Launching a tech startup is exhilarating. You’ve got a game-changing idea, a passionate team, and the drive to disrupt the industry. But amidst the excitement, there’s a crucial step many founders overlook: . . .
In the face of economic downturns, the prospect of expanding a company may seem counterintuitive. However, history reveals that successful enterprises often emerge during challenging times. Disney, Hewlett-Packard, Netflix, Citigroup, Groupon, and Lego all thrived during economic recessions, underscoring the potential for growth amid adversity. In this blog post, we’ll explore the key considerations when expanding to a new location during an economic downturn and how to effectively mitigate associated liabilities.
Every expansion comes with its own risks, including property damage, liability claims, and business interruption. Consider working closely with your insurance provider to identify any liabilities related with the relocation site. A customized insurance policy can give financial protection against unforeseen obstacles, allowing your company to navigate uncertainty with greater confidence.
Before expanding, thoroughly examine your contracts for the new location. Ensure that your agreements align with the local regulations and economic conditions. Early contract adjustments can prevent legal complications and financial penalties, providing a solid foundation for your operations.
The talent and well-being of your team are critical to the success of any expansion. Consider offering comprehensive employee benefits and risk management programs to safeguard your team’s health and safety. This not only fosters a positive workplace culture, but it also protects your company from potential liability originating from workplace incidents or employee conflicts.
In the age of digital transformation, companies must emphasize cybersecurity and data protection. With the rising risk of cyber threats, make sure your company invests in strong cybersecurity procedures to protect sensitive data. Also, establish a robust IT infrastructure by assembling a dedicated IT team and conducting comprehensive training programs to ensure seamless technological integration and data security. To reduce potential financial losses, look into insurance solutions that cover cyber liabilities like as data breaches and cyber attacks.
Proactive adjustments are key to successful expansion. Waiting until the last minute can lead to complications and hinder the relocation process. Implement changes early to streamline operations, mitigate risks, and ensure a seamless transition.
The talent and well-being of your team are critical to the success of any expansion. Consider offering comprehensive employee benefits and risk management programs to safeguard your team’s health and safety. This not only fosters a positive workplace culture but also protects your company from potential liability originating from workplace incidents or employee conflicts. Expanding to a new location during a contracting economy requires careful planning, risk assessment, and strategic decision-making. By working with a reliable insurance company and implementing a comprehensive risk-management strategy, your business can not only survive but also thrive during difficult economic times. Don’t forget that proactive actions and a carefully considered insurance plan can be your company’s shield against liabilities, enabling you to expand with peace of mind and resilience.
We can help you find the best policy to provide the coverage you’ll need to bounce back if attacked.
Featured image credit: Envato Elements by Rawpixel | Licensed | All Rights Reserved
The insurance landscape in California is undergoing a significant shift, with major carriers reducing their presence in the state’s market. This development has led to the emergence of a “hard market,” characterized by rising rates and limited coverage options. In this blog, we aim to shed light on what a hard market means for consumers and why it’s a cause for concern.
A hard market refers to a period in the insurance industry where rates increase, coverage becomes more limited, and insurers become more cautious about taking on risks. This tightening of conditions stems from various factors, including rising construction costs, catastrophic events like wildfires, and regulatory constraints.
As insurance carriers withdraw or reduce their presence in California, consumers are left with fewer options to choose from when it comes to securing coverage, which leads to higher prices and potential gaps in insurance protection.
In fact, one of our clients, a construction contractor, recently received a notice from their insurance carrier. They were informed that their carrier would be discontinuing coverage for their warehouse location in Riverside. With a notice period of just 90 days, the contractor was faced with the challenge of finding alternative insurance options within a limited timeframe. This example highlights the difficulties companies encounter in obtaining affordable insurance and the impact it has on their operations and overall costs.
Homeowners are also affected by the hard market, as limited coverage options and rising premiums make it more challenging to find affordable and comprehensive homeowners insurance. This can lead to financial hardship and potential gaps in coverage, leaving homeowners exposed to significant risks.
The emergence of a hard insurance market in California brings forth challenges for consumers, including higher premiums, limited coverage options, and potential gaps in insurance protection. It is essential to be aware of these market dynamics to make informed decisions and explore alternative options to secure the necessary coverage.
Working with insurance professionals who understand the complexities of the current market can help navigate the challenges and find the best available solutions.
Featured image credit: Envato Elements by rfaizal707 | Licensed | All Rights Reserved
In the world of insurance, there are so many acronyms to keep track of. Today, let’s chat about Employment Practices Liability Insurance (EPLI).
More specifically, we’re going to cover the industries that need EPLI as well as answer the question, does your construction business need it? If so, why?
Employment Practices Liability Insurance, or EPLI, is insurance that “provides coverage to employers against claims made by employees.”
