Business Newsletter - March 2019


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Vol. 27 No. 2

Cyberspace: It's Risky Business

Business opportunities in the virtual world of electronic commerce abound, but they inherently include exposure to risks and possible losses. In fact, business owners who operate in cyberspace may be subject to risks that are not necessarily covered under their insurance policies.

The insurance industry is addressing liabilities associated with electronic commerce and communication by offering cyber coverages that respond to the realities of modern technology where traditional liability policies do not. If you are operating in cyberspace, you may want to evaluate your own exposure to Internet liabilities in order to determine the extent of your insurance needs. Below are three main risks today's Internet businesses face: cs

Intellectual Property Risks. Currently, the Internet allows for the reproduction of logos, trademarks, and other copyrighted material through software and downloads. This technology could infringe upon the rights of other parties. Also, losses could arise if the enabling technology fails to perform as expected or guaranteed.

Media Liability Risks. As you surf the Internet to provide and promote your products and services, consider the risks associated with the creation, manipulation, or dissemination of content found in cyberspace. Some issues to consider are copyright and trademark infringement claims resulting from the use of published material, defamation suits caused by the broadcasting of libel and slander throughout global chat rooms, and invasion of privacy claims from tracking files that monitor user visits (i.e., "cookies").

Breaches of Security Risks. Information that is provided by you online could expose you to risk of loss if that information is stolen, damaged, or released without your consent. Security breaches or loss of data can occur by error (e.g., system malfunction) or malicious intent (e.g., computer hackers).

What to Do?

As you conduct business on the Internet, your risks and exposure to associated risks may vary. Here are a few tips about insurance coverage for online activities that may help you navigate the web of potential liabilities:

  • Review your liability, property, and other insurance policies for coverage in those geographic locations where you intend to work. Generally, insurance policies limit coverage to specific geographic regions, so you may not be protected against claims instigated in other countries.
  • Consider purchasing specialized insurance policies that are similar to those purchased by media and communications professionals. Generally, companies using the Internet to provide or promote products and services are subject to the same risks as companies in the media industry.
  • Attempt to obtain business interruption insurance that is not specifically tied to a physical event or occurrence. For example, loss of Internet service that could prevent you from conducting business could result from system viruses and other technological breakdowns.
  • Develop and maintain a formal, written business Internet and intranet policy, a policy for responding to and remedying complaints, and procedures for dealing with independent contractors and consultants. Be sure to train your employees accordingly.

As you conduct business in cyberspace, consider your company's online liability risks and the insurance you may need to protect your interests. One of our qualified insurance professionals can assist you in obtaining the appropriate coverage before a virtual malfunction becomes a real world loss.


Buying a Car for Your Business? Safety Matters

If your business is in the market for a new or used vehicle, you're likely to be weighing a number of different factors. Price, performance, and gas mileage are important considerations. Additionally, many car buyers are increasingly adding another concern to their wish lists—safety. While a safe vehicle obviously provides better protection for you and your family, it may also offer the advantage of lower auto insurance rates.

What causes one car, van, or truck to be safer than another? A vehicle's design and safety features can make the difference. Here are a few considerations to keep in mind: newcar

Restraint Systems. As seatbelt use has increased over the years, accident fatalities have declined. Shoulder belts with adjustable upper anchors help keep the belt properly positioned across the chest, and adjustable head restraints can help minimize neck injuries. Crash tensioners take up belt slack during a crash, limiting forward movement.

Air Bags.Many fatalities occur as
a result of head-on or front-angle crashes, and air bags may reduce the risk of serious injury in these accidents. According to the National Highway Traffic Safety Administration (2019), frontal air bags saved 2,756 lives in 2016.

Antilock Brakes. Hard braking can cause wheels to lock up, especially in slick driving conditions. Antilock brakes help prevent wheels from locking up by automatically pumping themselves several times per second. Bear in mind that while they enhance control, antilock brakes do not help a driver stop more quickly. Brake assist, however, increases brake pressure during emergency stops.

Traction and Stability Control. Traction control systems limit wheel spin during acceleration. Electronic stability control (ESC) enhances handling through turns, minimizing skidding.

Vehicle Size, Weight, and Design. Large, heavy vehicles tend to provide better protection for drivers and passengers than small, lightweight vehicles. Structural reinforcements, such as reinforced roofs and side beams, help protect passenger compartments in rollovers or side impact crashes.

Telematics. For safety purposes, vehicle telematics can provide automatic collision notification to a central dispatch center. This information and communications technology can also be used to recover stolen vehicles and request emergency assistance.

Although not all safety features directly affect insurance costs, they help improve the odds of avoiding an accident or, at least, help minimize injuries if one should occur.


For Your Information

Help for Veteran Business Owners

The Veterans Corp is a Federally-chartered organization that provides veterans with the tools and resources they need to be successful in business. Their website features a number of educational tools, including information on how to deploy-proof a business. This section helps National Guard or reserve entrepreneurs decide whether to suspend or sustain the business during a deployment, and it provides them with information on how to carry out their plans.
For more information, visit

Looking For a Business Investor?

