Archive | March 2015

Own a Home-Based Business? Take Charge Of Your Risk!

Are you the proud owner or founder of one of the estimated 59% of established businesses in the United States that operate from a home? Then, for your business you are the top dog, head cheese, or grand high poobah.

But just as you realize that there are similarities to all businesses, wherever located, you also know there are often concerns, considerations and risks unique to a home-based environment. And Tower Insurance Agency wants to remind you that designing proper protection encompassing both those common and unique risks requires ongoing communication and review of your current insurance and risk management programs.

Yet studies show that of the 11 million-plus home-based businesses, nearly 60% do not have insurance specifically recognizing and providing coverage for these unique risks. When asked about the reasons for this lack of additional insurance, business owners responded:

  • They thought they were already properly covered by their personal insurance: 40%.
  • They thought their business was too small to insure: 30%.
  • They could give no specific reason: 20%.

The first assumption is demonstrably false. Standard homeowners policies are designed for personal exposures, not business. While there may be small areas or limits of coverage available for certain types of home-based businesses, the vast majority will find coverage severely limited or specifically excluded for business losses related to such common risks as theft, vehicle usage, employee injuries, or life/health/disability. The largest potential gap in proper coverage arises from the lack of liability protection for claims arising out of business activities, whether the claim occurs in the home or elsewhere.

The second assumption above is also wrong, and the third response, at a minimum, shows a dangerous lack of knowledge.

Starting a home-based business may be the first step on your road to successful entrepreneurship. Whether your business ultimately remains in your home or grows into the need for outside facilities or a relocation, Tower Insurance stands ready to be your ongoing valued partner.


Severance Agreements And Older Workers – A Litigation Pitfall For Employers

legal liabilityThe EEOC filed a lawsuit against an employer, on behalf of a terminated employee, and alleged language in the severance agreement, referring nondisparagement and a covenant not to sue, interferes with the employee’s rights under Title VII of the Civil Rights Act of 1964 right to file a charge or cooperate with an investigation.

The court dismissed the EEOC’s, stating the employer was able to show it informed the employee on two occasions that the cited provision would not be used to prevent her from exercising her rights under the Age Discrimination in Employment Act (ADEA). Daniel R. Long, Michael S. Arnold “EEOC’s Attempt to Limit Reach of Severance Agreements Hits Roadblock…Again,” (Dec. 16, 2014).

Commentary and Checklist

The ADEA prohibits employers from discriminating against individuals age 40 and older on the basis of age. It covers all aspects of employment including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and any other condition or privilege of employment.

The EEOC received more than 21,000 charges of age discrimination in its fiscal year 2013.

Terminated employees can waive their ADEA rights as part of a severance agreement, as long as the agreement satisfies the provisions of the Older Workers Benefit Protection Act (OWBPA) to make sure the employee waived the rights knowingly and voluntarily.

For compliance with the OWBPA and other reasons, employers should always have legal counsel review or draft a severance agreement.

Here are a few aspects of the OWBPA that an ADEA rights waiver should contain:

  •        The waiver must be in writing and be understandable.
  •        The waiver must specifically refer to ADEA rights or claims.
  •        The waiver cannot waive rights or claims that may arise out of future events.
  •        The waiver must be given in exchange for valuable consideration; that is, something to which the individual is not already entitled.
  •        It should advise the individual in writing to consult an attorney before signing the waiver.
  •        It should provide the individual up to 21 days to consider the agreement, and up to seven days to revoke the waiver after signing it.

How A DUI Affects Your Insurance Rates

drunk drivingIf you’ve been convicted of driving under the influence (DUI) of alcohol or drugs, it will likely drive your car insurance rates through the roof.

According to the National Highway Traffic Safety Administration, in 2010 there was an alcohol-related traffic fatality in the United States every 51 minutes. Aside from the risk of killing yourself and others, a drunk driving conviction carries with it serious penalties from your car insurance company.

Auto insurance companies may check your motor vehicle record only once every three years or when you’re applying for a new policy. It’s possible that accidents, tickets and DUIs may never make their way to your official motor vehicle record. However, if your insurer discovers your DUI and classifies you as a “high-risk driver,” shopping around at renewal time is the best strategy, as rates will vary greatly among auto insurers. On the other hand, a rate hike may be the least of your problems; your policy could be cancelled or nonrenewed, especially if you are currently in a preferred rate class. Then you’ll be forced to look for new car insurance with the double-whammy of a DUI and a cancellation on your record.

Laws regarding DUIs and car insurance coverage vary by state. Most states require DUI offenders to get a form called an SR-22 from their auto insurers, so you can’t hide. This form proves to the DMV that you carry liability insurance and removes your license suspension. An SR-22 also requires your insurance company to notify your state’s department of motor vehicles (DMV) if it cancels your auto insurance for any reason. You’ll likely have to file proof of insurance for three — sometimes five — years with your state’s DMV.

