Why your privately held business needs directors and officers insurance

By Tom Kelly

Every corporation relies on the guidance of its board of directors for success. Although lawsuits against larger, publicly traded companies receive the lion’s share of media attention, privately held corporations are also vulnerable to lawsuits by competitors, government agencies, creditors and employees. You can protect your hard-earned success by purchasing directors and officers insurance (D&O) coverage for your company.

Having directors and officers insurance coverage in place can help you attract the talent you need for your board. Directors or officers of privately held companies who do not insist that the company purchase D&O insurance are putting themselves, their spouses and their estates at financial risk. D&O insurance minimizes risk to their personal assets.

Not having D&O coverage can have a serious impact on a company’s viability. Even a financially sound business may have insufficient funds to defend officers and directors in the event of a lawsuit. A D&O policy will take care of defense costs and settlement, even if the company ends up in bankruptcy.

States impose statutory duties on corporate directors. D&O coverage protects the company and its directors from claims arising from alleged or actual failure to uphold those duties. Directors are under legal obligation to govern their corporation and carry out their responsibilities of office:

  • in good faith
  • in the best interest of the corporation
  • with the care that an ordinary prudent person in a like position would exercise under similar circumstances

Similar duties are imposed on officers of a corporation who may or may not serve on the board. Both directors and officers share the duty to:

  • grow the company by prudently managing the affairs of the business
  • exercise due diligence that is standard for operating the business
  • maintain loyalty to the corporation to avoid conflicts of interest
  • obey the corporate charter and state corporate statutes

Policy limits and other factors can vary. Your legal advisers and local independent insurance agent can help you determine how much coverage you need. Premiums are based on the coverage limit requested and other factors such as type of business, financial strength, claims history and deductibles.

Additional coverages, such as employment practices liability, fiduciary liability and cyber liability insurance, may also be available to eligible companies for an additional premium.

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Data Privacy Day: Getting ready for wearable technology

By Helen Kyrios

Data Privacy Day, observed annually on January 28, encourages all of us to make protecting privacy and data a greater priority. In preparation for the Apple Watch™ set to debut in early 2015, businesses and employers should learn more about this new device – and similar technology – to understand the potential benefits and risks.

Many businesses already have policies and procedures in place to address the risks from mobile technology, such as smartphones, laptops and tablets. Wearable technologies come with a new set of risks. Businesses should consider expanding their existing acceptable use policies to include wearable technology such as smartwatches and smartglasses. For instance, if smartphones are not allowed within the workplace due to the risks a camera, audio recording and data storage bring with them, then a smartwatch should not be allowed either. The same goes for the use of wearable technology by drivers of your company vehicles.

Another solution is updating your organization’s network security infrastructure so that it can detect the movement of data to and from these devices. This will help to detect, and in some cases prevent, data loss through the use of wearable technology.

Finally, review your existing insurance policies to identify additional liability exposure or potential gaps in your existing insurance portfolio. Your insurance provider can help guide you with risk mitigation measures.

Every new technology comes with its own set of privacy risks and vulnerabilities. Wearable devices have a lot of positive potential for businesses. In addition to facilitating communication and making the workplace more efficient, wearable technology may be able to make it safer. The challenge is to embrace the new technology while also having a smart plan in place to address privacy and security concerns. Your independent insurance agent can provide valuable insight as you begin to consider the insurance impacts of wearable technology in the workplace.

About Data Privacy Day

Led by the National Cyber Security Alliance, Data Privacy Day began in the United States and Canada in January 2008 as an extension of the Data Protection Day celebration in Europe. The Day commemorates the 1981 signing of Convention 108 – the first legally binding international treaty dealing with privacy and data protection. The official hashtag of DPD is #DPD15.

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Living benefits: Accelerated death benefit riders

By Nathan Otto

Living benefits: Accelerated death benefit riders

When choosing a life insurance policy, the death benefit paid to a beneficiary is the primary focus. However, did you know that some life insurance plans provide additional living benefits? Policies not only provide financial security after death, but in some cases they may provide benefits in the event of a terminal or permanently incapacitating illness.

