Tag Archives: Insurance

Is Workplace Drug Testing Really the Best Thing for Your Business?

Is Workplace Drug Testing Really the Best Thing for Your Business?

Is Workplace Drug Testing Really the Best Thing for Your Business?

Personal accountability is especially important in a small business to meet deadlines, satisfy clients, control budgets, and produce positive results. With fewer employees to run day-to-day operations, small-business owners rely even more on individual contributions than do larger corporations.

A small-business owner has two choices to ensure his company employs personally accountable and law-abiding individuals: (1) a system based on trust, or (2) a system based on test results.

Surprisingly, however, a system based on trust yields higher productivity and employee morale than one based on testing. Take, for example, drug testing in the workplace.

More than half of employers in the United States (57 percent) still conduct drug tests on job candidates, and many employers (36 percent) continue to conduct periodic drug tests on current employees, according to 2011 research by the Society for Human Resource Management1.

Because drug testing costs as much as $50 per candidate, small-business owners (99 or fewer employees) are less likely to conduct drug tests (39 percent) compared with owners of businesses employing 2,500 or more employees (71 percent), according to the same research.

However, in a study of 63 high-tech firms in the computer-equipment and data-processing industry, drug testing was found to reduce rather than enhance productivity, according to a report by the ACLU2. Firms with pre-employment drug testing scored 16 percent lower on productivity measures than firms with no drug testing in the workplace at all, according to the ACLU report.

Here are three more reasons to reconsider drug testing in the workplace:

  • Drug testing is expensive. According to an ACLU study, the federal government spent $11.7 million to find 153 drug users among almost 29,000 employees tested in 1990 – a cost of $77,000 per positive test2.
  • Drug testing is not completely accurate, as it is not a pure science. There is a chance that an employee will receive a false positive. This unfairly destroys the rapport between an employee – falsely accused of using drugs – and an employer – forever biased by the inaccurate results.
  • Drug testing does not catch drug users. Drug testing, especially when conducted exclusively during the hiring stages, doesn’t guarantee that you’ll identify a drug user.

“The vast majority [of workers who use drugs] undergo examinations only when they apply for a job, and they can pass by abstaining from drugs for a reasonable period before the test – or by using a variety of masking agents or devices that make their urine seem clean,” Reynolds Holding wrote for Time3.

If you want to improve productivity and decrease absenteeism in your workplace, you have other methods available for encouraging personal accountability at your company, including:

  • Encourage participation in substance abuse programs. Medical insurance often covers counseling and substance abuse programs. If you suspect that an employee has a problem with drugs or alcohol, promote a substance abuse program at the office. Small businesses are more like families. As such, raising awareness for insurance-covered counseling kindly allows employees to address issues confidentially and quietly, and it shows that your company supports healthy recovery and doesn’t just issue reprimands.
  • Conduct comprehensive reference checks. Instead of testing candidates for drugs, try conducting more comprehensive reference checks on your employees. Ask for three professional and three personal references.
  • Prepare a list of questions in advance that ask previous employers and personal references to honestly evaluate a candidate’s sense of personal accountability. (Of course, check with a lawyer ahead of time to ensure that you’re not violating any workplace discrimination laws.) Reference checks done correctly will identify more areas for potential problems or conflict than will a drug test.
  • Hire outside consultants to improve workplace efficiency. If there is a decrease in productivity at your business, it may have nothing to do with your employees at all. Hire an outside consultant to analyze your operations and bookkeeping.

Implementing more efficient workplace systems may be just what your business needs – as opposed to promoting a culture of mistrust – to increase morale, efficiency, and company profits.

For more information, visit:

1. Society for Human Resource Management: “SHRM Poll: Drug Testing Efficacy

2. American Civil Liberties Union: “Drug Testing: A Bad Investment

3. Time: “Whatever Happened to Drug Testing?”

13 Types of Insurance a Small-Business Owner Should Have

13 Types of Insurance

1. General Liability Insurance: Every business, even if home-based, needs to have liability insurance. The policy provides both defense and damages if you, your employees, or your products or services cause or are alleged to have caused bodily injury or property damage to a third party.