Some car insurance companies don’t even offer SR-22 policies, so your policy could be nonrenewed or cancelled because your company can no longer provide what you need.

Car insurance companies can miss DUI convictions

It’s possible that your insurance company will never find out about your DUI conviction if your state does not require you to seek an SR-22. According to the Insurance Research Council, as many as one in five convictions for traffic violations never end up on motor vehicle records due to lack of shared information between courts and motor vehicle departments, or because a conviction has been erased through alternative means, such as driving school. If you get your DUI charge reduced in a plea bargain, or have a limited license suspension, such as 30 days, it’s also very unlikely your insurer will find out about your conviction.

If your insurance company misses the conviction at the time it happens, it may still have a few years to raise rates if the DUI is discovered later. With some insurance companies, you will not face nonrenewal or cancellation because of a DUI, but you may face a rate increase.

When you have a DUI conviction, it doesn’t end with car insurance. Your conviction will follow you if you apply for life insurance and could affect your premiums there, too.

Spring Break – Don’t Forget Your Travel Insurance!

travel-insuranceTravel- whether you’re hitting the road, hopping a plane or taking a cruise, you’re spending some time away from home and usually are spending some money to do it. But what happens if your trip is interrupted by inclement weather, or an unexpected illness? Travel insurance and specialty medical coverage can give you peace of mind from the moment you book the flights or start the car.

What coverage is available?

There are two broad types of travel-related coverage for those leaving the United States:

  • Travel insurance covers the loss of the prepaid travel costs of a trip (like flights, hotels, etc.)should it be canceled, interrupted, or postponed. It also can reimburse unexpected expenses incurred due to a sudden change in travel plans due to illness or other causes.
  • Specialty medical coverage protects against personal insurance risks when someone is outside the United States.

Trip insurance providers sometimes require a physician’s verification if a trip must be canceled before it occurs for illness. It advises buyers to check whether the travel coverage is “cancel for any reason protection,” or more limited coverage.

Trip interruption insurance is another variation. It can provide reimbursement for extra food and lodging costs if a traveler becomes ill during the course of a trip. Some plans cover medical costs. Trip delay insurance covers expenses a traveler incurs in resuming a planned trip or returning home after being quarantined in another country. Often these various coverages are bundled and sold together in a package.

Travelling abroad?

Short-term medical insurance may be appropriate for the millions of U.S. residents who travel outside the U.S. every year. Those who travel outside of America may be going beyond the boundaries of their medical insurance without knowing it, according to Clements International, a provider of international insurance policies.

Travelers may wish to consider short-term medical insurance if they’re traveling outside of the United States for an extended vacation or business trip. To determine whether it’s necessary, it’s advisable to check if a domestic health insurance policy covers out-of-country travel. If not, short-term medical insurance provides coverage for illnesses or medical evacuation that occurs while traveling outside of the United States.

International travelers face the same insurance risks (and sometimes additional risks) while outside the country that they do while stateside. Life insurance issued in the U.S. may not be available on the same basis while a person is traveling for an extended period as when not traveling. It’s prudent to check on the validity of life insurance coverage as part of the travel-planning process.

Form I-9s For Online and Remote Workers – A Growing Risk For Employers Who Hire Sight Unseen

By Leslie Zieren, Esq.

Employers must verify the employment authorization and identity of new employees to determine employment eligibility. This requires completion of a Form I-9 for every new employee.

The certification reads as follows:

I attest, under penalty of perjury, that (1) I have examined the document(s) presented by the above-named employee, (2) the above-listed documents(s) appear to be genuine and to relate to the employee named, and (3) to the best of my knowledge the employee is authorized to work in the United States.

By signing and dating the form, the employer or an “authorized representative” attests to physically examining the documents provided. Note that this is not a function than can be performed online.

Remote hires present a challenge. If new workers are hired at worksites far from the employer’s headquarters, who is going to serve as the “authorized representative” who can complete the Form I-9 and attest on behalf of the employer?

An employer may designate someone else to be an authorized representative, like a personnel officer, foreman, agent, or a third party like a notary public to complete the Form I-9. However, the employer remains liable for any violations in connection with the process.

To help curb exposure, make certain that the person you authorize is trained on the I-9 process, requirements, and the liability risk. It is best not to designate the new employee’s spouse, for example, to avoid any potential conflict of interest. Choose someone who would not personally benefit from the employment of a worker.

It is a best practice to designate the authorized representative in writing, and have that person sign the writing as well, to indicate his or her agreement to perform the necessary function.

Related Links

Form I-9 (PDF)