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Business Newsletter - January 2020


2205 Point Blvd., Suite 200 | Elgin, Illinois 60123
847-741-1000 | www.lundstrominsurance.com | Fax 847-428-8857

"Serving you, your business and your community since 1956"

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Vol. 28 No. 1

Protecting Customers from Identity Theft

Identity theft can have devastating financial and psychological consequences. When thieves make purchases, empty bank accounts, or take out loans under other people's names, it can take months, or even years, for those who are victimized to restore their good credit.

Less well known is the catastrophic effect of identity theft on businesses that fail to adequately protect confidential data. "Losing" a customer's data can result in litigation or fines, and it may irreparably damage a company's reputation if a data breach is made public. Smaller companies, in particular, are at risk for identity theft, while larger companies have become more adept at warding off hackers and other thieves.

Here are some of the precautions you, as a business owner, can take to reduce the risk of sensitive customer data falling into the wrong hands:theft

  • Minimize the amount and type of information collected. The theft of Social Security numbers can be particularly detrimental to individuals, so companies should use other means of identifying customers, whenever possible. However, even less sensitive information, such as phone numbers and birth dates, can also be tempting to thieves.
  • Conduct all electronic transactions through authentication systems with security designed to verify that the user who accesses an account or provides information is legitimate.
  • Establish a privacy policy with specific rules on the handling of customer data. Train all employees with access to customer data on these procedures.
  • Restrict employee access. Authorize employees to view or handle data on a "need-to-know" basis. There are software programs available that allow you to monitor who is accessing data at any given point in time; store this information in case an audit becomes necessary. If an employee leaves the company, access to the company's databases should be withdrawn immediately.
  • Remind employees that phone conversations can be overheard and computer screens can be viewed by unauthorized individuals. Encourage employees to use discretion when discussing confidential information and to lock their computers when they are away from their desks.
  • Protect your computer network with firewalls that create a protective barrier between your company's network and the Internet. Available as either software or hardware, firewalls can stop potential hackers from gaining access to confidential information stored in your system.
  • Use encryption when exchanging sensitive information with customers via a website or e-mail, and encrypt confidential customer data stored on servers and backup systems. Encryption software scrambles data during Internet transit, making it difficult for hackers to intercept and steal information.
  • Install antivirus and anti-spyware software on all company computers. Be sure the software includes automatic updates. As an extra precaution, remind employees not to open email from unfamiliar addresses.
  • Store information in the most secure location possible, and properly dispose of old records. If it is not necessary to keep customer information online, store it offline in file cabinets, under lock and key. Hard copies of records containing sensitive information should be shredded when no longer needed.
  • Protect hardware from tampering or theft. Thieves can tap into sensitive data stored on servers, hard drives, and notebooks if they find or steal the equipment. Notebooks containing sensitive customer information should not be taken outside the company, unless it is necessary to do so. Before disposing of old computer equipment, businesses should run hard-drive shredding software.
  • Include as little personal information as possible in written correspondence to customers, as thieves can steal Social Security and account numbers by intercepting mail.

If a data breach occurs, prompt action will be required. Suspend the compromised accounts immediately, and shut down the systems containing the data to prevent additional theft. Notify the police and the FBI of the breach, as well as any customers who might be affected. Your company's security systems will require thorough analysis to establish how the breach occurred, and steps must be taken to prevent future losses.


Frozen Pipes: A Preventable Nightmare for Business Owners

As temperatures plummet, pipes can freeze and cause serious problems for business owners. Water expands as it freezes, which can cause pipes to crack or burst. Pipes with inadequate insulation and ventilation can also freeze. Certain pipes, such as those near exterior walls, and in crawl spaces, basements, attics, and garages, are most susceptible to freezing.

Follow the precautionary tips below to prevent frozen pipes this winter:flood

  • Insulate all exposed pipes in unheated areas, such as crawl spaces and garages. Follow manufacturer's instructions when using heat tape, as improper usage can create a fire hazard. Also, be aware that heat tape can wear out, so be sure to check it frequently.
  • Make sure all key employees know the location of the master water valve and how to shut off the water in case a pipe should burst.
  • Shut off and drain water from pipes leading to outside faucets.
  • Winterize sprinkler systems according to the manufacturer's recommendations. Use a compressor to blow out excess water to prevent frozen pipes.
  • Leave cabinet doors open, so more heat can reach pipes under a sink or appliance.
  • Make sure heat is left on and set no lower than 55 degrees, even if your business is vacant.
  • If you are going away, have someone check your business periodically to ensure that the heat is working properly.
  • When weather is extremely cold, leave faucets dripping slightly to circulate water and avoid freezing.
  • If a pipe does burst, shut off the water and call a licensed plumber. Quick action can minimize damage

If you suspect a frozen pipe, call a plumber. Then, turn off the water and leave the faucets on. Never try to thaw a pipe with a torch or other open flame, and never use electrical appliances in areas of standing water, as electric shock is possible.

Damage caused by frozen pipes may be covered by business insurance. It is important to review your policy to know what it covers and to ensure that you have adequate coverage. To learn more about protecting your business and your equipment, contact one of our qualified insurance professionals.