2. Property Insurance: If you own your building or have business property, such as office equipment, computers, inventory, or tools, you should consider purchasing a policy that would protect you if you had a fire, vandalism, theft, smoke damage, etc. You may also want to consider business interruption/loss of earning insurance as part of the policy to protect your earnings if the business is unable to operate.

3. Business Owner’s Policy (BOP): A business owner’s policy package contains all required coverage a business owner would need. Often, a BOP includes business interruption insurance, property insurance, vehicle coverage, liability insurance, and crime insurance. Based on your company’s specific needs, you can alter what is included in a BOP. Typically, a business owner will save money by choosing a BOP because the bundle of services often costs less than the total cost of all the individual coverages.

4. Commercial Auto Insurance: Commercial auto insurance protects a company’s vehicles. You can protect vehicles that transport employees, products, or equipment. With commercial auto insurance, you can insure your work cars, SUVs, vans, and trucks from damage and collisions. If you do not have company vehicles but your employees drive their own cars on company business, you should have non-owned auto liability to protect the company in case the employees don’t have insurance or have inadequate coverage. Many times, the non-owned vehicles can be added to the BOP policy.

5. Workers’ Compensation: Workers’ compensation provides wage replacement and medical benefits to those who are injured while working. In exchange for these benefits, an employee gives up the right to sue his employer for the incident. As a business owner, it is very important to have workers’ compensation insurance, because it protects you and your company from legal complications. State laws will vary, but all require you to have workers’ compensation if you have W-2 employees. Penalties for noncompliance can be very stiff.

6. Professional Liability Insurance: This type is also known as Errors and Omissions Insurance. The policy provides defense and damages for failure to render, or improperly rendering, professional services. Your general liability policy does not provide this protection, so it is important to understand the difference. Professional liability insurance is applicable for lawyers, accountants, consultants, notaries, real estate agents, insurance agents, hair-salon operators, and technology providers to name a few.

7. Directors and Officers Insurance: This type of insurance protects the directors and officers of a company against their actions that affect the profitability or operations of the company. If a director or officer of your company, as a direct result of her actions on the job, finds herself in a legal situation, this type of insurance can cover costs or damages lost as a result of a lawsuit.

8. Data Breach: If a business owner stores sensitive or nonpublic information about employees or clients on his business computers, servers, or in paper files, he is responsible for protecting that information. If a breach occurs either electronically or from a paper file, a Data Breach policy will provide protection against the loss.

9. Homeowner’s Insurance: Homeowner’s insurance is one of the most important kinds of insurance you need. This type of insurance can protect against damage to the home and against damage to items inside the home. Additionally, this type of insurance may protect you from accidents that happen at home or may have occurred due to actions of your own.

10. Renter’s Insurance: Renter’s insurance is a subset of homeowner’s insurance that applies only to those whose who rent their homes. The coverage protects against damage to the physical property, contents of the property, and personal injury within the home.

11. Life Insurance: Life insurance provides for an individual’s loved ones in the event of the individual’s death. If you have life insurance, the insurer pays a certain amount of money to a beneficiary upon your death. You pay a premium in exchange for the payment of benefits to the beneficiary. This type of insurance is very important, because it allows for peace of mind. Having life insurance allows you to know that your loved ones will not be burdened financially upon your death.

12. Personal Automobile Insurance: Another very important type of insurance is auto insurance. Auto insurance covers all road vehicles (trucks, cars, motorcycles, etc.). Auto insurance has a dual function, protecting against both physical damage and bodily injury resulting from a crash, and also any liability that might arise from the collision.

