esthetician, tattoo or make up artist.

Regulation of artists performing Microblading is sporadic and confusing. There are no well-defined processes developed for compliance with all the applicable laws and rules. While Cosmetologists have a very structured training and regulation process for licensing, microblading is not regulated in the same manner. Each state sets standards for training in tattooing and permanent makeup and determines whether they need to be licensed or certified; how many hours of training are required and whether an apprenticeship is needed.

Microblading artists are usually a permanent make-up or tattoo artist as the FDA regulates tattoos, including eyebrow tattooing, and considers it to be permanent cosmetic makeup. Tattoos & Permanent makeup: Fact Sheet, http://www.fda.gov Whether you choose to use pigment, which some artists prefer, or tattoo ink; the product used for Microblading, has to be approved under the Federal Food, Drug and Cosmetics Act. Laws regulating the actual tattooing process vary significantly depending on the state you are working in. Usually the State Department of Professional Regulations regulates both Cosmetologists and Tattooing separately but some states do not even mention Makeup Artists, Permanent Make-up Artists or Estheticians.

Liability coverage for Microblading can be added to most insurance packages.

The Microblading process exposes you to liability well beyond the normal routine matter for a beauty shop or spa and is actually more akin to a medical procedure.

It is fraught with risks for the clientele, leaving you quite vulnerable to liability. On the other hand, it is a very popular procedure, especially with older women, who comprise a large portion of the clients who use salons for this procedure. Additionally, you want to remain competitive in this field so what can you do to insure and protect your business?

The key factor is to you use all of the available insurance protection options wisely. It is incumbent upon you to inform your agent or carrier that you are going to start offering these services. If you do not inform the insurance company they have no way of knowing until you make a claim.

If you fail to inform your insurer it is easily arguable by the carrier that microblading is not covered under the general liability class codes or workers compensation class codes for a beauty salon under either a standard general liability policy or BOP for a beauty salon.

It is also arguable by an insurance carrier that Microblading is being performed by artists that are not covered under a standard general liability policy or BOP for cosmetology as they are not licensed cosmetologists. This would hold true even if the policy has no specific exclusion for microblading.

So the answer here is you need coverage for the specific act of Microblading. You can accomplish this by having a new BOP tailored to meet both a beauty shop including a permanent makeup artist and a tattoo parlor performing Microblading. This art can also be covered with an endorsement, supplements or a stand-alone policy specifically addressing the activity to be covered and the employees performing the activity. You want the policy to clearly define what Microblading is in all of its many forms or names and specify that is covered in all instances. You may want to fully describe the action of cutting the skin and injecting inks and pigments into the skin. You want to make sure that your artists are certified or licensed appropriately in the state where the act will be performed.

When adding microblading to your beauty salon, make sure to purchase the right liability coverage by doing your research at General Liability Class Codes.com

Also compare your beauty shop policy to a tattoo artist or a permanent makeup artist policy and determine what acts are covered by a tattoo artist policy but are missing from your policy and then you want to add those features by endorsements to your existing policy.

Of course you will still absolutely need general liability, property insurance, workers’ compensation and any others which are standard for salons. Additionally, you need professional malpractice a/k/a as errors and omissions for permanent makeup artists and/or tattoo artists in addition to E&O for the beauty shop. You also need products liability, for the inks, pigments and blades.

Typically tattoo artist policies include completed operations which might not be a part of your cosmetology policy. You will want to have this covered because tattooing can fade, leaving scars well after the tattoo is completed. Tattoo parlor insurance usually includes protection against communicable disease and blood borne pathogens, as well as apprenticeship or guest artist insurance. You cant have a tattoo business without this coverage.

If you plan on the artist creating tattoos other than on the eyebrows, sexual abuse coverage may unfortunately be a wise type of coverage to carry as clients sometimes want tattoos in delicate places which are usually performed in a secluded portion of the salon. Sadly some clients bring a claim for abuse or inappropriate touching which can be a battery, whether or not it is justified. This is not necessarily covered by standard crime coverage. Don’t hesitate to ask your agent to check whether this is covered on your policy if you have crime insurance.

So as they say, people make a statement about themselves when they obtain a tattoo. Your shop can make a statement too by the manner in which they create wearable art which enhances a client’s facial appearance and have the pleasure and satisfaction of knowing their art is insured to the fullest extent possible.

What are the diverse needs of a Retail Business?

