Archive for the ‘Non-Profit Issues’ Category

Commercial Insurance (for a wide range of industries and business classes)

January 18, 2011

Discussing insurance and thinking of selling insurance always seems easy for me, natural, but when I review the many different types of risks that can be insured, I almost stop in bewilderment!

For example, I was just reviewing an e-mail from one of our markets and here is a sampling of the unique classes they insure for us:

  • Individual personal trainers;
  • Fitness studios;
  • Mixed martial arts;
  • Injectable treatments like botox and collagen;
  • Lipo-laser operations;
  • Laser hair reduction;
  • Teeth whitening;
  • Tanning salons

If that is not a diverse enough sampling, I am happy to try:

  • Demolition contractors;
  • Environmental remediation and abatement;
  • Restoration and emergency spill response;
  • Environmental consulting and assessment.

Or maybe:

  • IT consultants;
  • Website developers;
  • Network support services;
  • Software developers;
  • Data storage/retrieval services;
  • Web hosting services;
  • Computer training.

And if that is not your “cup of tea”, how about:

  • Builders risk and wrap-up liability;
  • For-profit and not-for-profit directors and officers liability;
  • Professional errors and omissions/malpractice liability;
  • Environmental liability;
  • Surety including bid and performance bonds;
  • Trade credit/accounts receivable;
  • Employee dishonesty/fidelity bonds;
  • Product recall expenses;
  • Umbrella liability;
  • Contingent business interruption of a customer or supplier;
  • Franchising, nationally and internationally.

If you are operating a business in Ontario, CANADA – why worry about finding a suitable insurance provider? Avoid worry, save time and guarantee yourself peace of mind by dealing with knowledgeable and reputable providers – broker(s) and insurance companies. Don’t look further than here – A-rated insurance carriers with Canada’s oldest insurance brokerage. We specialize in Commercial Insurance so you don’t need to do the same!

If you operate a franchise in Canada that has franchisees in Ontario, we can provide coverage nationally and internationally, for you. There are many different types of policies available and we have the necessary experience to recommend the one best suited for you.

I can be reached at larryewinsurance@gmail.com

I hope you have as wonderful a year as possible. I am certain to do the same.

Thinking “Outside the Box”

November 15, 2010

Having just completed my President’s Message (Guild of Industrial, Commercial & Institutional Accountants) for the Christmas Season (yes, it is early – at least for me, I don’t try to think about Christmas until December), I decided to digest this week’s numerous events.

I heard an excellent presentation by Faith Seekings at the Toronto Chapter of CIM’s AGM (for anyone who doesn’t know, CIM is the Canadian Institute of Management) with whom I am fortunate to be connected by LinkedIn, Facebook and Twitter, as well as personally. I highly recommend her for anyone looking to synchronize their marketing efforts to show some level of uniformity from a website to business cards to stationery, brochures and corporate image.

Yesterday, I also heard someone whom I have wanted to see in person for awhile, now – Wolfgang Jaksch – and the introduction by MediConsult of their new iMRS which will be available in North America in early 2011. My wife has been treated by a health professional with the current MRS offering and I try to keep an open mind concerning anything in life so that “electro-magnetic resonance” is, obviously, something I want to know more about. Wolf even ended his presentation with an introduction to a new online “health network” – www.wellaxy.com – and I wish to promote this site for good health and health-related exchanges of information.

What else is happening, from a business standpoint? It seems that my best month for new business in 9 years (yes, September was amazing) has been the catalyst for some “good luck”, though hard work seems to be the oxygen that ignited the flame. I have been attempting to close a deal for a home builder and was introduced to a realtor who also has need of commercial insurance. Then another home builder and I spoke about insuring “common elements” for a condo complex they are constructing – seems that their insurance broker may not have known it possible to insure (what other reason for the lack of service since it took them so long to provide a reply).

One account on which I have been working has added 6 other properties to insure and a former small business client of mine has asked me to quote on his business again. Recently, I insured a flea market booth for a long-time acquaintance of mine who then proceeded to provide me with a directory of listings to assist me in my solicitation efforts. Another source of business referred prospective clients to me, a new business associate has asked me to work with her on some clients and a member of the Guild of ICIA & CIM has asked me to prepare a quote for a new business of his.