13. Personal Umbrella Insurance: You may want some additional coverage, on top of insurance policies you already have. This is where personal umbrella insurance comes into play. This type of insurance is an extension to an already existing insurance policy and covers beyond the regular policy. This insurance can cover different kinds of claims, including homeowner’s or auto insurance. Generally, it is sold in increments of $1 million and is used only when liability on other policies has been exhausted.

This article originally appeared on Forbes.com.

Benefits for 2013: It’s Decision Time for Owners and CEOs

Benefits for 2011

Benefits are differentiators for small businesses.

Mike McKean, CEO of new-product development and founder of The Knowland Group, wants his company to be an employer of choice in all four of its U.S. locations. For his 60 employees, he offers dependent-care cost reimbursement, tuition reimbursement, and 401(k) plans as well as health, vision, dental, and wellness benefits.

That’s a significant array of benefits, but McKean has two guidelines for the choices he offers. One, he wants to ensure that The Knowland Group’s package is comparable to, and “perhaps even better” than, what similar businesses in the area offer. Two, some choices are in the mix because they fit with the company’s core values. A subsidized gym membership, annual fitness challenge with prizes, and regular visits to HQ by a personal trainer—as well as those child-care and dependent-care subsidies—fall in that category.

McKean’s company, which provides business-development services to the hospitality industry, is growing quickly, and McKean believes that the benefits package has helped.

“If someone is comfortable that their children are being well cared for, they are going to be better employees. If someone is going to the gym, they’re going to be more alert.”

McKean had about 15 percent of employees using the gym at the peak, but he adjusted his offer of health club memberships since the recession.

“Now we require that our employees prove that they go to the gym for us to reimburse them completely,” he said. Employees who go to the gym five to nine times per month receive a 50 percent discount on their memberships. Those who go 10 times or more per month have their memberships paid in full.

McKean realizes business benefits from providing employee benefits. The Small Business Authority asked him to calculate his benefits costs using the standard yardstick, percentage of payroll.

“The benefits are average for a company our size,” he said.

Result: The benefits run 16.7 percent of payroll. Health insurance alone (dental and vision are excluded in this definition) takes a 4 percent bite. That’s actually much better than average spending.

What Percent of Payroll Should You Spend?

For this, we need to look at health care alone, because other benefits are not easily comparable. The Bureau of Labor Statistics shows health insurance costing 6 percent of total compensation for companies with one to 49 workers, 7.2 percent of total compensation for companies with 50 to 99 workers, and 8.5 percent of total compensation for companies with 100 or more workers.

Mercer, the benefits consulting company, held webinars on health reform and in July conducted a survey of employers who registered for the webinars. The survey, “Health Care Reform: Getting Ready for 2011,” was published in August. The survey gauged employers’ thoughts about the impacts of the 2011 provisions of the Patient Protection and Affordable Care Act.

In the survey, employers with fewer than 500 employees responded that they expected their “change in total health benefit cost before making changes to plan design [except as required by PPACA]” to be nearly 12 percent. Those employers also expected their “increase in total health benefit cost due only to 2011 PPACA provisions” to be 3 percent.

Employers responded that by making changes in their coverage, they felt they could keep the increase down to 6 percent. The survey included 1,092 employers of all sizes, 299 of whom had fewer than 500 employees.

One way that employers may hold their costs to just 6 percent above 2010 levels is by increasing the share that workers pay for dependent coverage as opposed to employee-only coverage—56 percent of the respondents said that they would raise the contributions.

According to Beth Umland, Mercer’s research director for health and benefits, 44 percent of the respondents will be looking to reduce health-care costs by offering wellness and health-management options.

Inverse Benefits
Because every dollar a small company spends on benefits reduces the pot that could be used to beef up salaries, companies that employ two or 10 or 60 workers may think hard about the array of benefits they will offer.

“The cost is a huge deal,” said Stephanie Cathcart, a spokesperson for the National Federation of Independent Business.

