14 Work Comp Audit Questions, Answered! | Part 2

A work comp audit is the examination of a policyholder financial and payroll records after the expiration of a policy. This process is done to determine the accuracy of the estimated premium when the policy was started. The number one way to fly through an audit is to be prepared!

You should always connect with your independent insurance agent to discuss all questions you have before the audit is conducted.

Here are the next 7 of the most common workers comp audit questions, answered!

 

Q8: Are sub-contractors subject to workers comp premium?

A: True independent contractors normally are not subject to a premium charge. Independent contractor status is determined on a case-by-case basis.

If you use contractors, you will be asked to supply some or all the following: business name, business license, copy of contract, Certificate of Workers’ Compensation Insurance, and contractor’s license number. If a construction contractor has a valid contractors’ license, a valid Certificate of Workers’ Compensation Insurance (if the contractor has employees), or an exemption from workers’ compensation issued by the Contractor’s State License Board, he/she may be considered independent.

You MUST Keep license information and Certificates of Insurance on file, or you will pay additional premium charges.

 

Q9: Why are there two or more classifications for some construction classifications?

Some construction classifications are dual wage classifications. The employee’s base hourly wage rate determines which class code applies. These wage rates are subject to verification at the time of the audit through a valid source, such as timecards, personnel records, and employee earning records. Keeping records that clearly show hours, job duties, and wage rates will allow you to take advantage of the lower-rated dual class.

If you are paying your employees by piecework, you must keep a record of the number of hours worked for each employee to qualify for the lower-rated dual class. If you do not keep a time log of the hours worked, the auditor will divide the total payroll by 40 hours per week to determine an hourly wage rate.

 

Q10: If my employees divide their time between different job assignments, can I divide their payroll between different classifications?

It depends on the classifications. It is important to note that in the case of clerical and outside sales employees, there is no payroll division allowed. There are other class codes that prohibit payroll division as well. If your employee divides time between two or more class codes that allow for payroll division, then you can divide their payroll provided the proper records are kept. This may include timecards or an employee log that keeps track of the hours worked by each employee for each job duty.

Payroll may not be divided by means of percentages, averages, estimates, or any basis other than specific time records.

 

Q11: What is overtime excess and how do I report it?

A: That portion of an employee’s overtime wage, which is over and above, the regular rate of pay is called overtime excess. This includes increased pay for time worked on holidays, Saturdays or Sundays, or the number of hours worked in any week or day beyond the standard for the industry. Overtime excess does not include extra pay for swing or graveyard shifts, for working certain hours on the clock, or incentive or bonus pay figured on volume without regard to hours worked.

Example: If your employee’s hour wage is $10 and the overtime rate of pay is $15 (at time-and-a-half), the overtime excess would be $5. In this example, you pay premium on the $10. An easy way to calculate the overtime excess for the time-and-a-half is to divide the gross overtime by 3 ($15 Divided by 3 =$5)

 

Q12: What is a waiver of subrogation and how do I report it?

A: If you contract with a company that requires you to provide a waiver of subrogation on your workers’ compensation policy, you waive any right to a third-party settlement for injuries to your employees that occur on that company’s job site.

When you have a waiver of subrogation for one or more companies endorsed to your policy, you need to keep track of employee payroll incurred while on the job site of those companies.

You can report your waiver payroll in two ways. First, when completing payroll reports (if applicable), you may use the blank lines below the class codes and list the waiver by class codes. For each class code that has waiver payroll, you would multiply the total waiver payroll by your billing rate and the waiver percentage. This amount is the additional premium you must pay. The second way is to keep the records as noted and wait for the audit.

Example: Your premium for $10,000 at an interim billing rate of $5 per $100 payroll is $500. Multiply the premium of $500 by the waiver rate of 3%. The additional premium charge to cover the waiver of subrogation charge is $15. Your total premium charge including the waiver is $515.

 

Q13: Are payments made to family members subject to premium?

A: Yes, as employees they are entitled to workers’ compensation benefits. 

Special rules apply to family members living in the main household while working on a family-owned farm.

 

Q14: What happens after the audit is completed?

A: You may ask for a full copy of the audit upon completion. Once complete, the audit is reviewed. The results of the audit will be sent to you in the form of a final statement.