Retail Businesses, Cyber Liability & Cyber Security Insurance

Retail

Accepting credit card payments at your retail location makes you part of the Payment Card Industry (PCI stands for Payment Card Industry). The PCI Security Standards Council, which is a voluntary council, has issued Data Security Standards dealing with cyber security for credit card data (PCI DSS) which are voluntary regulations for the Payment Card Industry. In particular, the council issued PCI DDS Requirements 5 and updated V3.2 in May of 2016 which impacts retail stores substantially.

The most important aspect of these regulations in regard to retail sales is that non-compliance with the voluntary regulatory standards to prevent a data breach can result in making your organization ineligible to be a point of sale for credit cards.

The Council itself does not have compliance enforcement ability over the retail industry. This power rests with the credit card companies who are the founding members of the Council e.g. Visa, Master Card and American Express. Thus, these regulations have far reaching impact on your ability to be a vendor who can accept credit card payments and as a result your compliance is necessary if you want to use credit cards. If you become ineligible of course it can reduce your profit.

Putting aside any theoretical discussion regarding compliance issues with voluntary security standards, they are meant to protect the public by preventing data breach, so stringent guidelines were put in place protecting the consumer purchasing the products you sell from invasion of privacy, theft, fraud and identity theft due to payment by credit card under Requirement 5.

For those who are not computer savvy, Requirement 5 in a very condensed nutshell states you must protect all data systems against malware and regularly update anti-virus software of all programs. The sub parts further break it down in regard to the actions you must take to implement Requirement 5 which essentially means

you must take all possible steps to prevent a data breach by identifying all threats and detecting all known types of malicious software and malware,
ensure that all protection software programs are current and updated, perform periodic scans
document the scans in logs and track everything you do to keep current, ensure that all antivirus and malware programs can’t be disabled or turned off.
If you have to shut down the anti-virus and /or malware programs for a limited time frame for an approved legitimate reason you have to have authorization from your management, and
document all details in yours logs and run all security protocols when the programs are back up and running and perform a security scan. See the PCI Basics & Quick Guide for more detail. http://PCIcomplianceguide.org

Accomplishing all these tasks is very difficult to achieve. Not even the Democratic Party has been able to complete insulate itself from cyber-attack. So it is fair to assume that you might have some difficulty accomplishing all of the required tasks without a really top notch IT person or department. There are Quality Security Assessors who specialize in conducting technical assessments of your compliance defense system. See Cb Defense PCI DSS Anti-Virus White Paper, Carbon Black Arm your Endpoints. http://www.coalfire.com

Numerous companies also sell antivirus and malware platforms that you can purchase and have the platform itself tested to ensure that it does comply with the PCI regulations.

While you may think all of this is unnecessary or over kill just think of the cyber-attacks against national retailers (e.g. Target, Home Depot and E-Bay).

If you are ever sued by customers for a data breach that occurs within your retail business, compliance with the PCI industry standards may actually support your defense as it is considered a best practice to comply with these security standards and it helps to establish that you used a high standard of care in dealing with data and client’s privacy. Because you have a high risk for data breach it is in your best interest for you to have data/ breach/cyber security Insurance. In saying that, you also want to consider other insurance needs in addition to cyber insurance.

Most carriers offer retail establishments either a business owner’s package with a combination of: standard features including:

commercial general liability
business property and inventory with or without enhancements or stretches (interestingly property coverage does not include an outdoor sign that is not attached to the building so you would need a rider in that instance)
property in transit floater, or inland marine
business income loss with endorsements for utility outages and direct damages
worker’s’ compensation
e-commerce sales
burglary, theft or crime; and employee dishonesty
spoilage and a food contamination rider if you sell fresh or frozen food items
mechanical or electrical breakdown
Commercial auto if indicated.
And, most agents and carrier often suggest umbrella insurance.

But at the same time carriers and agents do not emphasize the need for cyber security or data breach, nor are they usually offered as part of a BOP. This may be because this type of insurance is fairly new and the parameters for cyber insurance are not completely developed or formalized. While there is very limited cyber coverage in the business property insurance portion of the policy, it is insufficient for anyone who is required to meet the standards for payment card industry as this requirement makes it self-evident that there is a legal duty and a standard of care in the payment card industry and if you are negligent and fail to meet the standard it may increase your liability to your customers for a data breach.

Thus, any PCI retailer will want to ensure that the cyber security policy they choose has provisions for coverage of regulatory fines, notifications of customers, first and third party damages and defense coverage which triggers at the earliest moment possible.