“When a small business makes the decision to offer [a particular package or benefit], they’ve run the numbers and realize they can do it this year and in the future. They don’t want to drop it once they offer it.”

Yet sometimes, they may have to scale back or shoulder less than the full cost.

Business owner Lori Rosen runs two small businesses: an ecommerce site called Blacksocks.com, which has three employees, and a public relations firm, The Rosen Group, which has 20 employees. She started the latter company in 1984 with full health care that was 100 percent employer-paid.

“Unfortunately, it’s a bit of an inverse benefits model,” she said.

Costs were a lot less then, and when young people joined the company, “We were not able to offer huge salaries, but with the health care, it brought it to the level playing field of market rates.”

Over the years, she had to restructure the plan to include an employee contribution to the health care. Employees now pick up 35 percent, with the company contributing 65 percent.

“We also have higher deductibles to keep the cost from going too high,” she said.

Rosen has done what many other businesses, large and small, have done as health-care costs have steadily climbed: She shifted a bit more of the cost year-by-year to employees. But a number of other benefits have been added to ease the pain. Discounts on mass transit, telephone plans, and discretionary purchases like movie tickets are part of her two companies’ benefits packages.

Three years ago, she started closing up for a week between Christmas and New Year’s.

“It’s a free week’s vacation,” Rosen said, though employees must check email and phone messages during that time. Plus, there’s a profit-sharing plan to which Rosen makes a contribution that varies annually—it could be $50,000 or $70,000 or $20,000.

She has not figured out the percentage of payroll that goes toward benefits. It’s simply a cost of doing business, and the choices she offers are ways to differentiate her company on the playing field.

Another benefit that Rosen offers is a group discount at a health club in New York City, which a few employees take advantage of. Initially, Rosen paid $400 per year toward employees’ memberships at various clubs. She scaled that back during the recession.

A Small Advantage

According to MetLife’s “8th Annual Study of Employee Benefits Trends,” when it comes to benefits, business owners rated controlling costs as their biggest concern, followed by a desire to have a good package that will help retain employees, then productivity. Small businesses are in a good position to use benefits programs to engage their workers, thereby improving productivity and job satisfaction. This is because small-business owners have more personal relationships with employees and can more easily tailor benefits to suit them.

“Ironically, the larger companies are not offering that many better benefits,” Rosen said. “Their policies are really no different than ours in terms of vacation. Maybe they have sick days and all that, but the truth is when you have a small company, you can be more flexible. You can allow things if there are extenuating circumstances.”

Five Disasters Your Business Owner’s Policy Doesn’t Cover

Are you covered?

A lawsuit can shut you down. As a small-business owner, your best protection is insurance. Do you know if you’re insured against hacked credit card numbers, sexual harassment allegations, or a flood—or are you skating along with your fingers crossed?

Some common disasters require special insurance. The general liability and property insurance coverage in your Business Owner’s Policy (BOP) is reasonably comprehensive. However, other insurance policies to augment it might cost relatively little and give you peace of mind. One-size-fits-all insurance such as what you get with a BOP may not be sufficient if you find yourself in one of these five situations:

Insurance disaster no. 1—You get sued over allegations of sexual harassment, wrongful termination, or discrimination. A cap-making business in Texas agreed to pay a $21,500 fine to settle a sexual harassment lawsuit in 2010. Defending the lawsuit may have potentially increased that cost. A BOP can include coverage for allegations of sexual harassment and the related issues of wrongful termination and discrimination. But depending on how many employees you have and what you feel your potential risk is, you may want to add Employment Practices Liability (EPL) insurance. It’s a coverage that can be included in unlimited amounts and at reasonable rates.

Insurance disaster no. 2—An accident closes you down completely. If an SUV were to plow through the front of your store, breaking glass and fixtures, and you were not able to reopen for many days, you would incur a loss of revenue over and above the damages sustained. For this, the answer is Business Interruption insurance. It compensates your business for lost profits (based on your financial records) and for overhead, like electricity. Business Interruption insurance is usually built into a basic business policy, but look at it carefully in light of your operation. You may want to increase the limits. Some policies pay out a designated amount and others pay the actual loss sustained.