What happens if I disagree with the results of the audit?

You should immediately contest the audit in writing with the insurance company. Identify the areas of the disagreement and discuss them with your independent insurance agent or the auditor. You may be asked to supply additional documentation to verify the discrepancy. Please call our agency and the audit supervisor if the matter remains unsolved.

Keeping complete and accurate payroll records is very important and may save premium dollars.

 

If you would like to discuss any aspect that affects your Workers Comp coverage and premium, here are 4 easy ways to reach us:
Phone: 877-994-6787
Text: 951-482-8144
Email: info@correctcomp.com
Web: www.correctcomp.com

Here are some kind words from a business that trusts Stromsoe Insurance Agency:
“I’ve been with Stromsoe Insurance For over 15 Years. Their Murrieta Office was actually my first Project after I got my license. I refuse to go anywhere else! They shop all my policies to save me money and i can talk to everyone with one phone call! I recently Moved to Arizona, and Started a new Company. Stromsoe was able to get me going and again has all my policies! Thx Guys!”
Mike Hughes – Semper Fi Plumbing, Inc. – Surprise, AZ – Client Since 2007

The CorrectComp system is a division of Stromsoe Insurance Agency

The 4 Cyber Attacks Business Owners Need to Watch Out For

More and more purchases are being made online and this transition to a post COVID-19 way of doing business means that safeguarding your company and customer data from cyber attacks is a must. The first step to protecting yourself and your business is to educate yourself on cyber threats. Here are four cyber-attacks to be aware of in order to secure your small business.

1. Phishing

According to the FBI, phishing scans more than doubled in 2020. Phishing strategies are often malicious users posing as a trustworthy source, such as your bank, requesting sensitive information such as your social security number or bank username, password and account number.

Thanks to social media, phishers have had an easier time launching attacks against unwary company owners in recent years. This is due to the fact that the majority of business owners, vendors, and workers post their information on the internet for everyone to see. Phishers can use this to generate highly customized emails and webpages that seem exactly like the sources they’re impersonating. This helps increase the chances of duping business owners and their employees.

2. Drive-By Download

The old mantra of “Just don’t click anything and you’ll be okay” when you stumble across something suspicious, is no longer sufficient. Unfortunately, drive-by downloads make it possible for websites to upload malicious software to computers without you even clicking on anything. The assault is started simply by browsing the website. Drive-by downloads are frequently used in conjunction with phishing emails.

3. Malware

Malware is a generic term referring to harmful software that can infect your computer and collect important information. Malware comes in a variety of forms, which you should be aware of:

  • Adware is a type of malware that is frequently packaged with free or pirated software and is meant to display ads, or pop-ups, while you use your computer’s web browser.
  • Spyware is software that monitors and records your activity, such as keystrokes and websites visited, in order to steal passwords. It might also alter the security settings on your computer.
  • Trojan horses take the form of ordinary files or computer programs. They allow a malicious party access to your computer and data, including your passwords and bank account details, once they’ve been downloaded.

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4. Point-of-Sale Hacking

Hackers can use this as one of the more high-profile cyber assaults against your small business. A hacker scrapes the credit card information saved on your point-of-sale equipment remotely using this method. This information is typically kept on a PoS device for only a fraction of a second before being encrypted. That microsecond is just enough time for hackers to grab the vital credit card information and transfer it to one or more remote servers.

It is rarely just one credit card number that hackers steal. More often, hackers will gain access to a point-of-sales device and scrape credit card information for months before being detected.

Learn How to Protect Your Business

Every single business is vulnerable to a cyber attack. When you look at some of the largest cyber breaches, you think of large companies. The names that come to mind are Target, Facebook, Google, Marriott…some of the largest corporations within the US have also suffered some of the largest cyber attacks. These are companies that invest millions of dollars into cyber security and the procedures implemented to mitigate those losses. With that being said, a small to midsize business owner is still vulnerable to these kinds of attacks at any time. You might consider these questions and more:

  • Do you collect sensitive data?
  • Are you performing financial transactions?
  • Do you have the ability for human-error?

No matter the security and procedures put into place, if you have a business email and bank account…you are at risk.

