COMMERCIAL AUTO INSURANCE 101

Nearly six million traffic accidents occur in the U.S. every year - more than 16,000 a day (or one every 10 seconds).

If your company owns, operates, or uses motor vehicles - or if you have employees who use their cars for business purposes - you need Commercial Auto Insurance to provide financial protection against losses from mishaps that occur behind the wheel.

This valuable policy provides these coverages:

• Bodily Injury Liability pays the cost of bodily injury to others from accidents for which you are responsible. If you're sued, it also pays your defense and court costs.
• Property Damage Liability picks up the tab for property damage to others for which you are responsible, as well as defense and court expenses.
• Personal Injury/Medical Payments usually covers medical and funeral expenses for bodily injury from an accident that involves an insured vehicle.
• Collision pays for a covered vehicle that is damaged by a collision with another vehicle or object.
• Comprehensive Coverage pays for a covered auto that is stolen or that is damaged by causes other than collision or reckless driving.
• Uninsured/Underinsured Motorists covers injuries and, in some cases, property damage, when you're involved in an accident with another person who either doesn't have Auto Insurance or carry enough coverage.

Before you purchase or renew your Commercial Auto Insurance ask yourself these questions: 1) how much Liability Coverage you should buy, and 2) how large of a deductible should you choose?

We'd be happy to help you choose the most cost effective policy for your needs. Just give us a call.

DON'T LET YOUR PRODUCTS DAMAGE YOUR BOTTOM LINE

Product Liability Insurance helps protect your company from damages for losses related to manufacturing or selling products or other goods.

These claims can, and do, put businesses out of business - just ask the officers of any asbestos manufacturer.

Companies are vulnerable to three types of products claims

1. Manufacturing or production flaws that create an unsafe defect in the product. For an example, just recall the recent claims against Chinese manufacturers for using dangerous chemicals in their products.
2. Design defects that make the product inherently unsafe. (The series of lawsuits against Toyota vehicles for defective acceleration controls during the past two years comes to mind.)
3. Inadequate warnings or instructions, such as failing to label a product properly or advise consumers about potential risks. A famous example is the McDonald's "hot coffee case."

Damages can include medical costs, compensatory damages, economic damages, and (in some instances) attorney fees and costs, as well as any punitive damages.

Some sellers and retailers choose not to buy Product Liability Insurance because they don't actually "manufacture" anything. However, most states follow the "stream of commerce" model of liability, meaning that if your company sells a product, you can be held liable for damages to the end user.

"Business Owners" and Commercial General Liability policies usually include some type of Product Liability Coverage (Sometimes known as Product/Completed Operations Insurance).

Premiums are based upon the type of product and sales volume. If you try to reduce premiums by underreporting sales or insuring only a percentage of your sales, you'll probably face a hefty "underinsurance" penalty. Make sure to identify your products properly, too. For example; if you supply stepstools, you don't want them categorized as ladders, which have a higher premium because of their greater risk potential.

For more information, feel free to get in touch with our Business Insurance professionals.

SAFEGUARD YOUR KEY PEOPLE WITH DIRECTORS & OFFICERS INSURANCE

In today's increasingly complex and litigious business environment, your corporate officers and board of directors - the brains of the company - need protection against personal financial liability arising from their corporate activities.

These people are highly vulnerable to lawsuits by investors, employees, vendors, competitors, customers, regulators and others, alleging misconduct for a wide variety of activities, such as:

• Providing inaccurate or unlawful advice.
• Fraud and malfeasance.
• Misrepresentation of company assets.
• Failure to comply with workplace laws.
• Poor hiring decisions. (A Towers Perrin survey found that 40% of all reported D&O claims involved flawed employment practices.)

Directors & Officers Liability (D&O) Insurance will pick up the tab for legal fees, settlements, and other expenses from such litigation. This gives your officers and directors financial peace of mind in carrying out their corporate activities, and provides a valuable incentive for attracting, and keeping quality people who can help grow your business.

There's a widespread need for this coverage. One in six company executives (17%) surveyed by Inc. Magazine believe that their business will experience a D&O-related loss within the next year.

These policies usually offer two types of coverage known as "sides." Side A protects directors and officers from personal financial liability if the company is unable to indemnify them. (For example, during a bankruptcy or dissolution.) Side B coverage reimburses the company if it indemnifies directors and officers. (For example, when shareholders file suit against them.) A third coverage - sometimes known as Side C - comes into play when both the company and individual officers and directors face lawsuits.

To learn more about how D&O Insurance can help minimize the financial risks of litigation for your company and your top people, feel free to get in touch with us at any time.

CYBERCRIME: A GROWING THREAT

The more heavily your business relies on electronic technology, the greater your vulnerability to cybercriminals.

Criminal activity conducted through the Internet impacts businesses of all sizes. One study found that companies with 100 or fewer employees accounted for 72% of data breaches worldwide.

Today's cybercrimes put your grandmothers' spam email list to shame. According to a nationwide study by Ponemon Institute, the median annual cost of cybercrime for a large company in 2011 came to $5.9 million.

Cybercrime covers a variety of activities, from malicious codes and hacks in which private client or company information is made public or stolen, to disruption of normal operations. Perpetrators include rogue employees, "hacktivists" seeking to make a political statement, or third parties seeking financial gain.

Businesses, such as coffee shops, that allow customers on their premises to use Wi-Fi face unique risks. In one case, a Hollywood producer sued the owner of a restaurant offering Wi-Fi access after a customer used the network to download a film for bootlegging.

To help protect your business against potential losses from cybercrime, here are some recommendations:

1. Review your specific exposures. For example, if you allow people outside the company to use your WiFi, this can increase your exposure.
2. Focus on the human element in data security by offering employees effective training and specific guidelines.
3. Re-evaluate your guidelines frequently.
4. Evaluate the potential risks of adopting new technology.

Last, but not least, make sure that you carry adequate Cyber Liability Insurance.

Our agency would be happy to tailor cost-effective coverage to your needs, and help you develop and implement a comprehensive program for managing your exposure to cybercrime.