Employment Practices Liability Insurance policies typically extend coverage to the following:
According to Amtrust Financial, the below are also common employer missteps that may be covered:
According to Advisen, only 32% of all construction firms with 50 to 200 employees and 20% of all firms with fewer than 50 employees have stand-alone EPLI coverage.
This statistic is low and frightening as the costs associated with EPLI claims can be shocking.
EPLI claims can be detrimental to businesses of all sizes and types. EPLI helps protect against many kinds of employee lawsuits, which is why it’s important for businesses to invest in coverage.
The fact of the matter is that some industries are more susceptible to these types of claims than others. These industries include:
An additional industry that should consider EPLI is construction. Continue reading to find out why.
The answer is most likely ‘yes.’
The construction industry is known for its rapid growth and often accompanying layoffs, which can lead to a particular job being eliminated or terminated.
Additionally, due to the fluctuating nature of contract work, contractors may find themselves vulnerable to wrongful termination and potential discrimination claims.
Employees also often introduce post-employment wage and hour claims, which stem from improper overtime and breaks.
Lastly, when contractors work, they often come into contact with the public which can lead to remarks or actions that other people find objectionable. It is difficult for employers to prove these allegations due to not being present for the incidents in question.
So, how can an employer minimize expensive EPLI claims against their construction business?
Most importantly, study and adhere to the guidelines established by the Equal Employment Opportunity Commission (EEOC). Some of these guidelines include:
EPLI is important for any business, but it’s especially important for construction companies. If you’re in the construction industry, make sure you have the right EPLI policy in place to protect your business from employment-related lawsuits.
As discussed above, hiring employees carries inherent risks. Because of this, we’ve put together a few tips on how to reduce your risk when hiring, in California specifically.
Since even before the pandemic, millions of Americans have left their jobs. In fact, we have more than three million fewer Americans participating in the labor force today compared to February of 2020, according to the U.S. Chamber of Commerce.
So, how can you ensure you don’t create your own labor shortage as a business owner? Read on for our best tips.
What are the signs that a business has great company culture? High employee retention, transparent communication, employee benefits, employee recognition, opportunities for development… The list goes on.
But how do you get to this level? To create a strong company culture, you should consider the following:
Of course, this is a shorthand list of things you can do. Building a strong company culture is crucial to ensuring you maintain the workforce you do have, and don’t create a labor shortage for your own business.
Your workplace, regardless of your industry, needs to be safe. This includes big-ticket items like following any regulations and codes as well as small things like ensuring rugs are adhered to the floor to prevent tripping, for example.
Ensuring your workplace is safe will help increase employee retention and lower your risk of receiving workers’ compensation claims against your business. It’s a win-win.
Read on to learn more about rising workers’ compensation claims and what you can do.
What opportunities are you providing to help your employees grow? Are you paying for outside training? Seminars they’d like to attend?
Increased employee retention is one of the best benefits of a successful learning and development (L&D) strategy. In fact, according to a LinkedIn study, “94% of employees would stay at a company for longer if the business was investing in their career development.”
Implementing learning and development opportunities for employees can help:
In fact, research shows that “businesses that have actively interested and dedicated employees see 41 percent lower absenteeism rates, and 17 percent higher productivity.”
Consider: What training and development might your employees benefit from?
Of course, we wouldn’t be who we are without mentioning insurance. Having the proper coverage for your business makes for safer operations and employees.
Although the types of insurance your business needs vary on a case-by-case basis, most businesses need the following types of coverage at a minimum:
Read on to learn how much business insurance should cost.
Our biggest overarching rule is this: Focus on what matters most. Employee retention is all about making your workforce feel special, valued, and safe. Take some time today to think about how your specific business might achieve this.
Interested in learning more about the labor shortage? Read on to see how the California labor shortage is affecting the construction industry.
The Occupational Safety and Health Administration (OSHA) is a government agency whose mission is “to ensure safe and healthful working conditions for workers by setting and enforcing standards and by providing training, outreach, education and assistance.”
Congress created OSHA with the Occupational Safety and Health Act of 1970.
Over the years, OSHA has continued to stay dedicated to its mission, which has resulted in the creation of its ‘On-Site Consultation Program.’ Here’s more on OSHA’s consultation services and how these services can help high-risk businesses.
OSHA’s Consultation Program offers safety and health assistance to employers through on-site visits. These services help prevent occupational injuries and illnesses within a business.
According to their website, “consultants from state agencies or universities work with employers to identify workplace hazards, provide advice for compliance with OSHA standards, and assist in establishing and improving safety and health programs.”
According to their website, OSHA “offers no-cost and confidential occupational safety and health services to small- and medium-sized businesses in all 50 states, the District of Columbia, and several U.S. territories, with priority given to high-hazard worksites.”
OSHA’s on-site consultation program helps your business by addressing hazards in the workplace.