Cyber insurance generally covers your business’ liability for a data breach involving sensitive customer information, such as Social Security numbers, credit card numbers, account numbers, driver’s license numbers and health records. Any business that stores sensitive data in the cloud or on an electronic device should be protected by cyber liability insurance.

Cyber insurance can be essential in helping your company recover after a data breach, with costs that can include business disruption, revenue loss, equipment damages, legal fees, public relations expenses, forensic analysis and costs associated with legally mandated notifications.

 

Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 951-600-5751
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from one client that trusts Stromsoe Insurance Agency:

“Always there when you need them!”
Kelly Barttels – K Belle, Inc – Temecula, CA – Client Since 2021

PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!

14 Work Comp Audit Questions, Answered! | Part 1

A work comp audit is the examination of a policyholder financial and payroll records after the expiration of a policy. This process is done to determine the accuracy of the estimated premium when the policy was started. The number one way to fly through an audit is to be prepared!

You should always connect with your independent insurance agent to discuss all questions you have before the audit is conducted.

Here are the first 7 of the most common workers comp audit questions, answered!

 

Q1: Why am I being audited?

A: Audits are routinely conducted to verify the operations of the insured and to update policy information such as changes in operations, business locations, and new ownership. Audits are conducted to determine correct premium, and to confirm information used for calculating rates. Premium, experience modification, and classification rates are affected by the results of an audit.

 

Q2: What if I have questions regarding my workers’ compensation classifications?

A: The audit is an excellent opportunity to review and confirm proper classifications for the policy. The auditor will speak with the person who is best able to answer questions regarding your operations. It is not recommended that you refer the auditor to your bookkeeper or CPA to finalize the audit.

 

Q3: What records will I be asked to provide for the audit?

A: In general, you will be asked to provide State Quarterly Wage and Withholding Reports (DE 6s), payroll journals, and the payroll reports for the period being audited.

Since the information needed for each audit may differ, you may also be asked to provide other records that relate to your workers’ compensation policy. Examples may include payroll registers, time books, time cards, individual earnings records, check registers, check stubs, check books, cash disbursement journal, cash book, petty cash book, general or subsidiary ledgers, job cost records, confidential records, bonus ledgers, commission ledgers, profit sharing reports, 941s, W-2s, W-3s, 1096s, 1099s-Misc., 540, 1040 Schedule C, certified payroll, prevailing wage determination sheets, etc.

 

Q4: What type of wages and benefits are subject to premium?

Subject to Premium:

A: Premium calculations are based on gross payroll, not net payroll. Gross wages include salaries, commissions, bonuses, vacation, holiday pay, sick pay, overtime base wages, the market value of gifts, all substitutes for money earned or paid during the policy period including meals and lodging in lieu of wages, automobile allowances, and some pension play payments explained below.

Not Subject to Premium:

A: Payroll for officers specifically properly excluded from coverage under the policy, overtime excess (explained later), tips, severance pay, the value of an automobile furnished to an employee, reimbursement for expenses with receipts, and salary reductions to fund the welfare or fringe benefit portion of a Section 125 cafeteria plan.

  • Retirement/Pension Plans-Subject to Premium:
    Any amount by which an employee’s salary is reduced to fund a pension or deferred compensation plan.
  • Retirement/Pension Plans-Not Subject to Premium:
    Employer contributory payments including group insurance, stock purchase plans and qualified retirement plans. The exercise of stock options and withdrawals from deferred compensation plans are also not subject to premium computation.
  • What if I pay my employees in cash?
    If you pay your employees in cash instead of by payroll checks, you must keep a log of the cash payments, the hours worked, the date paid, the amount paid, and the first and last name of the employee. Otherwise, all cash withdrawals on your check register will be included in computing workers’ compensation premium.

 

Q5: Which employees qualify as clerical (code 8810)?

A: The use of this classification is subject to specific restrictions. The clerical employees must be physically separated from all the other working areas and their duties must be confined to general office work. Payroll division with any other class is prohibited.

 

Q6: Which employees qualify as outside sales (code 8742)?

A: Outside sales employees may be engaged in solicitation, collection activities or meeting with clients outside the office. The balance of their time can be spent in the office performing clerical duties. If they have duties of any other nature, they would be classified accordingly. Payroll division with any other class is prohibited.

