Hiring new employers can be risky for company culture and the bottom line. 

Since new employees are hard to come by, sometimes the decision to hire is rushed and there can be increased risks involved with the hiring process. 

Even Brenda Jo Robyn, founder of Competitive Edge Insurance, screens employees pre-hire on Motor Vehicle Records (MVRs). This checks if they have a clean record and can they legally drive for your company, which ultimately will help with company rates. 

Screening Employees

Who you work with matters.

On one hand, creating a positive company culture will benefit your employees and overall employee retention, which reduces financial and social risk. One way to create this company culture concerns how you screen potential employees in order to avoid a toxic environment. 

A DMV screen costs 60 dollars and has proved to be worth the extra step. This DMV screen includes a general background check and driver’s license check. 

It’s important to require DMV screens every year. This can save your company a lot of time and money in the long run by retaining the right employees. 

Lastly, if your employee is driving on company time, it is important to make sure that the employee has their own car insurance.

Intellectual Property

In California, your client list can be considered intellectual property. In each employee offer letter, however, it’s crucial to have a separate section outlining that all clients will stay connected with the company if they were to leave. 

If you have failed to do so already, you might consider reaching out to current employees and stating the new company policy. 

Physical Space

The separation of class (for example, warehouse space vs. office space) for employees might take a couple of extra steps as a business owner but will reduce risk when hiring new employees. The separation between the physical warehouse and office space is the main separation to be considered as a business owner.

There are regulations for how the space is separated. For example, for some, areas being separated by chain link is considered acceptable. 

Invest in EPLI

The Employer’s Professional Liability, also known as EPLI, causes different claims to arise from employees. There are a few ways to protect your business from a flood of EPLI claims. Employee lawsuits are rising and in return, settlements are becoming even more expensive. Although there are different types of insurance, workers’ compensation and EPLI are both ways to reduce risk with employee benefit plans. 

EPLI is crucial to invest in as a company if it comes to a disgruntled employee—even if you are a small business. In the chance that your company gets sued, your EPLI insurance will cover it.

High-Risk Coverage

High-risk insurance addresses companies whose coverage was either terminated because of a claim, those who are new and cannot get coverage because of industry risk, or those who have experienced drops in revenue or industry disruption such that carriers are broadly refusing coverage. 

You might be wondering, what risk class am I in? Luckily, there are various ways to determine this subgroup:

“An insurance risk class is a way for insurers to underwrite policies based on one’s belonging to a particular risk group.

People in each risk group will generally share similar characteristics that help insurers better estimate the chances that the policyholder will file a claim

Riskier risk groups will pay higher premiums—for example, people who are sick, older, or have a poor driving record.” 

As a business owner, it is important to put the gates, systems, and processes in place to protect yourself, and Competitive Edge is here to help! 

We follow the practices we write about because we believe in the importance of preventative risk. For those who are interested in reading more about what classifies as high risk, read on.