Additionally, during an on-site visit OSHA consultants:
These steps help reduce injury and illness rates, lower workers’ compensation costs, improve worker morale, and increase productivity. As well as helping to identify, analyze, and remove hazards, use safer work practices, improve safety programs, strengthen safety culture, and provide training assistance, according to the California Department of Industrial Relations.
Best of all, OSHA’s on-site consultation program is free of charge. Throughout this consultation, OSHA does not issue citations or propose penalties for violations, and it is confidential. “Your name, your firm’s name, and any information you provide about your workplace, plus any unsafe or unhealthful working conditions that the consultant uncovers, will not be reported routinely to the OSHA inspection staff,” according to OSHA’s site.
On-site visits might include:
Interested in learning more about OSHA’s on-site consultation program? Download their small business handbook, which is chock full of information and self-inspection checklists.
Payment and performance bonds… The two are an odd pairing—unique in their own way yet dependent on each other.
Although payment and performance bonds have their differences, both are essential in protecting yourself in the world of insurance. Let’s explore the differences below.
What is a payment bond? Simply put, a payment bond guarantees payment for subcontractors and payment for materials once a project is completed.
Payment bonds are most commonly seen in construction. Payment bonds are a type of surety bond and are required for most state projects based on the Miller Act.
What is a surety bond?
A surety bond is a contract where one party (the surety company) guarantees the performance of certain obligations in a contract of the second party (the principal or the insured) to a third party (the obligee).
Surety bonds are needed for most licenses in the state of California and other states as well. Some examples of who might need a surety bond include:
Licensed bonds are required in many states to do business and are put in place by the state to protect consumers.
The insured, or principal, purchases these bonds in an amount prescribed by the state to pay the obligee (the state), in case there’s a claim against somebody’s license.
As previously mentioned, surety bonds are required for most state projects based on the Miller Act.
The Miller Act was passed by the U.S. General Services Administration Public Buildings Service (GSA) to explain how payment bonds protect subcontractors and suppliers.
The GSA responds to any reports of nonpayment, following the legal action needed and protected by the Miller Act.
The GSA states that “the Miller Act requires that prime contractors for the construction, alteration, or repair of Federal buildings furnish a payment bond for contracts in excess of $100,000.”
There are legal consequences for breaking a contract through the Miller Act.
The GSA expands: “Failure by a contractor to pay suppliers and subcontractors gives such suppliers and subcontractors the right to sue the contractor in the U.S. District Court in the name of the United States.”
The main difference between payment and performance bonds is that a performance bond ensures that the employer is satisfied with the job.
While both payment and performance bonds are surety bonds, performance bonds are visible in industries outside of construction.
A performance bond, according to Investopedia, “ensures the completion of a project.” A performance bond covers the ability of the contractor to perform and finish the job as per contract requirements.
If the contractor doesn’t perform, the contract bond kicks in and helps to pay for the completion of that performance.
A performance bond involves three parties:
If these bonds are used and there’s a claim on a bond, the contractor who purchased the bond has to pay that back.
This considered, surety companies look for strong financials in a company, including assets, lines of credit, and letters of credit.For more information, watch this video about surety bonds and contract bonds. There, Brenda Jo Robyn, founder of Competitive Edge, lays it all out on the table in a way that’s easy to understand.
Cyber attacks are on the rise—and no business, big or small, is immune to the devastating financial loss that a cyber attack can have. So, let’s discuss a few aspects of cyber attacks to look out for, including:
Let’s dive in.
Phishing is an ever-growing concern defined as the “technique for attempting to acquire sensitive data, such as bank account numbers, through a fraudulent solicitation in email or on a website, in which the perpetrator masquerades as a legitimate business or reputable person.”
According to Brenda Jo Robyn, founder of Competitive Edge Insurance, phishing is “any activity that compromises your organization’s security.”
For more on phishing, read our article: “Why Is Phishing the #1 Thing Killing Small Businesses?”
Let us provide an example of the dangers of phishing.
On February 5, 2021, according to The Pew Charitable Trusts, “a plant operator for the city of about 15,000 on Florida’s west coast saw his cursor being moved around on his computer screen.”
The cursor continued to move, “opening various software functions that control the water being treated [and boosting] the level of sodium hydroxide—or lye—in the water supply to 100 times higher than normal.”
If you didn’t know, the consequences of this breach could have been deadly if not caught immediately, as lye poisoning can result in:
While most cases might not involve the extremes of lye poisoning, this example shows the severity of phishing today. As a result, governments, states, businesses (big or small), and individuals should act accordingly to strengthen their cybersecurity efforts.
The consequences of a cyber attack on a small business are particularly severe. 60% of small businesses that have been hit by a cyberattack end up shutting down within six months of the attack.
