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Business Newsletter - May 2018

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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. 3

Protecting Your Business on the Road


When an employee drives for business purposes, your company is technically behind the wheel. Whether the trip involves one employee driving his or her car to the office supply store or several delivery vans, your company could be held responsible for any accident that might occur during the trip. According to the most recent data from the Bureau of Labor Statistics (BLS 2017), there were 2,083 motor vehicle-related incidents reported as on-the-job fatalities in 2016. 
 
Ideally, a business auto risk management program addresses all automobile risks your company may face on a daily basis. Fleets, passenger cars, vans, and other vehicles driven by employees on company business should be factored into your risk management program. Without proper planning and insurance, transportation operations, such as sales calls and errands that require employees to drive their personal vehicles or those owned or leased by your company, may result in business loss. Taking preventive action to reduce motor vehicle accidents before they occur is the first step toward any successful business auto risk management program. 
 
There are many strategies that may improve the safety of your employees on the road, but they 
 all share one important focus, prevention. Here are a few steps you can take: delivery van
 
Screen job applicants. Anyone can have a car accident, regardless of his or her driving ability. Inquiring about a job applicant's driving record and performing a drug test could save you from hiring a potential risk. Driver attitude and behavior also are important considerations. 
 
Encourage consistent use of seat belts. According to the Network of Employers for Traffic Safety (NETS, 2016), U.S. employers are collectively spending an extra $5 billion per year on traffic crashes involving employees who did not wear a seat belt while driving or riding as a passenger, whether they were on the job or off. In addition, medical costs paid by employers per employee injured in a crash were nearly double in on-the-job crashes where the employee was not wearing a seat belt and increased by a third for off-the-job crashes. 
 
Choose vehicles with a focus on safety. Vehicles that are equipped with safety features will better protect your employees in case of an accident. Seat belts may be the most effective safety feature, and they can be found in every new vehicle. Airbags, anti-lock brakes, and daytime running lights are also important safety features. 
 
Even your best efforts cannot prevent all accidents. An effective business auto risk management program is not complete without a sound insurance plan. Be sure you know what your business auto policy covers and what it does not. You'll find the details of your coverage on the policy declaration page. As your business grows and changes, make sure your insurance protection is adequate. Consider the following: 
 
Non-owned auto coverage. Be certain your policy covers your employees' use of their own vehicles for company purposes. Your policy should indicate coverage for "non-owned autos." This is often designated by symbol 9 on your declaration page. 
 
Choosing the same carrier. Depending on the nature of your business, consider purchasing your business auto policy and your commercial general liability policy from the same insurance company to avoid possible complications when a claim could be covered, or excluded, by both policies. 
 
Coverage for vehicle contents. Vehicle contents are generally not covered by a business auto policy, so you should make sure proper coverage is in place via the policy providing your business personal property coverage. 
 
A sound auto risk management program analyzes the best ways to protect your property from fire, theft, collision, and other losses. There are many options available to meet your business auto needs. Assess your company's current operations to help identify high-risk exposures, and then find effective methods for loss prevention. Remember, a quality business auto risk management program can have a positive effect on your company's bottom line. For more information, contact one of our qualified insurance professionals. 
 
 

When Disaster Strikes: Business Income Insurance to the Rescue


Recent natural disasters have prompted business owners to evaluate their disaster preparedness, risk management, and insurance programs. If a natural disaster were to force you to temporarily suspend business operations, how would you meet your payroll obligations or cover other fixed costs without a continuing income stream from your business? 
 
Business income insurance, also called business interruption coverage, is designed to replace the income your business would generate under normal circumstances in the event of a disaster or other covered loss. It can help your company get back on its feet by providing funds to help cover critical expenses and lost profit until the business is up and running again. Without business income coverage, some companies are never able to reopen after disaster strikes. 
 

Policy Limits

Most policies restrict coverage to business interruptions that cause direct physical damage to, or the loss of, property at the insured site. Special coverage is needed for boiler and machinery breakdowns and off-site power failures. 
 
Besides covering significant fixed costs during a shutdown, you may also require funds to help accelerate your recovery after a loss. For instance, you may need to hire temporary help, rent or purchase new equipment, or rent or move into a substitute facility. These are referred to as "extra expenses." Does business income insurance cover extra expenses? That depends on the policy. Some policies cover these costs, while others do not. You have the option of purchasing extra expense coverage separately. 
 
To determine the appropriate amount of coverage, estimate the maximum probability of time that operations could be suspended by a covered loss, and assess the level of lost profit and continuing expenses that would accrue during the interruption. If keeping your business operating after a loss is essential, determine the cost beyond normal expenses (air freight cost of equipment, overtime pay for construction workers, cost of moving and temporarily operating elsewhere, etc.) to continue during reconstruction. 
 

Be Prepared

It is important to realize that business income coverage is limited to the period of time it takes to restore damaged property. Since time will be crucial right after a disaster, you may want to take some steps in advance that will enable you to take action immediately. Here are a few tips to help you prepare: 
 
Create an action plan noting everything that must be done to resume operations on a full- or part-time basis after a disaster. 
 
Identify all machinery and equipment necessary for business operations and develop a plan to provide backup coverage, if needed. 
 
Locate alternative sources for the materials and supplies you rely on, in case you are cut off from your major supplier. If a supplier is responsible for a sizable portion of your revenue, consider contingent business income coverage for protection should the supplier sustain a catastrophic property loss. 
 