The auditor will ask for the names, job titles, and payroll for clerical and outside sales employees. Having this information available before the auditor arrives will save time.

 

Q7: How do I report the earnings of our corporate officers, partners, or managing members of limited liability companies?

A: Unless specifically properly excluded by endorsement, officers, partners, or member managers are covered for workers’ compensation benefits. Payroll is reported subject to a minimum and maximum for each person. 

Those covered must be reported in the classification that best describes their job duties. They cannot be reported as clerical or outside sales unless their duties are confined to the work described in these classes. If they directly supervise any employee, they must be reported in the classification supervised.

Be sure to notify your independent insurance agency immediately of any changes in ownership.

 

If you would like to discuss any aspect that affects your Workers Comp coverage and premium, here are 4 easy ways to reach us:
Phone: 877-994-6787
Text: 951-482-8144
Email: info@correctcomp.com
Web: www.correctcomp.com

Here are some kind words from a business that trusts Stromsoe Insurance Agency:
“I’ve been with Stromsoe Insurance For over 15 Years. Their Murrieta Office was actually my first Project after I got my license. I refuse to go anywhere else! They shop all my policies to save me money and i can talk to everyone with one phone call! I recently Moved to Arizona, and Started a new Company. Stromsoe was able to get me going and again has all my policies! Thx Guys!”
Mike Hughes – Semper Fi Plumbing, Inc. – Surprise, AZ – Client Since 2007

The CorrectComp system is a division of Stromsoe Insurance Agency

Your Ultimate Business Insurance Guide

Every business has a custom insurance program because every business has different needs. Business insurance can seem like another language, but there are a few questions you should ask yourself to help determine what would best protect you and your business against your unique risks.

Do You Operate a Business?

The mere fact that you are reading this means the answer to this question is likely yes. The first policy that all businesses should purchase when it comes to protecting themselves and everything they’ve worked so hard for is:

General Liability Insurance (CGL)

From a one-man show to an entire empire, all businesses should have general liability. General Liability protects and defends your business in the event of a claim against you, your employees or your products or services up to your policy limits.

Business Liability Insurance can help your business if:

  • You accidentally damage a customer’s property while on the job
  • A customer slips and falls and gets injured at your business
  • Your business gets sued for slanderous comments you made about a competitor in an interview

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Does Your Business Have Property or Equipment to Protect?

Unless your entire business runs on your personality and know-how, like a business coach for example, you likely have property that you own or rent and some level of equipment that you use.

Commercial Property Insurance

If you own your building or have business personal property, such as office equipment, computers, inventory, or tools, you should think about including coverage on your policy that will cover you in the event of a fire, vandalism, theft, smoke damage, or other disaster. You might also want to add business interruption/loss of earnings protection in your policy to cover your loss of earnings in the event that your company is unable to function.

Business Interruption Insurance

Business interruption insurance is a form of business property insurance that provides money to pay for loss of income because of a covered loss.

Do You Have Employees?

From 1 to 1,000, a business that employs others has a different set of risks. There are certain coverages that are required, and others that are helpful additions to your insurance program.

Workers Compensation (required)

Workers compensation provides insurance to employees who are injured on the job. This type of insurance provides wage replacement and medical benefits to those who are injured while working. As a business owner, it is very important to have worker’s compensation insurance because it protects yourself and your company from legal complications. State laws will vary, but most states require you to have workers compensation if you have W2 employees. Penalties for non-compliance can be very stiff.

Employment Practices Liability Insurance (ELPI)

Employment Practices Liability Insurance (EPLI) is an insurance policy that protects your business against employment-related lawsuits.

The number of lawsuits filed by employees against their employers has been rising. While most suits are filed against large corporations, no company is immune to such lawsuits. Recognizing that smaller companies now need this kind of protection, some insurers provide this coverage as an endorsement to their Business Owners Policy (BOP).

What Does EPLI Cover?