Insurance disaster no. 3—Your business premises are flooded. If you own your property, consider whether you need flood insurance. It is not part of a basic BOP and being without it could be devastating to your business. Small-business owners have to consider the cost of physical property damage and loss of business, and insure for it. All major carriers sell flood insurance, with the National Flood Insurance Program providing coverage.

Insurance disaster no. 4—You are sued as a professional for giving bad advice if you’re a consultant, for a bookkeeping error if you’re a financial advisor, or for other sorts of professional negligence. Insurance for purported breaches that result in losses by clients is called Professional Liability insurance, or Errors and Omissions insurance. Professional Liability policies come in many forms, varying by the type of profession.

Insurance disaster no. 5—Your customer data is hacked. How many financial transactions do you handle online each week? Think about that exposure. Also think about the customer data you store for loyalty programs or customer relationship management (CRM) programs. Today, data breaches are of great concern to many small-business owners because the potential for financial damage is huge. Any business owner who stores personal information on customers is responsible for maintaining that information securely. If there is a breach, whether internal or external, the company that was breached is liable. Even if suspicion of a breach exists though no breach has occurred, a major credit card issuer may conduct a forensic audit. You could be assessed the cost of the audit.

Data-breach policies are tailored to various industries. For example, online retailers can get one that the PCI Security Standards Council endorses. The Small Business Authority, in conjunction with its merchant-processing services, offers a reasonably priced, PCI-compliant data-breach-protection policy as an add-on. The add-on policy provides coverage in case your merchant account, your terminal, or your software is breached. The policy will also cover you if you are suspected of a breach. The Small Business Authority, which has relationships with more than 40 carriers, sells BOPs as well as a range of other insurance products.

Most people consider insurance to be a necessary evil, but there’s another way to consider it. An adequate amount of insurance is what allows you to satisfy contractual requirements and go after bigger pieces of business. You may have to show that you carry a certain type of insurance in order to move into a particular retail location or to sign on with a big distributor. Then it not only becomes part of the cost of doing business, but also a way to help you increase revenue.

What Is Employment Practices Liability Insurance?

What is EPLI insurance?

What is EPLI insurance?

If you find that your one-man operation is about to become a fully staffed organization, you may need to protect your business with employment practices liability insurance (EPLI).

Companies can be sued for a myriad of reason these days, including lawsuits from past, current, and even potential employees. EPLI can minimize your risk in these instances.

EPLI is a relatively new liability insurance line, but serves a critical purpose. EPLI’s coverage insures you for the following:

• Discrimination based on age, sex, race, disability, etc.
• Wrongful termination
• Sexual harassment
• Breach of employment contract
• Negligent evaluation
• Failure to employ or promote
• Wrongful discipline
• Deprivation of career opportunity
• Wrongful infliction of emotional distress
• Mismanagement of employee benefit plan

With employment-related lawsuits on the rise, some estimates show that up to three out of five business will be sued by employees. As such, business owners need to ensure that they are taking all the appropriate steps to protect their companies.

How to Sustain Your Business While Taking Leave

Apple Inc. CEO Steve Jobs announced Jan. 17 that he is taking a medical leave of absence. This will be Jobs’ third leave of absence in six years, and it comes at a time when Apple’s stock prices command more than $300 per share.

We send him thoughts of health and well-being.

As a small-business owner, you may not have the budget or staff of a company like Apple. You may not only be the CEO, but also the COO, general manager, and customer service representative.

If you needed to take a leave of absence from your business, what would you do to sustain your business?

You can glean ideas from Steve Jobs’ announcement as well as from Ready Business, an emergency preparedness collaboration between the Advertising Council and the Department of Homeland Security.

Here are some suggestions.