Cable Installers Liability Needs

Cable Installers, are you an employee or a 1099 contractor? (Or “The elephant hiding in the closet”)

There is a vast movement afoot in the cable and satellite installation industry to have cable installers become a 1099 contractor rather than an employee of the cable company. See “Consider the Cable Guy”: The Grind Investigation Fund. Many major cable companies are requiring their employees to make this change involuntarily. Why you might wonder?

Well, this is a very effective cost cutting measure for the cable companies. They need people to install the systems, wiring and equipment that operate and control the media service they are selling. This job cannot be performed without a human at this point in time. However, if cable companies utilize a fleet of 1099 contractor’s as cable installers instead of employees:

It reduces the employer’s costs considerably as the employer no longer collects or pays FICA or federal and state income tax on the cable installers.
Cable companies does not pay employer taxes in to the government.
Cable companies often charge the 1099 contractor cable installers for such things as uniforms, tools, equipment and use of a truck. Conversely, as an employee, the installer would most likely have received those items at no cost from the employer. These measures both reduce the cost and bring in revenue from the contractor.
A Cable companies also save vast amounts of money on reduced insurance payments as the burden of carrying certain types of commercial insurance switches to the 1099 contractor. This reduces the number of employees and conversely reduces the premium cost for the employer as well.

So, if a cable installer begins working as a 1099 contractor they really are functioning as any small business owner would. The installer will need all the types of insurance that any company in the cable installation business should carry including general liability, errors and omissions, business property, inland marine, commercial auto (if you are furnishing the vehicle), commercial property and loss of business income and perhaps an umbrella policy or a technology policy. As a 1099 contractor, you can obtain these as part of a business owner’s package or as standalone policies.

You should speak with your agent to gain knowledge about the best options for cable installers within the Class Codes your business comes under listed below:

Business Liability Category: TV and Media Installation

SIC Business Insurance Codes:

4841- Cable and Other Pay TV Services

NAICS Liability Classifications:

517110- Wired Telecommunications Carriers
• 515210- Cable and Other Subscription Programming

Business ISO General Liability:

Code: 91315- Cable and Subscription TV Companies

Common Workers Compensation Class Codes:

7536- Cable Installation and Construction
8901- Cable and Telecommunications- Office Employee
7600- Cable TV or Satellite- Other Employees and Drivers
6325- Conduit Construction- For Cables or Wires
8742- Outside Sales Persons
Code: 91315- Cable and Subscription TV Companies
Code: 91315- Cable and Subscription TV Companies

Plus, as a 1099 you will need health insurance which covers your own health needs. This means obtaining health insurance which is most likely not part of a group plan in most cases. Individual health insurance is usually very expensive no matter who the insurance carrier may be. An alternative is to join a union or an association of workers in this field that offers health insurance to its members thus forming a group (E.g. Communication Workers of America).

But the biggest concern related to insurance is Workers Compensation.

Since you no longer are an employee, just as you are no longer covered by the Cable Company’s group health plan, you are no longer entitled to worker’s compensation through your client the Cable Company. That means even if you get hurt on the job while installing for the cable company at a property you were sent to by the cable company you are not covered by Workers Compensation. (There is that elephant hiding in the closet with a not so great surprise!)

Whether your required to carry Worker’s Compensation insurance for yourself (as a single employee) is another question altogether and depends on many things. Some states require that a single employee company carry workers compensation while other states do not. In some states you are exempt if you have less than 4 employees. Some states exempt members of an LLC. Whether it is required by the state should not be the end of the inquiry because if you don’t cover yourself for Workers Compensation, no one else is, and you may be definitely letting the elephant loose to trample you if you are injured severely on the job. Additionally, your old employer (the cable company) who is your “client” who sends you out to cable company users homes to do installations can and often does require that you carry workers’ compensation and that you make the cable company an additional insured on your policy when you go out to install systems for their customers.

You may think you are covered by your own health insurance that you just bought, however; many times your health insurance carrier will deny coverage if you were injured on the “job” and if you don’t have workers compensation the injury is not covered at all unless a third party or the cable company was negligent.

This can be quite a tragedy if you are injured and have not obtained the insurance needed to protect you. The Bureau of Labor Statistics shows that 3 million workers were injured on the job in 2014. So if you find yourself in the position of a new 1099 contractor make obtaining commercial insurance one of your top priorities.

Insurance needs in the Food Truck Industry.

