Posts Tagged ‘Employment Practices’

Employment Law, Wrongful Termination/Dismissal & Employment Practices Liability Insurance

August 7, 2013

Often, writing a blog can be very challenging.  What should I blog about?  So, I procrastinate – doesn’t everyone when a task seems tedious?  This time, however, I have to admit that I can hardly wait to write – just trying to arrange my thoughts in an orderly fashion so you will better understand me.

An opportunity arose during this past year whereby a client purchased, upon our advice, an insurance policy for Directors’ & Officers’ Liability (D&O) AND Employment Practices Liability (EPL) – a very wise decision.  Why?  Well, first I’ll explain that a wonderful online acquaintance of mine, a legal expert whose sole practice is devoted to Employment Law, tells me that “defending any claim will easily involve tens of thousands of dollars in legal fees” so I have been targeting those businesses who can least afford this type of event taking place, small to medium sized incorporated entities. 

Now, it is time for me to tell you about my client.  The employer/owner, upon seeing a long-term employee abuse his trust, stealing inventory from him, decided to suspend the employee until all circumstances were properly investigated, documented and, seemingly, took adequate steps to terminate or dismiss that employee.  Guess what?!  The employee met with legal counsel and has now presented his former employer/my client with a lawsuit for $100,000!  YES, that’s right – the former employee is now suing for Wrongful Dismissal/Termination for this shocking amount.

How many of you business-owners could continue to operate your firms if faced with this type of lawsuit?  Even if the case is dismissed, how many of you can afford the “tens of thousands of dollars in legal fees” you might face?  Will your bankers be happy if you have to use your lines of credit or approach them for additional financing?  As a former banker, you might not actually be able to obtain affordable credit for a request of this sort or you may be in violation of loan agreements where you already have, in place, approved lines of credit should you lose a suit for this amount and lack adequate liquid capital.

Let me further explain a few additional details.  The client is typical of many or most small businesses that I know, having fewer than 20-25 employees, no legal counsel on retainer (how many of us do?), inadequate Human Resources personnel/training to handle situations like this, slim operating margins AND be aware that they can AFFORDABLY purchase insurance to protect against a potential claim of this sort.  There is a time limit to respond to a legal suit or you will be found to be guilty and how many of you know of proper legal counsel – assuming you don’t have insurance of this kind – who can, adequately, defend you?

What do I mean by “affordably”?  Let me run some examples for you Accountants!  In many cases I can prepare for you within two minutes through an online portal to one of my exceptional insurance carriers for this class of business.

#1 – Company with $500,000 Annual Revenues, 4 Full-time Employees in Canada, $1,000,000 D&O, $500,000 EPL – ANNUAL COST $840 + PST;

#2 – Company with $3,000,000 Annual Revenue, 12 Full-time Employees in Canada, 1 Full-time Employee in USA, $1,000,000 D&O, $1,000,000 EPL – ANNUAL COST $1,470 + PST;

#3 – Company with $5,000,000 Annual Revenue, 10 Full-time Employees in Canada, 3 Full-time Employees in USA, $2,000,000 D&O, $1,000,000 EPL – ANNUAL COST $2,228 + PST;

#4 – Company with $30,000,000 Annual Sales, 25 F/T Employees in Canada, 5 F/T Employees in USA, $3,000,000 D&O, $2,000,000 EPL – ANNUAL COST $4,620 + PST;

#5 – Company with $50,000,000 Annual Sales, 75 F/T Employees in Canada, $5,000,000 D&O, $3,000,000 EPL – ANNUAL COST $8,125 + PST

These examples are only that – we will still need to verify some information to ensure a firm qualifies but, when comparing the annual cost vs the “tens of thousands of dollars in legal fees” (provided you don’t lose a lawsuit), it is easy to see why I believe this insurance protection is now affordably priced for any incorporated business.

Can you sleep easier at night by investing two minutes in following-up with me?  I can be reached easily by e-mail – larryewinsurance@gmail.com

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Social Media and its impact on your business and mine!

October 26, 2012

Coming through one of my busiest seasons in several years offers some unique insights as I continually review what I do correctly and analyze how to improve.  Does Social Media have any impact on the “why” I have been successful recently?  YES, unequivocally! 

 

What I see, however, are people who want value but expect to pay the lowest insurance premiums for what they buy, meaning they usually obtain less than they want.  Unfortunately, what is so easily forgotten is that there are many differences between insurance policies and that cost should only be 1 factor!  What else should be considered?  How do “you” determine who you should be buying from and what you should be buying?  Do you like the salesperson or do you “trust” the individual advising you?  What should be important to you, believing the provider of your coverage or asking questions and evaluating the honesty and integrity and knowledge of that person?  How should you evaluate that person and the professionalism exhibited?    

 

One new client asked that I quote a second insurance policy because he valued my opinions.  What he didn’t know (and, apparently, hadn’t been explained by his prior insurance broker) was that the insurance company he is insured through increased his premium when he purchased the building from the previous owner.  This was due to the added risk that his “operating” business, as a tenant in the building, had on the property’s insurance. 

 

What value did I offer to this client?  We discussed Risk Management to reduce his potential for any insurance claim and also various deductibles, necessary and optional coverage, etc. to lower his insurance premiums.  I found many other insurance companies did not want to quote the building insurance and suggested that he be happy with what he had and he appointed me the broker for his business.  Knowing he will implement some of my suggestions will permit our brokerage to shop his renewal in subsequent years and maintain lower pricing for his insurance, a win-win for both of us. 

 

As for his “operation”, isn’t it nice that I can promote his business through my own online activities?  When my competition is reluctant to have an online presence on Twitter, Google+, Facebook, LinkedIn and Pinterest – well, how many of your customers or potential customers are using Social Media now?  Wouldn’t you like to connect with them or have someone, maybe a business partner, promote you to other businesses, increasing your sales and profit?

 

As an insurance broker, I know there are major differences between the “intermediaries” (insurance salespeople) and not just insurance companies and policies.  Offering my various and large online networks should assist you, especially in comparison with my competitors who are not online in any manner.  Additionally, I try to find information of importance and interest to you and disseminate in a timely manner so that you understand the many opportunities and various risks you are or may face in your business at the present time or in the near future.

 

Some of these risks include Occupational Health & Safety, Employment Practices, Human Rights Legislation, Business Continuity Planning, etc.  I am on the mailing lists of various law firms, consultants and governments, agencies and regulators to help you!  Some of these issues may involve insurance but many may only, indirectly, due to the changing environment concerning “risk”.  Imagine using contract workers, for example.  What if the employment agency doesn’t submit EI or W/T?  Do you know you can be held responsible, individually?  What can you do to avoid this?  Should you purchase additional insurance protection to cover in the event of something like this? 

 

Let’s talk!  If your insurance provider is not offering suitable professional assistance to you, maybe you need to make an immediate change?!