  • Retaliation: Taking a negative action toward a person in response to a protected action or a decision they’ve made. Example – if an employee is terminated for telling a government agency about illegal activity at your company.
  • Sexual Harassment: Workplace sexual harassment is defined as “unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature.” Example – a joking comment that is sexually descriptive in nature with an employee.
  • Discrimination: Making improper or illegal decisions regarding a person’s compensation, promotion or hiring. Example – if an unqualified job applicant is hired because they’re the boss’ daughter.
  • Wrongful Termination: Giving a person an inaccurate, unfairly low or excessively negative performance evaluation. Example – if you make up a false incident report about an employee on a review.
  • Wage and Hour Claims: URGENT – Coverage for wage and hour claims is not included by most policies. Please contact our business insurance team for more details.

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Group Health Benefits

Group health benefits include medical insurance for employees or members of a company or organization. A group health insurance plan typically provides health insurance coverage to its members at a lower cost since the risk to health insurers is spread across the members of the group health plan.

Do You Provide a Service?

Any professional firm including lawyers, accountants, consultants, notaries, real estate agents, hair salons and technology providers, just to name a few, should consider an additional form of insurance.

Professional Liability Insurance

Professional Liability Insurance, also known as Errors and Omissions Insurance, is a policy that provides defense and damages for failure to or improperly rendering professional services. Your general liability policy does not provide this protection, so it is important to understand the difference. Depending on the profession, professional liability insurance may have different names, such as medical malpractice insurance for the medical profession, and errors & omissions insurance for real estate agents.

Do You Sell a Product?

Product Liability Insurance

Product liability insurance can help cover your legal expenses if someone claims that a product you sold, made, or distributed caused an injury or property damage. If you sell, make, or distribute products, you need this policy.

If that product allegedly hurts someone or damages their property, product liability coverage will help pay your legal fees, judgment, or settlement. Anyone can sue over damage from a product, even if they didn’t buy it or use it.

A product liability policy is also crucial for construction and contracting businesses. It offers financial protection when a client sues over a personal injury or property damage related to your completed work.

Other Essential Business Insurance Policies

Commercial Auto & Hired/Non-Owned

A commercial auto insurance policy protects a company’s vehicles. You can insure your company vehicles for liability, comp, collision and more. If you don’t have company vehicles, but employees drive their own cars on company business you should have a non-owned auto liability policy to protect the company in case the employee does not have insurance or has inadequate coverage. Many times the non-owned can be added to the BOP policy.

stromsoe-insurance-agency-business-insurance-guide-blog-hired-and-non-owned-business-auto

Cyber Insurance

Every single business is vulnerable to a cyber attack. When you look at some of the largest cyber breaches, you think of large companies. The names that come to mind are Target, Facebook, Google, Marriott…some of the largest corporations within the US have also suffered some of the largest cyber attacks. These are companies that invest millions of dollars into cyber security and the procedures implemented to mitigate those losses. With that being said, a small to midsize business owner is still vulnerable to these kinds of attacks. You might consider these questions and more:

  • Do you collect sensitive data?
  • Are you performing financial transactions?
  • Do you have the ability for human-error?

stromsoe-insurance-agency-business-insurance-guide-blog-cyber-insurance

Directors & Officers Liability Insurance

Directors and officers liability insurance applies to anyone who serves as a director or an officer of a for-profit business or nonprofit organization. A directors and officers liability policy insures against personal losses, and it can also help reimburse a business or nonprofit for the legal fees or other costs incurred in defending such individuals against legal action.

 

Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 951-600-5751
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from one client that trusts Stromsoe Insurance Agency:

“Amazing staff! Jennifer and Vanessa were very detailed and were able to acquire the perfect insurance policy for our business! Thank you again!“
Travin Griepenstroh – Unique Ultrasound – Temecula, CA – Client Since 2015

PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!

Does Your Business Insurance Travel with You?

Does your business insurance coverage properly protect you and your business for events and other operations away from your primary business premises? As businesses continue to reopen and we are all once again able to fill our networking calendars with events, it’s important to discuss your policies with your protection coach to ensure you are properly protected.

General Liability Insurance

A general liability policy protects your business from financial loss should you be liable for injury or property damage to others caused by your services, business operations or your employees. You should talk to your business insurance coach to ensure that your policy extends to an event away from your business premises to properly protect yourself and your business when attending networking events, tradeshows, mixers and the like.

Workers Compensation

Workers comp protects the employee and the employer for payment of medical bills for covered injuries sustained on the job & loss of earnings resulting from covered injuries sustained on the job. If your business operations will cross any state lines, make sure to discuss the details with your business coach to make sure your business is protected.