For Your Information

Open for Business

The Institute for Business & Home Safety (IBHS) understands that business owners often have little time to plan for potential disasters. But, anything from a natural disaster to a storeroom flood could force a business to close its doors, which can mean trouble for the bottom line. IBHS's Open for Business program has tools to help reduce the potential for loss and facilitate reopening quickly after a disaster. Visit
www.disastersafety.org for more information.

Civic Leadership

The Business Civic Leadership Center (BCLC) is a nonprofit affiliate of the U.S. Chamber of Commerce that seeks to promote better business and society relations. Their research, reports, networks, and events address social issues that affect business, including corporate social responsibility, philanthropy, nonprofit and social service effectiveness, globalization, community investment, and disaster assistance. For more information, visit www.uschamber.com/corporate-citizenship-center.

ADA Business Connection

The ADA Business Connection helps business owners comply with the Americans with Disabilities Act (ADA) and enhance their service to individuals with disabilities. Information is available in various formats to educate visitors about accessible design, tax incentives, service animals, communicating with the hard of hearing, common ADA errors and omissions, and much more. There is also a toll-free ADA Information Line that permits business owners to call and ask questions about ADA requirements. Visit www.ada.gov.


Workers Compensation: A Time-Honored Benefit

Although you might think the concept of Workers Compensation originated in factories during the Industrial Revolution of the late 18th and early 19th centuries, it actually dates back to the 17th century on the high seas. Before seafaring crew members received payment for long journeys aboard trading ships that often navigated through uncharted territories fraught with a multitude of dangers, a special distribution was made to those workers who had been injured in action.workers

Into the Modern Age

With the advent of industrialization and the resulting increase in machinery-related injuries, workers compensation became formalized. The first laws were instituted in Germany in the 1880s, followed soon afterward in England and then in the United States, where Wisconsin enacted the first state workers compensation law in 1911.

Today, workers compensation law in the United States is considerably more sophisticated. State statutes define workers compensation, which means that laws differ from one state to another. While employers in almost every state are required to purchase workers compensation insurance, mandatory workers compensation coverage sometimes only applies to employers who have at least a certain number of employees or with annual payrolls above a certain amount of money. Texas is the single exception to mandatory workers compensation insurance for larger employers; instead, all employers in Texas may make their own decisions about whether to purchase this type of insurance.

The objective of workers compensation law is to substitute the common law rights of a covered employee (i.e., the ability to sue) against his or her employer with a legal remedy that requires the employer to pay benefits according to the applicable state statute.

Most state compensation laws prohibit lawsuits by employees against their employers. However, two of the more common exceptions are intentional harm, such as an injury arising from a safety violation, and bad faith arising from harassment of an employee during the claims process.

Who Benefits?

Workers compensation legally recognizes that when an employee sustains a work-related injury, the employer is obligated to pay for medical expenses, temporary and permanent disability benefits, rehabilitation benefits, and survivors' benefits in the event of death.

State workers compensation statutes cover most employees within that state. Federal statutes limit coverage to Federal employees or those employed in a significant aspect of interstate commerce.

Under a typical state statute, the employee is guaranteed workers compensation benefits on a timely basis. With a common law remedy, the injured worker could be subject to the delays and expense of litigation. Consequently, the injured worker may not receive compensation until a court makes an award or the case is settled. In turn, the employer is protected from open-ended financial losses associated with employee injuries, which could be substantial if employer negligence were proven in a court of law. The employer controls these potential losses through insurance premiums for workers compensation coverage.

While both parties have relinquished rights under our modern system of workers compensation (the right to a common law remedy by the employee and the right of due process by the employer), the benefits provided are generally believed to be worth the trade-off. Therefore, workers compensation protects both the welfare of the employee and the financial concerns of the employer.


Did You Know?

Employees Worry at Work

According to the 2019 Financial Stress Survey from John Hancock Retirement, more than half of respondents worry about personal finances at work at least once a week, causing distraction and loss of productivity. Patrick Murphy, CEO of John Hancock, reports, "Our survey highlights a downward trend on retirement readiness and indicates participants' financial situations are at risk with 36% of participants responding they are not in a good financial situation and 71% are worried about having financial difficulties."

Diversity and Inclusion

Results from the 2019 Diversity and Inclusion Study from Glassdoor show that 61% of U.S. employees have witnessed or experienced discrimination based on age, race, gender or LGBTQ identity in the workplace. Interestingly, the study finds that hiring for jobs to improve corporate diversity and inclusion efforts is up 30% year-over-year. Nearly half (45%) of employees report having experienced or witnessed ageism, 42% racism, and 42% gender discrimination.

Transforming Cost Structures

According to Kaufman Hall's report, the 2019 State of Healthcare Performance Improvement, nearly all U.S. hospitals (96%) now recognize the importance of cost reduction targets, yet fewer than 1 in 4 respondents have achieved most or all of their goals. One of the revenue challenges hospitals face are flat or declining inpatient volumes (30%). Following closely are downward pressure on commercial insurance rates (27%) and an increasing percentage of Medicare and Medicaid patients (19%).

Copyright © 2020 Liberty Publishing, Inc. All rights reserved.
The content of this newsletter is taken from sources that are believed to be reliable.
However, this newsletter is not intended as a substitute for legal, financial, or professional counsel.


2205 Point Blvd. Suite 200 | Elgin, IL 60123
p 847.741.1000 | f 847.428.8857