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Business Newsletter - July 2018


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. 26 No. 4


Recruiting: Staying One Step Ahead of the Competition

Whether you run a small, family-owned business or a large company, attracting and retaining key employees is challenging in today's economy. Businesses often compete for skilled and talented employees in the same way they compete for a customer's business. So, how can your business set itself apart with top performers? 

Robust Benefit Packagesrecruiting

In addition to a competitive salary, most potential employees have a certain level of expectation concerning benefit plans. When evaluating prospective employers, selective candidates may compare the core benefits being offered. The following benefits may be among their primary considerations: 
Qualified Retirement Plan. With the shift away from defined benefit plans toward defined contribution plans, personal retirement savings are more important than ever, and the 401(k) plan has become a sought-after vehicle for retirement savings. Prospective employees often expect, at a minimum, that a plan will be offered. Plans such as the 401(k) are enhanced with company-matched contributions. 
Health Insurance. With the Affordable Care Act (ACA), many workers have entered the marketplace to purchase their own health insurance from state exchanges. For this reason, employer-sponsored health insurance, may still be considered an important employee benefit. Although the details and costs associated with company plans vary, prospective employees may place a high value on the availability of an employer-sponsored plan when conducting their job search. 
Paid Time Off. As employees seek work-life balance, the amount of vacation and personal time offered by an employer is often an important consideration. In fact, many individuals value the amount of vacation and personal time available to them, even if they fail to use it all on an annual basis. 
Flexibility. The change in workplace demographics and technological advances have resulted in the need for greater flexibility on the job. Therefore, it is important for businesses to recognize these trends and modify policies for flexible work schedules, as appropriate. 
Work Environment. The workplace atmosphere can also be a major factor in employee satisfaction. Prospective employees may be looking at stress levels, communication styles, and the workload. 

Selective Benefits

In some cases, Internal Revenue Service (IRS) anti-discrimination rules limit the benefits received by highly-compensated key employees. For executive-level employees, there are additional benefits that can be offered. The availability of these selective benefits can distinguish one employer from another. 
Executive Bonus Plan. An employer may offer key employees a compensation bonus to be used for paying the premium on a life insurance policy. If an employee owns the policy, the bonus amount can be a deductible business expense for the employer. The employee must claim the annual bonus on his or her tax return as ordinary income. Any death benefit paid to the employee's estate or beneficiary is generally income-tax free. 
Disability Income Insurance. For a highly-compensated employee, a group disability insurance plan may provide only a limited amount of coverage for sustaining an illness or injury that prevents him or her from working for a length of time. To supplement this coverage, an employer may offer additional, individual disability income insurance. 
Voluntary Benefits. Through a voluntary benefit plan, an employer can offer a menu of benefit options in addition to existing core benefits. Employees choose the benefits that meet their respective needs and pay for them through payroll deductions, as defined by the specific plan. Because voluntary benefit plans are offered in a group setting, costs are generally more affordable than if an employee were to purchase similar benefits individually. 
Business owners are realizing that a competitive salary is no longer the only factor sought by highly skilled employees in today's job market. Just as you shop for key employees, they shop for the employer that offers the best combination of salary and benefits for their specific needs. Therefore, you may want to consider creating a benefits package that keeps you one step ahead of the competition. 

A Risk Management Solution for Small Business Owners

When you consider all the things that could go wrong with a business, it's no surprise that small business owners are often described as risk takers. However, there are two risk exposures that business owners cannot afford to overlook: property loss due to perils such as fire, theft, wind, or water damage, and liability loss for injuries sustained by individuals while on business premises and/or during operation of the business. Although self-insuring was once an option, in today's litigious society, it is not cost-effective or a solution, particularly for potentially catastrophic losses. A businessowners policy (BOP) can play a crucial role in risk management. risk management
A BOP bundles prearranged property and liability coverage in one package by providing property coverage for a building and its contents, coverage for loss of business income after an accident, and liability coverage for physical injury or physical damage caused by an employee, on-premises risk, operation, or product. Note that Health insurance, workers' compensation, and business automobile coverage are typically not included in the standard BOP. 
The primary advantages of a BOP are ease of handling, streamlined rating procedures, and a reduced need for detailed risk management decisions. Typically, a BOP is less expensive than purchasing several policies separately. 

Is a BOP Right for My Business?

Generally, specific criteria must be met in order to qualify for this type of policy. First, your business should be considered a "good" risk so that premiums can be priced more affordably than individual policies. For instance, a small neighborhood bookstore selling books on gardening may have an easier time obtaining a BOP than a company that is in the building demolition business, whereby serious accidents may be more likely to occur. Second, your business should have "ordinary" insurance needs without the potential for unusual exposure to loss. Again, a demolition company would have more unusual exposure to loss. A standard BOP that does not adequately meet the needs of a particular business may be customized to meet those specific needs, which often makes a BOP an appropriate choice for small businesses. 
While every business is unique, many businesses are exposed to similar types of risk. If the risk exposures of your business are fairly common, you may want to explore the benefits of a BOP. Having most risks covered under one policy can prove to be a cost-effective risk management tool. For more information on BOPs, give us a call. One of our qualified insurance professionals will be happy to help you determine if a BOP is right for your business.