Equipment Coverage

This is where coverage talks can get tricky, because equipment coverage will vary from insurance company to insurance company. Equipment coverage for property away from your primary business premises may or may not be included in your policy. It’s best to call your protection coach and have a conversation about your particular needs and situation.

 

Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 951-600-5751
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from one client that trusts Stromsoe Insurance Agency:

“Thank you, Thank you, Thank you SIA. My business has rapidly grown, but I couldn’t have managed without you. You take the worry out of my insurance needs and that makes me extremely happy. Your entire staff is very knowledgeable and friendly. I would never go anywhere else for my business insurance.“
Robert Siever – Gasket Pro – Costa Mesa, CA – Client Since 2014

PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!

How Do You Insure Your Non-Profit?

Every non-profit is unique. Whether you work with vulnerable populations, rely on volunteers, put on fundraising events, transport the elderly, employ social workers, or other activities, your insurance needs are very specific to your operations.

Non-profit insurance is business insurance designed to accommodate the needs of a not-for-profit organization. Having business insurance for non-profit organizations can be crucial as it can protect against a variety of risks, from car accidents involving business vehicles to a client’s slip and fall in the office.

What Types of Insurance Policies Do Nonprofit Organizations Need?

There’s no master list of the types of insurance policies that non-profit organizations should purchase or what amounts of coverage they should buy. Instead, non-profits must rely on the expertise of local, licensed, experienced insurance agents to help them find the best insurance policies for their needs.

Following is a short list of some of the more common types of policies about which non-profit organizations should ask their insurance agents. They may need fewer policies and they may need different policies to cover different types of exposures and risks.

General Liability

All non-profit organizations should purchase general liability insurance. It covers against claims made by third parties for bodily injury and property damage that occurs in the course of the non-profit’s operations.

Property Insurance

Property insurance covers damage or loss to buildings, office equipment, inventory and any other property the non-profit owns. Fire and theft are common claims. Boards should be aware that not all insurance policies cover against floods and earthquakes.

Auto Insurance

Non-profits may buy auto insurance if their boards or employees use autos for non-profit business. You may purchase liability coverage to cover others and physical damage coverage for owned autos. Non-profits may also consider non-owned auto insurance coverage for volunteers who use their own vehicles for non-profit volunteering. Read more on non-owned auto policies here.

Workers’ Compensation

Workers’ compensation will provide coverage for payrolled employees who get injured on the job. This type of insurance is mandatory in California. This coverage will provide for medical expenses and wages if an employee gets injured while working for the nonprofit.

Directors and Officers Liability

This is another type of insurance that non-profits should not be without. It provides coverage for management decisions that board directors and officers make. D&O insurance protects the organization and individual board members. D&O insurance policies sometimes include insurance coverage for employment practices liability, which extends to volunteers as well as employees. This coverage protects against claims for harassment, discrimination and wrongful termination. Always consult with your local independent insurance agent to be certain of your exact coverage.

Professional Liability

Depending on it’s operational classification, a non-profit may have a professional liability exposure. Professional liability insurance is also referred to as errors and omissions insurance. Always consult with your local independent insurance agent to be certain of your exact coverage.

 

Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 877-994-6787
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from one Non-Profit Organization that trusts Stromsoe Insurance Agency:

“We are so pleased with your organization; it makes our job so much easier to have people like all of you to work with. I recently shared this with another local business owner, we praise you guys to the hilt”
Dorcas Shaktmas – Assistance League of Temecula Valley – Temecula, CA – Client Since 2012

PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!

Business Umbrella Insurance for a Rainy Day

What does commercial insurance need a business umbrella for? You might be thinking like this and we get this question a lot. Well, I’ve got a corporation. My veil is protected. Nobody’s ever gonna be able to pierce, the corporate veil. Sure about that? We hope not. And any corporate documents, any LLC documents, any written legal documents, are only as good as the person that wrote them, and the maintenance there of them.

At the end of the day, what I want you to think about when you’re thinking about protecting your empire, is the entity. Because insurance follows the entity first.