An accelerated death benefit rider is an enhancement to a life insurance policy that allows a policy owner to access some portion of the death benefit while the insured is still living. These proceeds can be used in any way that the policy owner chooses: to cover medical costs, to pay expenses needed for nursing home care or even to fulfill a lifelong dream.

With an accelerated death benefit rider, several events in your life could give you early access to some portion of the death benefit of your life insurance policy:

  • Diagnosis of a terminal illness, with death expected to occur within a certain period
  • Incapacitation resulting in the inability to perform a specified number of activities of daily living, such as eating, bathing or dressing
  • Permanent confinement to a nursing home

After purchasing a life insurance policy with this kind of rider or enhancement, these triggers could grant you access to some portion (often a percentage) of your total death benefit. Check with your attorney or financial adviser to understand all implications that receiving a living benefit could have on taxes or on the final amount paid by an insurance company at your death.

An accelerated death benefit rider is often offered as an option when you purchase a new life insurance policy, sometimes at an additional premium but in some cases at no additional cost. In certain situations, you may also add these benefits to an existing policy.

The best way to know what options exist for you is to review your current life insurance policy with your independent life insurance agent. Ask your agent if you have the option to obtain living benefits and what conditions must be met to access them.

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Be alert for skimmers and scammers!

By Mike Dockery

Be alert for skimmers and scammers!

Before you swipe your bank card or credit card to make a payment or complete a bank transaction, be alert for skimmer devices attached inside or over the real card reader. Criminals use skimmers to capture the information from the magnetic strip on credit or debit cards, gaining unauthorized access to consumer accounts.

Skimmers have become increasingly prevalent as they are easy to put in place. The skimmer device fits right over or inside the real card reader. When the card is swiped, it passes through the skimmer before going into the real reader. Skimmers have popped up at bank drive-through ATMs, gas stations and other businesses, especially in remote locations or places that are difficult to monitor.

There are a few things you can do to make sure your account information stays safe.

Look before you swipe

Look for signs of tampering or bulkiness of the card reader you are about to use. If it looks too thick, damaged, loose or just does not look right, report it to the bank or business and use a different machine. Consumers have even reported parts of skimmers coming off the ATM. The FBI offers additional tips and illustrations of what to look for. If you see someone tampering with or hanging around an ATM machine, report this information as soon as possible to law enforcement or the bank or related business hosting the machine. Sometimes criminals hang around machines to collect information via a Bluetooth connection or wait for an opportunity to add a skimmer or make changes to a machine.

Protect your chipped card

Many newer credit cards have radio frequency identification (RFID) chips. The chips use a wireless, electromagnetic field to transmit information across short distances. Criminals use small remote skimmers that can be concealed in a pocket to collect information from the RFID chip. With these skimmers, the card need not be physically swiped to compromise the information. The electronic pickpocket need only walk a few feet away from you to collect information from the chip.

To prevent information theft, use a card carrier with a lined casing to shield the signal from the card. The Massachusetts Office of Consumer Affairs and Business Regulation put out a Consumer Alert describing additional measures you can take, such as stacking several RFID-equipped cards together.

What to do if you’re hacked

If you do fall victim to a skimmer or RFID scam, immediately report it …read more

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10 tips to improve construction site security

By Troy Dohmeyer

10 tips to improve construction site security

Equipment and material theft is a major source of loss for contractors. While insurance may offset some of the financial costs, many uninsured costs – deductibles, replacing depreciated items with new equipment, production delays, paperwork and time to report and replace stolen equipment – are paid by contractors.

Good planning is essential to construction site security, preventing theft of valuable construction materials and tools.

General contractors and subcontractors can benefit from these 10 tips to improve site security:

  1. Create a job site security plan before the project commences. Have a written security policy, and a security plan specific to the job site.
  2. Assign supervisory security responsibilities, and encourage security awareness among all workers. Contact the local police and fire departments before starting a job to establish cooperative efforts. Establish contact with management of neighboring properties, and encourage them to report suspicious activities.
  3. Identify assets and property onsite, then inventory and track them regularly.
  4. Secure the site perimeter with proper fencing as a first line of defense, and maintain a clear zone adjacent to fencing.
  5. Lock up materials, secure vehicles and equipment and install hidden kill switches to disable ignitions.
  6. Control site access by establishing – and monitoring – only one access point. Consider limiting vehicle access. Provide parking areas outside of the site for employees and visitors.
  7. Light up the job site to effectively deter theft and vandalism.
  8. Ask employees and subcontractors to also take responsibility for a secure site and to immediately report any incidents of theft or vandalism.
  9. Consider using security guards and have them patrol the site. Provide them with a means of communication.
  10. Consider installing a video monitoring system to capture vehicle traffic entering and exiting the site.