Did You Know?

Onboarding Experiences and Retention 

According to a study conducted by Digitate and IT Automation and Artificial Intelligence (AI), employees who have a negative new hire onboarding experience are twice as likely to look for new opportunities in the near future. In addition most new hires are dissatisfied with the onboarding process. If fact, one in five are unlikely to recommend the employer to a friend or family member. Furthermore, one in five is confused on how to proceed during the employee onboard process. 

Most Small Businesses are Expanding 

CIT Direct Capital recently announced the results of a survey conducted by The Harris Poll finding that nearly 75% of small businesses in the U.S. plan to expand their product and service offerings this year. The findings show that 50% say technology is at the top of the list, followed by equipment upgrades at 47% and hiring staff at 36%. Despite these expectations, small businesses remain focused on several key issues: data security 68%, continued economic uncertainty 64% and rising inflation rates 61%. 


Most Employees Prefer Going to an Office 

Eighty-two percent of U.S. workers surveyed say the ability to work from anywhere at any time allows them to maintain a healthy work-life balance, but 62% still prefer to work from the office, and this number is higher among young workers. In addition, 66% of workers say they like the option to work from home, but aren't able to do so and 80% of workers say agile work increases their productivity and job satisfaction.


Product Liability Insurance: Who's At Risk?

Rigorous manufacturing standards and enhanced quality control are perhaps the best ways to prevent a product liability lawsuit. However, as the link between companies and consumers weakens, manufacturers, distributors, wholesalers, and retailers are increasingly at risk when customers use their products and become injured. While a company may feel it acted responsibly to prevent any potential liability, it may still be vulnerable to lawsuits.
product liabilityAccording to the legal doctrine of "strict liability," a company selling certain products may be held liable for any damages resulting from the use of its products, even when there is no proof of corporate negligence. Any company that sells, distributes, or manufactures a product may risk losing a significant amount of money in direct compensatory and costly punitive damages. Fortunately, companies may be able to protect themselves with the proper insurance coverage. Product liability insurance, combined with procedures to create a safe product, may help secure a business against liability from real or alleged product defects.

Policy Considerations

Generally, a product liability policy covers property damage or bodily injury caused by the product, as well as payment for legal defense costs. 
Coverage for recalling and replacing defective products, including the cost of the damaged product itself and any potential losses resulting from nonperformance of the product's intended function, generally is not included in standard policies but may be purchased separately in many cases.

Precautionary Measures

Although product liability insurance provides protection from claims arising from the use of faulty products, this coverage should be used in conjunction with quality control and other precautionary and safety measures. Business owners may want to consult with an attorney who can review all labeling and advertising, and also thoroughly investigate any product claims. A qualified insurance professional can help assess the potential risks of your business to determine the appropriate coverage. Give us a call for more information.

For Your Information 


Is your business an example of the highest safety standards? If so, you might want to look into the On-site Consultation Program's Safety and Health Achievement Recognition Program (SHARP) run by the Occupational Safety & Health Administration (OSHA). If your business meets all the criteria, you would be exempt from OSHA inspections for up to one year. For the list of criteria and more information on getting SHARP certified, visit OSHA online at www.osha.gov


"Post-It" Notes 

Some government regulations require you to post certain Federal notices for your employees. Where can you get these posters? The Department of Labor(DOL) website, www.dol.gov, offers printable versions of many required posters, such as for the "Fair Labor Standards Act," which describes minimum wage regulations, and the "Family and Medical Leave Act (FMLA)." The DOL makes these posters available in several languages. 

Online Financial Education 

MyMoney.gov is a U.S. government website dedicated to improving financial literacy and providing basic financial education. Information is available for those wishing to start a business, buy a franchise, calculate credit card repayments, find educational grants, learn about saving and investing, or choose a retirement plan for a small business. The wealth of resources on MyMoney.gov can help business owners and the self-employed to take financial action safely and knowledgeably. Learn more at www.mymoney.gov.

Insurance Considerations for Your Home Based Business

home based businessIn the rush of your day-to-day business activities, insurance may seem like a secondary consideration. It is easy to put off thinking about what might happen tomorrow, when there is so much to do today. But failing to properly plan, or assuming that your current homeowners insurance coverage will protect you, could be costly. For your sake, protect your business against property loss and liability, and prepare for the possibility of a disability. As your business grows and changes, regularly review your coverage to keep pace and stay current. Your livelihood may depend on it.
Depending on the type of home-based business you run, and the type of related driving you do, a business auto policy may be necessary to help ensure you have adequate insurance coverage. Just as with a personal auto policy, it is important to secure sufficient coverage for liability, collision, and medical expenses, as well as protection against uninsured motorists. A thorough review with your qualified insurance professional of the ways in which your vehicle is used for business purposes can help determine the appropriate type and level of coverage.
Copyright © 2018 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