You’ve got to look at the underlying limit requirements, of the contract, and you need to evaluate your business auto; your workers’ comp; your general liability; and any other operations that you’ve got, to make sure they’re all protected under the umbrella. That underlying limit schedule, which is part of the policy, is a key component, to make sure that your umbrella coverage, responds and steps up. If that claim ever does happen, we want to make sure that protection is there, for you.

 

Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 951-600-5751
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from one client that trusts Stromsoe Insurance Agency:

“I have dealt with Stromsoe Ins for 13 years.  They have been outstanding in customer service and finding me the best policies for my needs.  I regret having to say good-bye as I say hello to retirement.”
Robert Siever – Gasket Pro – Costa Mesa, CA – Client Since 2014

PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!

Discrimination and Your General Liability Coverage

Discrimination and CGL Policies

What Does General Liability Cover?

Commercial general liability (CGL) is a type of insurance policy that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business’ operations, products, or injuries that occur as the result of the business operations. Commercial general liability is considered comprehensive business insurance, though it does not cover all risks a business may face.

These policies have different levels of coverage. A policy may include premises liability coverage, which protects the business from claims that occur on the business’ listed physical location. It may also include coverage for bodily injury and property damage that is the result of a finished product or service done.

What is Discrimination

Discrimination is the unfair or prejudicial treatment of people and groups based on characteristics. The most commonly discussed categories of discrimination are race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, age (40 or older), disability and genetic information (including family medical history).

Why Is Discrimination Not Covered Under CGL?

Imagine you are looking to promote one of your employees to a managerial position. Suzie is young and newer to the team, but has a go-getter attitude and you believe she is the right fit. You announce Suzie has been chosen for the position and you believe strongly in your decision and the impact you feel it will have on the company as a whole.

Soon after announcing Suzie’s promotion, you get a lawsuit from another employee, Steve, claiming age discrimination. Steve has more education, more experience and has been with the company longer than Suzie. He is asking for $40,000 in compensation for the difference between his current pay and benefits, and those he would have received had he been promoted.

Using this example, even if your policy does not specifically exclude discrimination, there are two main reasons why your claim could be denied under your commercial general liability policy: it’s not a covered injury as intended by the policy form and it’s not accidental.

Not A Covered Injury

Steve’s lawsuit is asking for reparations because of damages for economic losses like back pay, loss of future earnings, and lost benefits. A commercial general liability policy normally covers claims including damages for bodily injury, property damage or personal and advertising injury. Steve’s lawsuit does not allege the company for a covered injury.

Not Accidental

General liability policies cover injury or damage that results from an occurrence (accidental or sudden event) and discrimination doesn’t usually occur accidentally. Rather, discrimination results from intentional acts committed by employers.

 

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What Policies Cover Discrimination?

Usually, discrimination does not fall within the coverage terms of the commercial general liability policy and may even be specifically excluded. Employment practices liability insurance (EPLI) covers a variety of employment-related claims, normally including discrimination.

EPLI may provide protection against many kinds of employee lawsuits, including claims of:

  • Sexual harassment
  • Discrimination
  • Wrongful termination
  • Breach of employment contract
  • Negligent evaluation
  • Failure to employ or promote
  • Wrongful discipline
  • Wrongful infliction of emotional distress

 

Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 951-600-5751
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from one client that trusts Stromsoe Insurance Agency:

“I have dealt with Stromsoe Ins for 13 years.  They have been outstanding in customer service and finding me the best policies for my needs.  I regret having to say good-bye as I say hello to retirement.”
Robert Siever – Gasket Pro – Costa Mesa, CA – Client Since 2014

PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!

Uncovered Claims Average $40k-$60k for EPLI

The expenses associated with lawsuits for employment practice issues can be staggering and are on the rise. Employers can face a variety of complaints and litigation over wrongful termination, discrimination, harassment in the workplace and retaliation. To be sued, a company owner wouldn’t even have to be in the wrong. To better protect company assets, it is essential to find the right Employment Practices Liability Insurance (EPLI) to cover defense expenses and losses involved with multiple employment-related claims.

What Is Employment Practices Liability Insurance Coverage?

EPLI is insurance that gives companies coverage against employment-related lawsuits such as claims of harassment, wrongful termination, discrimination or other work-related issues. Such lawsuits are increasingly common in today’s business environment. The most common claims filed are for retaliation, sexual harassment, discrimination and wrongful termination.