Make a plan. Ready Business has a page dedicated to “continuity of operations planning” in case of emergency. You can apply several of the tips to create a directive for business operations in your absence.

Consider this tip: “Carefully assess how your company functions, both internally and externally, to determine which staff, materials, procedures, and equipment are absolutely necessary to keep the business operating.”

What are the most important functions of your business? How can you plan to keep them going? Who will keep them going?

Determine your level of involvement. In his announcement, Jobs wrote, “I will continue as CEO and be involved in major strategic decisions for the company.”

That’s good advice for you. What decisions do you want to remain involved in while you are on leave? Will you remain the Big Ideas Czar? Do you want to be notified of daily details, or do you only want to be bothered if your employees stage a mutiny?

Delegate the rest. Jobs also wrote, “I have asked Tim Cook to be responsible for all of Apple’s day-to-day operations. I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.”

Who is your Tim Cook? Do you have an interim buck-stopper? If you don’t, select one. If you’re a one-person service provider, you don’t have to hang up a “Will Return” clock. Select a trusted colleague to funnel your clients to until you return.

Respect your own privacy. Jobs closed his letter with, “I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.”

You may also love your company—so much so that you have to be surgically detached from your desk. If you’re a micromanager, you may be chewing not only your own but other people’s fingernails. This would be a good time for you to learn meditation and recite the serenity prayer.

Remember what Gen. Patton said: “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.”

You are being called to take care of yourself for the time being. The future health of your company depends on your health today. Relax. Your business probably won’t burn down while you’re away.

But in case it does…

Get the right insurance. According to the Ready Business “Review Insurance Coverage” page, “Inadequate insurance coverage can lead to major financial loss if your business is damaged, destroyed, or simply interrupted for a period of time. Insurance policies vary; check with your agent or provider.”

Make sure you know what you’re covered for—fires? Floods? Tornadoes? Employees falling in manholes on company time?

In addition, Ready Business recommends that you figure out where your income will flow from in case of an emergency.

Risky Business

What You Need to Know About Minimizing Your Business Risk

As we all know, there’s always going to be a certain level of risk involved when making an investment. The key for most of us is to mitigate that risk. If we drive, we insure our cars. If we buy homes, we purchase homeowners insurance.

Even with the more mundane investments we make—ones that don’t normally involve insurance—we still do what we can to minimize the risks. If we plan vacations, we check out hotel reviews online. If we hire contractors to put in new flooring, we check references or go with friends’ recommendations.

When it comes to investing our time, energy, and money into small businesses, the simple truth is that risk exists in just about every critical area of operations, from the safety of employees, to the investment in equipment, to the buildings in which businesses are located. As such, mitigating those risks through appropriate insurance coverage and making smarter business decisions are key to both the survival and success of businesses.

Core Coverage to Reduce Your Financial Risk

Although the idea of minimizing your financial risk through insurance coverage is pretty straightforward, understanding what coverage is right for your specific business can be more complicated. It’s important that you not only consult with a licensed insurance agent when determining what coverage is right for you, but also with a professional who understands the broader concerns of your business and its long-term goals. Don’t forget that licensed professionals are available at The Small Business Authority, and we never charge for consultations. You can call us at 855-2thesba.

Core Insurance Coverage Types

General Liability—designed to protect your business if an employee or a product or service from your business causes injury to a nonemployee or the nonemployee’s property. This coverage includes legal fees resulting from claims. Most businesses require their suppliers and vendors to possess this coverage.

Property Insurance—designed to protect a business property from fire, theft, wind damage, and many other causes of loss. Coverage can also be added for loss of profits, as well as additional expenses associated with setting up a temporary operation because of the loss.

Workers’ Compensation—provides medical payments and wage replacement for a worker injured on the job. This coverage is mandated and tracked by states. Fines await business owners who do not obtain this coverage.

Commercial Automobile Insurance—provides coverage for vehicles titled in the name of the business or for employees driving their own vehicles while working.