There are many details to be concerned about when it comes to helping your business survive in a crisis. Business income insurance can help provide a key source of funds during a temporary shutdown. For more information, and to address your specific circumstances, give us a call. We would be glad to discuss your coverage options with you.
 
 

Did You Know?


Energy Efficiency Resources 

The ENERGY STAR program sponsored by the Environmental Protection Agency (EPA) offers a number of resources for business owners concerned about energy use and consumption including how to put your computers to sleep, how to choose energy-efficient IT equipment, and how to benchmark your data center's energy efficiency, among others. For instructions on these and more tips on saving energy 
 for your business, visit us at www.energystar.gov
 

Protecting Businesses from Arsonists 

According to the U.S. Fire Administration, you can reduce the risk of your building being targeted by arsonists by installing a combination of burglar and fire alarms, by using motion-activated lighting for the exterior and entrances of the building, check your fire protection system, and control which people can enter your premises. For other helpful information on preventing arson, go to www.usfa.fema.gov
 

USDOT for Interstate Transportation 

Businesses involved in the interstate transportation of passengers or cargo must be registered with the U.S. Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA) and must have a USDOT Number. To obtain a DOT Number, you can complete the USDOT Number forms online at www.dot.gov
 
 

Reducing the Effects of Noise in the Workplace


According to the National Institute for Occupational Safety and Health (NIOSH, 2017), over 22 million workers in the U.S. are exposed to hazardous noise on the job, and an additional nine million are at risk for hearing loss from other agents, such as solvents. An estimated $242 million is spent annually on workers' compensation for hearing loss disability. Extended noise exposure can cause temporary ringing in the ears or other temporary changes in hearing. The ears may also feel stuffed up. Short-term problems usually subside within a few minutes or hours after the noise ceases. However, repeated exposures to loud noise can lead to permanent, incurable hearing loss. 
 
In certain occupations, in industries such as agriculture, mining, construction, manufacturing, transportation, and the military, noise levels are higher and therefore pose a greater risk of hearing loss to workers. Industry-specific studies reveal that 49% of workers in the mining industry are likely to experience hearing impairment by age 50, compared to around 9% of the general population. This rises to 70% for mining workers at age 60. Approximately 48% of plumbers and 44% of carpenters report a perceived hearing loss. The studies also reveal that noise-induced hearing loss is the second most self-reported occupational illness.
 

An Ounce of Prevention

noiseAlthough hearing loss is permanent, it can be prevented. Business owners can take steps to minimize hazardous noise on the job, such as installing a muffler or an acoustic barrier. In addition, employers can provide workers with protective devices, such as earmuffs or earplugs, and can teach proper usage. 
 
The gradual effect on hearing may go unnoticed, especially if at-risk employees are not aware of the potential consequences. To determine the extent of noise pollution, a business can employ a noise evaluation service to measure sound levels in the workplace. In this way, employers may become aware of which employees are most at risk for hearing loss. With regular hearing tests, signs of hearing loss can be detected early and addressed before severe damage results. Preventive measures can reduce workers' compensation claims, eliminate increases in business insurance costs, and prevent Occupational Safety and Health Administration (OSHA) violations and fines. 
 
For more information on hearing loss prevention programs in the workplace, visit www.cdc.gov.
 
 

For Your Information 


Active Workspaces and Millennials 

According to a study conducted by VARIDESK, millennials don't want to work from a cubical; they want an active workspace design that "supports movement, collaboration and social interaction." In fact, the survey found that 75% of respondents would rather work in an active workspace than traditional "cube". Of those that work in an active workspace, 87% are satisfied and only 57% without an active workspace are satisfied. 
 

Digital Transformation Challenge 

Many organizational leaders find digital change to be far more challenging than they expected. Recent surveys find that most organizations recognize the need for digital transformation but lack the knowledge or resources to properly execute things like increasing inbound prospects, sales and revenue; enhancing existing customer relationships; and engaging audiences through more personalized communications. 
 

Tax Reform and the Workplace 

In the first major study of how the U.S. Tax Cuts and Jobs Act will impact corporate relocation, the study found that although the new tax law changes the status of several move-related expenses, corporate commitment to talent mobility remains strong. In fact, 89% of the participating 211 companies expect their mobility volume to increase or stay the same in the coming year, despite the fact that formerly deductible expenses will raise mobility costs. The survey found that relocation remains a top priority of our respondents and they will not let tax law define their mobile talent strategies.
 
 

Protecting Your Business with Boiler and Machinery Insurance


When a mechanical, electrical, or pressure breakdown occurs at your place of business, there's no time to waste. Without the necessary equipment repairs, you may have to close shop until machines are up and running again. In addition, businesses that store perishable products also face the risk of losing inventory due to spoilage.
 
Since commercial property insurance policies generally do not cover mechanical, electrical, or pressure breakdowns, boiler and machinery insurance can be a valuable addition to your insurance program. 
 
Boiler and machinery insurance covers breakdowns to a wide variety of vital equipment, including heating, air conditioning, and refrigeration systems; compressors; steam boilers and steam piping; and electrical systems. Typically, coverage may include the following:
  • Equipment repair
  • Extra expenses incurred to get the business running again
  • Business income that may be lost due to suspended business operations
  • Product loss resulting from equipment breakdowns.
While machinery is at a standstill, your business operations could also come to a halt, so be sure to inspect your equipment regularly to prevent potential breakdowns. We would be happy to assess your risks and provide more information on the appropriate amount of coverage to ensure your business stays in operation during equipment breakdowns.
 

 



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