Amazing Innovations in the Food Truck Industry spark new Insurance needs

One of the most delightful culinary happenings in history is here to stay. Food trucks have made major inroads into the restaurant industry and are one of the fastest growing areas due to new innovations in this field. From sleek and savvy to cute and sassy the designs, structure, overall look and utilization of food trucks are being reborn, and taking root in America.

The widespread advances throughout the food truck industry sparked a remarkable change in the food world because of the unique melding of two types of business into one. That is a hybrid restaurant on wheels but not the stereotype ice cream truck or cold sandwiches and snacks served in a factory parking lot. The public wanted outrageously good food, with appetizing aromas and an enticing appearance served in a fun atmosphere.

Restaurant entrepreneurs responded to the public’s desires and now diverse menus with every food imaginable served from fantastic wickedly designed trucks provide adventures in dining to the public’s delight.

As more and more food trucks enter the business world and develop their own style or “brand” many other industries seek to cash in on this phenomenon by providing goods and services designed specifically for the food truck scene.

Among those wanting to collaborate with the food truck industry is the commercial insurance industry. Thus the food truck BOP insurance policy came into being because every business needs insurance which fits their specific needs. Especially a state of the art customized truck fit to feed a queen and king or better yet, you and me.

With that thought, what type of insurance does an amazingly clever entrepreneur need to keep his mobile eatery and victuals protected from peril?

While the insurance needs for a food truck are similar to the needs of a restaurant there are many differences and concerns which are not present in a brick and mortar restaurant so restaurant insurance is just one piece of the protection puzzle. Additionally you need excellent comprehensive vehicle coverage for your food truck; especially since you have lovingly crafted the ideal truck with the right atmosphere using your imagination to create a dining experience extraordinaire for your clientele.

Initially, the insurance industry did not share the vision and were really divided into two camps. Auto insurance carriers offered business add ons to policies and commercial restaurant insurers offered add ons for company vehicles, but very rarely did insurers have a specifically designed business owner’s policy for a food truck. To meet the growing desire for “specialty” policies, insurance carriers adapted and developed packages tailored for food trucks and more options became available. No matter which carrier you utilize a specialty tailored policy should include these basic elements:

A comprehensive commercial general liability insurance policy (required by law)
Commercial auto/truck policy.
Business property and equipment/inland marine
Business Loss of Income with extra Expense
Workers Compensation for your employees (Required by law)

The business liability category for Mobile Food Trucks is Eating and Drinking Places

This means your classification codes used to classify and rate coverage premiums would generally fall under:

SIC Business Insurance Codes

4812 – Eating Places

NAICS Liability Classifications

722320 Food Caterers
722310 Food Service Contractors
722330 Mobile Food Services

Business ISO General Liability:

Code 11039 – Caterers and Mobile Food Service

Additional insurance options are:

Food Spoilage/contamination
Cyber-security/data breach
Liquor Liability (If you serve beer, wine or alcohol)
Commercial Umbrella
Catering/Special Events
Employees Dishonesty

Special concerns may arise when choosing your businesses commercial automobile coverage and your businesses commercial property insurance.

Coverage for employees sent on errands for the food truck with their personal auto.
Special riders that cover the unique painting and finishes on your truck in the event of a wreck
Coverage if you have retractable awning or parts that expand the size of the vehicle. You may need extended coverage or a rider similar to a policy for an RV

Coverage for refrigeration units, both if the unit breaks or the truck itself is broken or damaged and coverage for any foods that spoil
Coverage for cooking equipment and apparatus giving special attention to whether there is any exclusion for types of cooking units or types of fuel used. A good example of this is exclusion for a propane fuel cooking system due to the spate of recent explosions.
Coverage for nearby buildings, and objects damaged by fire or explosion

(You will also want to develop a fire and safety plan with training components for employees to help with your insurance costs. You will also need a gas detector suitable to the type of cooking fuel you use.)

Coverage for lease or rental of additional commercial kitchen space
Coverage for use of your home kitchen to cook a portion of the food in ,needs to be specifically covered in your property insurance.
Coverage if you have a home office, computers or other equipment used for the business located in your residence, which should be specifically listed and included.

Another category of concern is raised by the frequent use of credit card readers which leaves your food truck vulnerable to data breach. This seems unlikely but really is not. Credit card information is eagerly stolen by criminals who want to make profit from its usage. Approximately 43% of all business in US have had data breaches.

Now that you built your dream on wheels keep on, keeping on protecting your dream by being a connoisseur of your insurance needs.