Other Common Business Coverage

Cargo Insurance—provides protection for goods/material while in transit.

Umbrella Excess—provides additional limits of coverage above that of liability, automobile, and workers’ compensation.

Directors and Officers—coverage for suits against directors and officers for management decisions that hurt the value of the business.

Employment Practices Liability—provides protection for suits by employees for improper termination, discrimination, harassment, etc.

Life Insurance—provides funds if a key employee were to die and leave a void in the business. Commercial lenders usually require this coverage on the borrower in order to close loans.

Group Health Insurance—provides medical, dental, life, and disability insurance for employees and their families. A business usually needs to have a minimum of two employees to qualify as a group.

Professional Liability—provides protection if a business is sued for failure to perform its responsibilities properly. This coverage is especially appropriate for professionals such as doctors, lawyers, real-estate agents, and consultants, to name a few.

Data Breach Coverage—also referred to as “Cyber Liability,” this insurance provides coverage in case of unauthorized access to nonpublic data. A covered breach can occur on a website, computer system, or from a paper file. Most breaches occur from acts by employees, which are covered with data breach insurance.

Beyond Insurance Coverage

As with our example of checking references before hiring a contractor, there are a number of key areas that you should explore and research before making an investment, depending on the nature of your business. If you sell products online, for example, there are a number of outsourced components that your business reputation will need to depend on. These include, but are not limited to, the reliability of the web servers your ecommerce site resides on, the security of the transactions that occur on your site, and the quality of the code behind your website, which, if created poorly, could create errors or a bad experience for your customers.

Whatever your industry, or whatever products or services you offer, your needs are unique. Be sure to speak with a trained and qualified small-business professional to discuss your vulnerabilities and risks.

How Health Care Reform May Affect Your Small Business

Health Care

Health Care

How does the Patient Protection and Affordable Care Act, signed into law in March 2010, affect you? As a small-business owner, you may find the changes affecting your method of buying and supplying health insurance.

The Patient Protection and Affordable Care Act will extend health insurance coverage to 32 million uninsured Americans.

Included in the law is a Small Business Health Care Tax Credit. The tax credit, which took effect Jan. 1, 2010, can cover up to 35 percent of the premiums a small business pays to cover its workers. In 2014, the rate will increase to 50 percent for small businesses. The Internal Revenue Service made final guidelines available Dec. 2, 2010.

The estimated tax credit savings for small businesses is $40 billion by 2019.

According to the Frequently Asked Questions page on the White House website,

“Your business qualifies for the credit if you cover at least 50 percent of the cost of health care coverage for your workers, pay average annual wages below $50,000, and have less than the equivalent of 25 full-time workers [for example, a firm with fewer than 50 half-time workers would be eligible].

“The size of the credit depends on your average wages and the number of employees you have. The full credit is available to firms with average wages below $25,000 and less than 10 full-time equivalent workers. It phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.”

The 2010 changes are different from what will be in effect in 2014.

Here are some of the details:

  • The tax credit is available for small nonprofit organizations as well as eligible businesses.
  • Companies with 51 or more employees do not qualify for the tax credit.
  • In 2014, companies that do not provide health insurance and have more than 50 employees will be fined $750 per full-time employee. That does not apply to companies with fewer than 50 employees.
  • Starting in 2014, companies that provide their employees with “Cadillac” health insurance will be taxed at 40 percent.
  • In 2014, states will set up Small Business Health Options Programs, also known as SHOP exchanges, which will allow small businesses to group together to purchase health insurance.

The cost of the health care overhaul is approximately $940 billion. Doug Elmendorf, director of the Congressional Budget Office, recently made a presentation about the effects of the new law on the economy.