Many large corporations are well protected and can deal with nearly any type of employment-related lawsuit. Unfortunately, new or small businesses can be highly vulnerable to this type of claim. Many of these businesses lack an employee handbook or a legal department that can advise on proper procedures to follow regarding terminating, disciplining and hiring employees.

If you need help with a handbook and other HR matters, click here!

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What Does EPLI Cover?

Retaliation: Taking a negative action toward a person in response to a protected action or a decision they’ve made. Example – if an employee is terminated for telling a government agency about illegal activity at your company.

Sexual Harassment: Workplace sexual harassment is defined as “unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature.” Example – a joking comment that is sexually descriptive in nature with an employee.

Discrimination: Making improper or illegal decisions regarding a person’s compensation, promotion or hiring. Example – if an unqualified job applicant is hired because they’re the boss’ daughter.

Wrongful Termination: Giving a person an inaccurate, unfairly low or excessively negative performance evaluation. Example – if you make up a false incident report about an employee on a review.

Wage and Hour Claims: URGENT – Coverage for wage and hour claims is not included by most policies. Please contact our business insurance team for more details.

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Do I Need This Coverage?

Employment Practices Liability Insurance comes in handy if your business:

  • Hires, promotes, demotes or fires employees or contractors
  • Evaluates employees or contractors
  • Offers raises to employees or contractors
  • Supervises employees or contractors
  • Monitors the communications of employees or contractors
  • Communicates to or about employees or contractors
  • Your industry is an environment where possible employee or contractor harassment could occur
  • Manages benefits for employees or contractors

 

Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 877-994-6787
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from one client that trusts Stromsoe Insurance Agency:

“I have dealt with Stromsoe Ins for 13 years.  They have been outstanding in customer service and finding me the best policies for my needs.  I regret having to say good-bye as I say hello to retirement.”
Robert Siever – Gasket Pro – Costa Mesa, CA – Client Since 2014

PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!

Safeguard Your Business with Group Health Insurance Benefits

If you’re considering a group health benefits insurance plan for your company, it’s important to have all the information before you choose a plan. Group health plans provide benefits coverage to an employer group, usually comprised of company employees or members of an organization.

How Many People Do You Need?

When you buy group health insurance, you have to have a group. In other words, a single individual can’t sign up for this kind of plan. For small businesses there can be as few as two people in the group during the special open enrollment period. Otherwise, you need 70% participation, not including owners or spouses, from your company’s employees in order to get group insurance.

Why Is Group Health Insurance More Affordable?

Once the company chooses a plan, group members are given the option to accept or decline coverage. In certain areas, plans may come in tiers, where insured parties have the option of taking basic coverage or advanced insurance with add-ons. The premiums are split between the organization and its members based on the plan. Health insurance coverage may also be extended to the immediate family and/or other dependents of group members for an extra cost.

Group health insurance is sometimes lower in cost than an individual plan as the risk to the insuring a company is lower, since the plan is shared across more people.

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What is Considered a “Small” Employer Group?

When we talk about small businesses in the context of group health benefits, a small employer is one that has from 2 to 50 employees. A sole proprietorship with only one employee (the owner) isn’t eligible, and if you have more than 50 employees you are considered a large group. The large group platform operates a lot differently than small group.

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How Does the Shared Cost of a Group Health Benefits Plan Work?

The cost of a group health plan is shared by everyone in the group, by the employer and employees. In other words, these plans sometimes cost less because there are more people in them. Also:

  • With some groups, employees pay a portion of their own health insurance premiums
  • To meet group health requirements, the employer must pay at least 50% of the employee health insurance premiums

Retaining talent is more important than ever. Showing your employees that you care about their well-being and by truly offering to help them by providing the option of group health and benefits insurance, this gives your employees one more reason to continue their career as part of your team.

 

Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 877-994-6787
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from one client that trusts Stromsoe Insurance Agency:

“Dedicated to helping small businesses during these hard times. Great customer service and extremely knowledgeable in their products. Would highly recommend.”
Doris Hess – Relentless Brewing & Spirits – Los Angeles, CA – Client Since 2020

PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!