Whether it be general commercial property/liability, commercial auto, Directors’ & Officers’ Liability, Builder’s Risk, Liquor Liability, Group Home/Auto or something as unique as “franchises”, “student rooming houses”, “hot dog carts”, “chip wagons” or Specialized Liability (including Product Recall and Errors & Omissions), I am ready to discuss with you.

My spreadsheet of activity for 2011 is quite substantial – including “hot” files and “cold” files that I hope to move into the warmer category during the next year. What is the reason for much of this activity and confidence? In the past, I felt that I needed to quote “apples to apples”, even if I did not agree with the coverage and deductibles. With limited markets available, it meant that I was unable to provide suitable quotes to a prospect to enable the closing of a deal. Now, our carriers are numerous – enabling us to offer reduced premiums and better coverage in most cases, allowing me to provide terms that I feel are the best for the client’s long-term insurance needs.

Why should a client have low deductibles ($500 or $1,000) if the business is most suited to $5,000 or $10,000 (or higher) deductible – yes, premiums will be lower but the client will not be faced with considering his/her filing a small claim that might mean a policy being non-renewed or having terms amended and fewer insurance companies wanting to insure that client. As the client’s “risk manager”, I might be making the decision but am expert enough to realize it is in the best interest of that client. That is a big difference, the difference from prior packaging and presentation. Confident, yes! But better yet, experienced and certain – not thinking inside old parameters but “outside the box”.

How Much Employee Dishonesty Insurance Should Any Business Owner Or Non-Profit Organization Purchase?

December 2, 2009

EMPLOYEE DISHONESTY COVERAGE (FIDELITY BONDS)

A USUALLY OVERLOOKED COVERAGE!

One of the most severe crime problems any business owner or non-profit organization can face is that of a loss from employee dishonesty.  Amazingly, this insurance coverage is often overlooked!  The loss of merchandise, valuable records, accounts receivables, and money and securities from dishonest acts of employees has been estimated to cause 30% of business failures!  For every dishonest employee caught, it’s estimated that another 100 are not and, thus, get away with their crime!

Insurance coverage for Employee Dishonesty is usually purchased in one of two forms:

  1. Commercial blanket coverage, which provides a blanket limit covering all employees.  The amount of the bond is an aggregate or all-inclusive limit.  It is the most that could be paid in any one loss.
  2. The blanket position bond also covers all employees, but the difference is that the limit of the bond applies to each employee separately.

For example…a firm suffers a loss of $30,000 caused by three employees acting in collusion.  If the firm carried a $10,000 commercial blanket bond, total recovery would be limited to $10,000.  This is the maximum for one loss, regardless of the number of employees involved.

If the firm carried a blanket position bond of $10,000, recovery would be the full $30,000.  The $10,000 limit applies separately to each employee involved.

There is a formula that was developed and tested by two reputable American organizations who know all about dishonesty and its financial consequences.  It provides the best basis available for determining the amount of coverage needed per loss and can be accessed by contacting the WRiskManager to work with you.  Do you need to review the amount and kind of coverage you have?  We will be happy to assist at a very affordable cost!

For any business-owner, non-profit, lawyer or accountant – why not communicate with us for a simple and inexpensive means of protecting against a potentially significant financial loss?

We are just an e-mail away—an e-mail that might save you from a catastrophe.

Larry.wettlaufer@riskreview.ca  aka WRiskManager

Directors’ & Officers’ Liability Insurance general information

October 27, 2009

What is Directors’ & Officers’ Liability Insurance?  What does it do; who does it protect; why buy it?  These are just a sample of questions anyone in the business of D&O (buyer or seller) will have heard throughout their years of working in this particular specialty of insurance.

I once heard an esteemed partner in a well-recognized law firm offer that, in Canada, if there were 100 insurance companies that sold this form of insurance policy one would not find 2 identical policies anywhere in the country – can you imagine that this might be any different in the USA?  I can’t.

Who sells Directors’ & Officers’ Liability (more commonly called D&O) today?  Many insurance companies will offer the coverage but some will only write the “non-profit” market or Not-For-Profit Organizations, Associations, etc.  Others will write both classes (“For Profit”, as well) of business and still, other sources might include the “wholesale” marketplace or Managing General Agents (MGA’s).  These MGA’s attempt to access markets (e.g. Lloyds’) and design a policy specific to an industry or sector, in some cases.