For more information, visit :




Cyber Liability Insurance: Why Your Business Needs It More Than You Think

For a business owner, assessing potential business risks is an ongoing process that is critical to success and longevity. Natural disasters, employment practices, and other general liabilities are always at the top of the list in terms of managing risk and protecting businesses from potential financial loss. The significance of risk management continues to increase as business owners navigate today’s economic climate and depend more on doing business on the web.

As businesses continue to grow, so does the necessity to do business via the web. Ecommerce has given consumers the ability to purchase goods and services using their credit cards from businesses on the web. This trend has led to a staggering increase of data-breach cases and the unintentional releases of secure information into unsecure environments across the globe. Breaches ranging from common employee mishaps to organized crime aimed at stealing personal information and data have increased the demand for cyber liability insurance across the United States.

Traditional insurance doesn’t address web exposure or the loss of data, exposing businesses to possible liability claims that can amount to significant financial burdens. According to research by the Ponemon Institute, in 2009 alone, U.S.-based businesses lost a total of $6.75 million as a result of various data-breach cases across the United States. In 2009, only 30 percent of businesses in the United States carried cyber liability insurance.

Cyber liability insurance protects against the liability businesses face due to data breaches and unauthorized access to private information or data. There are several policies that address these liabilities specific to individual businesses. First-party coverage protects against business losses, and third-party coverage protects against the loss of personal data during a beach. Insurance carriers continue to expand cyber liability plans to protect a variety of businesses from experiencing possible liability claims resulting from data breaches.

Aside from the potential financial losses that businesses can accrue because of such breaches, the U.S. Senate continues to consider the Data Security and Breach Notification Act of 2010. The bill, which was referred to committee, would require that businesses with large consumer databases mandate security practices to ensure the protection of stored information from unauthorized access.

The increase in data breaches across the globe has become a growing concern for business owners everywhere. They are recognizing the importance of exploring every possible avenue when it comes to protecting their businesses from the loss of secure information and data, possible reputation damage, and the financial losses that come with breaches in cyber security.

The increase in data breaches across the globe has become a growing concern for business owners everywhere. From embarrassing employee mishaps resulting in the loss of secure information and data and possible reputation damage, to the looming financial losses that come with such breaches, it has become very important for business owners to explore every possible avenue when it comes to protecting their businesses. Cyber liability insurance could help ease the pain that business owners experience when they experience data breaches. In the future, cyber liability insurance, much like doing business via the web, may become a necessity.

Do You Need Professional Liability, and What Does It Insure?

When a small-business owner is assessing his insurance needs, it is important for him to fully understand the differences between professional liability insurance and general liability insurance. We talk to business owners every day, and it is evident that there is some confusion. In most cases, when a business provides a professional service, it will need both policies to fully protect and mitigate its potential risks.

General liability insurance will protect a business in the event the insured operations, employees, or products cause bodily injury or property damage to others, and the business becomes legally obligated to pay damages. The policy will also cover defense costs when a claim is made, even if the claim is without basis. Do not depend on general liability insurance for protection against any claims made for negligence in providing professional services.

Professional liability insurance, also known as errors and omissions, E & O, or malpractice, will protect you from financial losses from lawsuits filed against you or your business by your clients for failure or alleged failure to properly provide professional services. Professional liability is appropriate for professionals, such as accountants, tax advisors, doctors, lawyers, real-estate agents, home inspectors, appraisers, insurance agents, consultants, notaries, web designers, architects, and engineers, just to name a few.

Professional liability policies are offered by a wide range of insurers and can be customized for specific professionals to fit their needs. It is crucial to find the right coverage for the right profession written by a solid, highly rated insurance company. For some professions, insurance companies will write policies that combine general liability with professional liability, which usually improves the cost.

Coverage is issued on a claims-made basis, which means that the policy will only cover claims made during the policy period, so it is time sensitive. It is recommended that you renew your policy annually to keep a continuity of coverage.

In some cases, carrying professional liability will be a requirement to get a contract. Although it is an expense, it may be an expense to help a business grow sales.

Make sure you evaluate your needs and protect your profession!