Newsletter

C EOs interested in factors affecting a suc- cessful small- to mid-size company need only look to a recent Pricewaterhouse Coopers survey. CEOs whose companies had annual revenue of $5 million to $150 million were asked what factors were critical to their success or could harm their business during the coming year. Even as a CEO, you can’t control everything that will affect your business. However, there is one thing you can control: retention of your key workers. A whopping 78% of CEOs polled replied that retention of key workers was the most important factor in their com- pany’s continued success for the next year. Flexible business strategies came in second at 47%, followed by partnering with other firms at 31%. Partnering with other firms was deemed especially important by CEOs of serv- ice and technology businesses. Risk manage- ment received nods from only 20% of the CEOs surveyed, but was cited by a large num- ber of product firms. Now the bad news: Although a savvy CEO can affect some of the factors leading to their company’s success, most feel like a storm- tossed ship adrift in a sea when it comes to those factors that could harm their businesses. More than three-quarters of the CEOs surveyed picked a return to weak market demand as the most damaging possi- ble factor during the next 12 months. Coming in a solid second was new govern- ment regulations at 45%, followed by rising interest rates at 34%. Keep your worker bees happy. Retention of Key Workers Pays If you’ve weathered a hurricane or tropical storm before, you might already understand the importance of good flood insurance. All it takes is one large storm to raise water levels considerably, putting you and your employees at risk — not to mention the damage a flood can cause to your equipment, your files, and the ensuing set- backs this damage will cause. The National Flood Insur- ance Program (NFIP) is offer- ing two new preferred risk pol- icy (PRP) products for busi- nesses: products designed as a result of consumer demand for lower-cost flood insurance options. They’ll help the insurance industry reach new customers, offer more options to existing customers and protect agents against errors and omissions exposure. The PRP is an easily written, low-cost flood policy for properties in low-to-moderate risk zones. The first new policy product is a combination building-and-contents coverage available for owners of com- mercial structures, including businesses, schools and farms. For business owners who don’t own their build- ings, contents-only coverage is available up to $500,000. As a prospective customer, you’ll be happy to know that premi- ums for these policies are at least 30% less expensive than standard flood coverage. The new NFIP PRP products make it easy and inexpensive to insure your office and its contents from water damage. For more infor- mation, just give us a call. Flood Insurance Helps Weather the Storm

Starting a small business often takes long days, longer nights and 80-hour weeks. But if you’re carrying your business on your shoulders, who’s carrying you? Or more precisely, who will carry you if you’re no longer able to carry yourself? Unless your business has reached the point that it can run itself, you have a financial crunch coming if an accident or illness renders you unable to work, either permanently or for an extended time. Try this quick mental exercise. Imagine that you’ve just won an all-expenses paid vacation. Congratulations! You can go anywhere you like for two full weeks. Will your business do just fine without you? If so, try four weeks. Keep going until you hit the “No way I can stay away that long!” wall. Now you know the approximate length of time that you can trust your business to keep running without you. If you fall ill or become disabled, and it lasts longer than the time you arrived at in the preceding exercise, what’s your fallback for income? Savings? Pension plans? Family? Beyond the obvious con- sequences of these options, are any of them truly adequate? And what if you’ve already drained them by signifi- cant investments in your business? There is an answer. Talk with us about disability income insurance. As the name suggests, this coverage is designed to provide you with some continuing income during the span of your disabili- ty. As with all types of insurance, there are many variations in amounts, length of time benefits will be paid, and what types of accidents or illness will trigger coverage. We’ll help you choose the right combination that will best serve your needs. Any computer hacker will tell you that the most sophisticated security systems ever developed can often be breached by rummaging through the company trash for a discarded password. Have you ever considered how much customer-private information is simply left lying around the office? Cleaning crews, other customers, repairmen and other employees often can simply walk by an absent employee’s desk and see confidential information scattered about or left on the computer screen. While millions of dollars are being spent on building software barriers to keep hack- ers from getting into your files, those same files are sitting open at your office for all to see. Are you overlooking the most obvious and massive security breach in your business — human error? Walk through your office after hours or while employees are at lunch and see for yourself how much information is left openly accessible. Sit in the middle of the office (or at the next booth or table at lunch) and see how much of your employees’ conversations (and possible confidential customer information) you can overhear. Next, decide what you can do to minimize this risk. Make sure that desktops are clear at night; add pass- word-protected screen savers to your computers (and change the passwords often); and remind employees to be sensitive about what they reveal in public conversations. Will Your Income Fall When You Do? W hen a local phone company location catches fire, gets hit by a tornado or is struck by light- ning, it’s common for area business- es and homes to lose phone serv- ice. Such incidents appear regularly in the news. Inconvenient? No doubt. But if your business depends on incoming phone service, particularly for prod- uct orders and customer service, how much could such an outage cost you in lost revenues and profits? The bad news is that such out- ages happen. The good news: Under certain circumstances, you can add coverage for these inci- dents to your insurance program. Generally, the coverage will apply only if the outage is due to a cause of loss (such as fire, light- ning or windstorm) covered by the policy. The coverage can be writ- ten to cover loss of cellular service (the towers that carry cellular sig- nals also have been damaged and destroyed by storms and light- ning), as well as landlines. Additional sources of disruptions to your business, such as loss of utilities or water supply, might also be available. Contact us for advice on whether these types of losses can be added to your current insur- ance package. In fact, why not call now while you still can? Phone Company Has Fire, You Get Burned Privacy Should Remain Private