What might be the Purpose of D&O insurance?  A simple response might be “good corporate governance” but nothing will truly be simple in a discussion of D&O.  Why is D&O necessary?  Legislation and the many decisions of the world’s Judicial System have required that anyone in the place of a Director and/or an Officer of any Corporation be protected due to the large personal risk that one faces – the loss of “personal assets” of a director/officer.  In the case of a “volunteer” director on a board, can you imagine explaining to your spouse that your family may face the loss of your home, business, savings, etc. when you have been volunteering for a church, service group, social activity, or other worthwhile cause and are named in a lawsuit?  Absolutely ridiculous!  Correct?  NO!  What about those individuals who served as Directors or Officers in prior years?  Yes, past and future directors can be covered by the insurance policy, as well as current directors.

What is covered by a normal policy?  Legal and Defense Costs (have you recently asked a lawyer who specializes in this area, how much their hourly rates are?), Damages, Settlements and Judgments are normal and, most people will agree, can be quite substantial.  Actual or “alleged” wrongful acts are covered but what will not be covered (nor should it be) are Fines, Penalties and other charges deemed uninsurable (e.g. profits or gains realized due to insider information).

Some of these acts may be “negligent”, “errors”, “omissions”, “misstatements”, “misleading statements”, “neglects or breaches of duty”, etc.  but will NOT cover “acts of bad faith”, “bodily injury or property damage” (that is what other Liability insurance covers), “claims relating to employee pension or welfare plans”, “environmental claims” (again other Liability insurance can be obtained for that), “claims resulting from facts known prior to the inception of coverage”, “failure to maintain insurance:, etc.

Claims can be brought by shareholders, creditors, employees, suppliers, competitors, government bodies, etc. – can you think of anyone who is not included here?

What about the corporation that no longer exists due to wind-up or other reasons?  Yes, the policy can have an “extended reporting period” whereby the insurance company will extend coverage for an additional term for additional premium, usually less than the full term’s cost.

Examples of claims could include any of the following:

  • Class action lawsuits against a Board of Directors for alleged mismanagement – hindsight will definitely be 20/20 so who is to determine that there was actual mismanagement?
  • Damages against various directors and officers of a firm for alleged non-disclosure of financial conditions and performance (I have an example where a bank claimed this from a Borrower);
  • Shareholders questioning whether their interests were adequately represented by the Board of Directors;
  • Corporate Governance issues which have become a major source of concern to the financial markets and to governments;
  • A suit against a group of directors over a dispute about the value paid by one company for another (and the odd item of note, here, was that the D&O insurance did not survive the takeover);
  • A public offering of stock where directors are quoted as touting the prospects where the stock fails to perform in a manner consistent with those statements and shareholders subsequently sue for damages, “alleging that they were induced to buy at an inflated price because of the excessive promotion of the stock by its directors”;
  • A wrongful termination of an employee, whereby an employee argues that a “sales decline was due to a weak economy and failure of the company to keep its prices competitive”;
  • The directors of a struggling company were unaware that management was using Sales Tax collections to finance the day to day operations and when the company took bankruptcy with unremitted tax monies, the government assessed the directors personally for outstanding tax liabilities;
  • Unpaid wages in the event of a bankruptcy;
  • Sexual harassment and discrimination;
  • And the list can go on.

What makes “non-profit” so different from “for-profit”?  Many of the above examples are strictly for profit, right?  Yes, most are but a non-profit organization can have instances of termination, harassment and discrimination, too!

One of the differences is that a non-profit may need and benefit from a “duty to defend” clause in their policy whereby the insurance company is required to defend the lawsuit, as opposed to participating or reimbursing an Insured following a judgment.  Some companies will even cover for administrative errors and omissions and not have a specific exclusion for “failure to maintain adequate insurance” (WOW!).  This may be a small benefit to a non-profit but is an example of a major difference from insuring a “for-profit corporation”.

There will be many other questions that a reader may have but this information should give an overview of Directors’ & Officers’ Liability insurance, the importance of obtaining and some of the differences between the two types of coverage available.

Please feel free to comment or ask further questions.