Despite the irreversible aftermath of falling victim to a cyber attack and the fact that 43% of online attacks are now aimed at small businesses, CNBC reports that only 14% are prepared to defend themselves.
Interested in some more statistics?
Cyber attacks are not only extremely expensive to recover from but they also damage your business’s reputation and productivity, and can even be dangerous in the event of personal data being stolen.
This is why it is crucial to protect your small business from cyberattacks. But how can you protect yourself? What can the Florida plant case study teach us?
Luckily, there are measures you can take to prevent phishing as a business owner. Let’s discuss some options.
Be sure to document your training and review it on a weekly or quarterly basis with employees and staff.
Ensure your business is conducting thorough, routine cybersecurity due diligence.
According to Security Scorecard, cybersecurity due diligence is “the process of identifying and addressing cyber risks across your network ecosystem.” Doing so provides “insights into potential gaps in network security so that they can be addressed before they are exploited by cybercriminals.”
For those who are interested in seeing where their business is in terms of safety, read on to learn how you can measure your company’s cybersecurity risk.
When it comes to cyber risk, there’s nothing worse than being ill-prepared. Of course, we couldn’t write about cyberattacks without mention of investing in a cyber liability insurance policy for your business.
A cyber liability policy might include:
As a small business, you must be prepared—because the consequences can be insurmountable. Interested in learning more about cyber insurance and why you need it? Read on in our article “Why Does My Business Need Cyber Insurance?”
The cannabis industry continues to grow every day. With this, comes a new space for industry coverage. In this article, we’ll discuss changes in cannabis insurance; including how the industry has evolved, cannabis business insurance challenges, and how to insure your high-risk business properly. Let’s dive in.
As we previously mentioned, the public’s reaction to cannabis has shifted time and time again throughout history. Even just ten years ago, one might’ve laughed if you told them that in 2020, cannabis sales would hit an all-time record of $17.5 billion. In fact, from just 2019 to 2020, the industry experienced a 46% increase in sales, according to Forbes.
To put things in perspective, according to PropertyCasualty360, cannabis sales may reach up to $37 billion by 2024, which means “the U.S. legal cannabis market would still outpace annual craft beer sales and generate more revenue than toothpaste, hard seltzer, and the NBA combined.”
The decision of many U.S. states to have made cannabis legal today is still controversial on some level.
While many people turned their noses up at cannabis being made legal, it’s interesting to remember that the drug actually “enjoyed a 5000 year history as a therapeutic agent across many cultures,” until the Marijuana Tax Act of 1937, which prohibited its use and sale.
The cannabis industry continues to evolve every day.
With the now booming cannabis market, comes a new space for industry coverage. There are unique cannabis business challenges, which we will discuss below. If you’re interested, however, in the difference between cannabis and hemp insurance, read on here.
One particular challenge of the emerging cannabis industry is properly insuring your cannabis business. According to Yahoo Finance, cannabis insurance “help[s] strengthen and legitimize marijuana-focused businesses. It protects them against:
Insurance is essential to protecting any cannabis company as it minimizes liability and risk exposure. But that doesn’t mean it’s easy to find the right coverage.
“The good news is the cannabis insurance industry has come a long way in a short time,” says Ian Stewart, founder and chair of the national cannabis and hemp law practice at Wilson Elser.
“These days it is not so much about whether companies can obtain coverage, but more about what lines are available and the limits,” says Stewart. “The variety of insurance vehicles is expanding.”
These varieties include:
As the cannabis industry continues to grow, we gain a better understanding of how it works and it’s loss history.
More difficult coverage types to write for cannabis businesses, according to Stewart, include:
Cannabis insurance falls into the realm of high-risk insurance. According to PropertyCasualty360, “insurers that provide coverage to cannabis businesses engaged specifically in selling marijuana can be criminally liable for aiding and abetting in the sale of marijuana or conspiring to violate the CSA — even when the business’s activity is legal under state law. Further, intrastate issues may also cause complications if marijuana is not regulated uniformly within a state.”
For these reasons, it can be more difficult to find proper coverage.
Legal cannabis companies require specific cannabis insurance expertise. Since the industry is still blooming, there are not as many experts as one would yet hope for.
The most important part of insuring your cannabis business is working with a knowledgeable insurance provider, one who understands the specific needs of your high-risk business.
Depending on whether you’re a dispensary, cannabis manufacturer, cultivator, delivery business, physician, or so on, all of these branches face a different set of challenges, which, in turn, require different cannabis insurance policies.
These insurance policies, according to Embroker, might include:
The steps to insuring your cannabis business can seem daunting. That’s why we recommend you enlist a trusted expert who has experience insuring this high-risk industry. This way, you can partner with someone who understands the specific needs of your cannabis business to create an effective risk management strategy.
Contact Brenda Jo and her team at Competitive Edge to learn more.