COPYRIGHT ©2004. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is under- stood that the publishers are not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert advice is required, the services of a competent professional should be sought. I f you’ve ever started a company yourself, or worked for a compa- ny in its infant stages, you know how hard it can be to turn a profit those first few years. It’s not uncommon for new businesses to lose money. Even established busi- nesses hit rough spots. That’s why business income insurance can be such a help. Business income cover- age pays for continuing expenses and net loss of income when a business is unable to continue operations due to an insured loss. If your business is unprofitable at the time of the loss, your business income insurer will take this fact into consideration. In most cases, there will still be an insurance set- tlement — a settlement that could be the most important factor in keeping your business afloat and financing its recovery. Let’s say your business, Fred Berg’s Stump Removal, grossed $100,000 last year and has a net loss of $10,000, on $110,000 of total expenses. An eco-terrorist breaks into your warehouse and sabotages all of your equipment, shutting down your business for one year. Your insurer will then cal- culate the continuing expenses while the business is closed (with your input, of course). Assume that continuing expenses are $40,000. The payment from the insurer for the interruption period would be $30,000 (the continuing expenses of $40,000 minus the $10,000 projected net loss). Before you know it, you’re back out there yanking stumps out of the ground and making mulch with the best of them. Without business income insur- ance, such a loss might permanent- ly disable the company. But with coverage, you can resume opera- tions and march toward profits and progress. Some companies can’t withstand a significant shut- down. A daily newspaper, for example, is an expensive business to run. In this situation, the paper might need extra expense cover- age, which pays for costs beyond the normal operating expenses needed to get the business up and running as soon as possible. Business Income Insurance It’s a worst-case scenario: An out-of- control tanker truck slams into the side of your building. After the initial explo- sion, flames break out and creep closer to your office. The halls are filled with acrid smoke and the sprinkler system is blasting everything with streams of cold water. The fire department is en route, but you need to leave the building immediately. The question is, do you know how? Evacuation maps, although not required by the Occupational Safety and Health Administration (OSHA), are vital for employee and employer safety. In the panic and confusion of a disaster, you don’t want to guess which hallway to use; you want to be sure of where you’re going, and you want your employees to be sure as well. Evacuation maps are useless unless they contain up-to-date, accurate infor- mation. In addition, they should be placed somewhere highly visible in an area frequented by employees. And don’t forget about your clients. It’s always a good idea to post maps where visitors linger. Above the copier, by the coffee machine, conference rooms, parking garages — all of these are good locations for an evacuation map. Does everyone in your office speak English? If not, be sure to include evacuation maps in a language that your employees will understand. Also, be wary of a map that contains too much information: You don’t need the blueprints for the entire office structure, just the primary and second- ary routes of escape. Take a walk around and pretend that you’ve never been in your office. You’re frightened, confused. Where do you go? Imagine running through your office in a blind panic. Make sure that your employees have some idea of how to exit the office. Familiarize new employees with emergency exits and come up with an office “game plan” in case of an emergency. As an employer, you have a responsibility for the health and safety of your staff. Although evacuation maps are not mandatory, they show you’re concerned with your employees’ well-being. Evacuation Maps Are Vital for Employee Safety

Thank you for your referrals. If you’re pleased with us, spread the word! We’ll be happy to give the same great service to all of your friends and business associates. E lectrical power can pose a double threat to your business operations: They cause spoilage when going, burnout when coming back. If such outages affected your business significantly, are you sure that your current insurance program would cover losses from them? Standard property insurance forms have several exclusions and limitations that might leave you without coverage after a power loss. Fortunately, there are modifications and endorsements that address this risk. Should they be a part of your coverage pro- gram? Give us a call for a convenient time to do a complete review of your current coverages. Let’s make sure that when your power goes off, your coverage stays on. Beware of Blackouts