The Small Business Investment Company Program (SBIC) helps connect start-up or growing businesses with venture capital. Licensed and regulated by the Small Business Administration (SBA), SBICs are privately owned and managed investment companies that make capital available to small businesses through investments or loans. To learn more about this program, visit

 Depression in the Workplace

Families for Depression Awareness, a national non-profit organization, helps people recognize and cope with depressive disorders. Because untreated depression is common and can lead to increased absenteeism, disability, and medical costs, the organization helps businesses educate their employees about depression and motivates them to get help. For more information, visit


Don't Let a Product Liability Claim Injure Your Bottom Line

Your company may be sued if a customer feels your product caused him or her harm. In some cases, it can even be held responsible in the absence of any corporate negligence. Under the legal doctrine of strict liability, a customer could sue your company even if he or she is injured while incorrectly using your product or didn't follow directions. Product liability insurance can help protect your company against liability for actual or alleged product defects. It covers bodily injury and property damage caused by the product, as well as payment for legal defense

Consider taking the following precautions to prevent claims before they happen:

  • Enforce strict manufacturing, warehousing, and distribution standards and quality controls.
  • Have an attorney specializing in product liability law review and approve all labeling, contracts, and advertising.
  • Investigate accident and injury claims immediately and thoroughly.

Unfortunately, even the most prudent business practices do not always prevent lawsuits. With jury awards increasing in size, even an unwarranted damage claim could impact your bottom line. As a result, product liability insurance is an important form of protection.

Vendors Endorsement

Retailers, wholesalers, and distributors may also be held liable for product-related injuries, even if they are caused by manufacturing defects. A vendors endorsement extends a manufacturer's product liability insurance to its retailers, wholesalers, and distributors, generally by adding the vendor's name to the manufacturer's general liability policy. If a lawsuit occurs, the vendor can turn to the manufacturer for protection.

However, before agreeing to a vendors endorsement, be sure that the per claim and aggregate limits of the manufacturer's policy are high enough to cover potential claims. Also, note that a vendors endorsement only provides coverage for the product as it is when it leaves the manufacturer's hands. If you, as a vendor, alter it in any way, such as relabeling or repackaging, you may not be covered. Vendors coverage is not a substitute for primary product liability protection; rather, it may be considered a supplement to a sound product liability insurance program.

Consulting with one of our qualified insurance professionals can help you determine an appropriate course of action for protecting your business from product liability claims. Give us a call for more information.


Did You Know?

Small- to Mid-Sized Future Index

According to a recent study by the Michigan Future Business Index (MFBI), acquiring and retaining talent remains the top challenge for small- to mid-sized business leaders. However, the rising cost of health insurance and higher wages have emerged as additional concerns. The data show that 45% of the survey respondents plan to raise wages in the next six months, up 10 points from one year ago. And, more than 84% of respondents are satisfied with the overall economy with 78% believing they are in a good or excellent market.

Positive Outlook for Q1 2019

The RSM US Middle Market Business Index (MMBI), presented by RSM US LLP and the U.S. Chamber of Commerce, remains strong, down slightly from Q3 2018. Executives remain positive about economic growth as they look to 2019 but are conscious of rising inflationary pressures, a tight labor market, and uncertain outlook for tariffs and trade policy. Business leaders anticipate a strong start to 2019, with 64 percent of survey respondents anticipating gross revenues to increase somewhat or substantially in the next six months.

Record-High Open Positions

According to the Q1 2019 Hiring Forecast survey by Brilliant, a consulting practice, businesses are reporting record-high numbers of open positions in accounting and finance, with elevated numbers of open IT positions and an increase in temporary employment heading into 2019. In fact, 51% of business reported unfilled positions in accounting and finance, up from 48% last quarter.


A Commercial Umbrella for When it Pours!

In our increasingly litigious society,business owners must be prepared for the possibility of lawsuits regardless of company size, location, or industry. A lawsuit could involve large legal fees, plus an award for medical expenses, pain and suffering, or any number of grievances. In addition, negative publicity and lost time resulting from court-related activities can have a substantial impact on your business.

A commercial umbrella liability policy can provide protection in million-dollar increments above the required liability limits of your commercial general liability, auto liability, and employers liability (workers compensation) policies.

How It Works

Umbrella coverage takes effect when the limits of your underlying policies have been exhausted, and may also cover what your current business policies exclude. Typically, a commercial umbrella policy may offer extra protection for legal defense expenses, losses occurring outside the U.S., and personal injury or property damage claims. In addition to covering the named insured, it may also protect your executives, employees, stockholders, and others you agree to protect under a written contract, at least to the extent that losses occurred within the scope of business duties.

However, while umbrellas provide for losses and liabilities above and beyond the scope of other insurance, certain exclusions may still apply. In most cases, you will be expected to maintain your underlying insurance, without alterations in terms or conditions, during the term of the umbrella policy. You may also be required to carry certain amounts of insurance in these underlying policies in order to qualify for an umbrella. But, the cost for your umbrella coverage will likely be lower if your primary deductibles or policy limits are higher.

Regular Reviews

Be sure to review your insurance policies regularly because the amount of umbrella coverage you need may change over time. For instance, changes in your underlying policies, such as new exclusions or limitations, may leave gaps in your umbrella coverage. Also, inflation and ever increasing legal awards often necessitate an increase in coverage.

Your primary insurance may not always provide all the protection you need, especially when an expensive court settlement is involved. Contact us for more information on how you can help protect your business from lawsuits and other potentially catastrophic losses.


Copyright © 2019 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