You can address most of these controls by updating procedures. To help with the rest, consider using a security company that offers instant, portable, wireless monitoring for theft, fire, flood, motion, temperature extremes and more.

For more information about job site security or other construction-related issues, contact your local independent agent for loss control information, or review our Web resources at and then Business Tips or Alliances For You.

Also, please see our prior blog, Heavy equipment theft can cost time as well as money.

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Snow can be hazardous to your health

By Steve Metzger

Snow can be hazardous to your health

Snow can be a beautiful thing…until you have to shovel it.

Every year, hospitals treat patients with back injuries, muscle strains and even heart attacks caused by shoveling snow. While the risk is probably low for most healthy people, those who are older, out of shape or who have pre-existing medical conditions such as heart problems or asthma may need to be cautious and should consult their doctors before exerting themselves.

Here are some things to keep in mind as you arm yourself to battle winter.

Protect your heart and your back

  • Follow any restrictions your doctor recommends. The combination of physical exertion and severe cold temperatures can increase the workload on your heart.
  • Warm up your muscles before you shovel, just as an athlete would warm up before physical exertion.
  • Move more, light shovel loads rather than fewer, heavy loads and, where possible, push the snow instead of lifting it.
  • Keep ahead of the snow. It’s less stressful to remove 2 or 3 inches at a time rather than wait to remove a 6-inch snowfall all at once.
  • Follow guidelines to avoid cold stress and stay alert to symptoms of hypothermia: drop in body temperature, shivering, slurred speech or confusion.
  • Dress appropriately for the weather, with footwear that won’t slip. Dress in layers for ventilation and insulation, with a top layer that repels water. Don’t overdress.
  • Use a lightweight, strong shovel with a handle long enough to prevent you from bending.
  • Pace yourself; take frequent breaks.
  • Stop and drink water to prevent dehydration.

More information

The American Heart Association is a national voluntary health agency to help reduce disability and death from cardiovascular diseases and stroke. Find information about Shoveling Snow Health Hazards and the Heart Attack Warning Signs on their site.

The Spine Institute at The Christ Hospital in Cincinnati provides eight tips to protect your back when shoveling snow.

The Canadian Centre for Occupational Health and Safety (who would know more about snow than our neighbors up north?) offers a number of tips for shoveling snow (or as they spell it, “shovelling”) including ergonomics and how to choose a shovel.

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Making a positive impact: Loss control

By Kellie Anderson

Making a positive impact: Loss control

The insurance industry is growing and has a high need for talented professionals with a variety of training and skills. Recruiters are asking job seekers “where do you fit in?” In this series, Cincinnati Insurance associates describe their own career journeys.

As a loss control consultant, I work with our policyholders to help them recognize their risks, understand how those risks could negatively impact their business and employees, and learn what they can do to make improvements. The path I took to my career may not have been direct, but it was a perfect fit for me to meet my goal.

As a first-year college student, just like everyone else I had to decide what I wanted to major in. I really had no idea, but I knew that I wanted to do something that would positively impact the lives of others.

I originally thought physical therapy was the answer and started down that path. After a year of classes and starting my first internship, I realized that wasn’t the right path for me. But what was?

A university email highlighted the occupational safety and health program, so I thought I should check it out. I met with the professors, took a couple of courses and enjoyed the program. I studied subjects as varied as fire science, ergonomics, industrial hygiene, hazard control and behavioral safety – along with more typical subjects of accounting and chemistry. The next thing I knew, I was a few months from graduating and was beginning to look for a job.

During class one day, one of my professors announced that an insurance company was going to interview potential trainees. An insurance company? Isn’t my major designed to help keep people in the workplace safe? How could this fit?

I learned very quickly in my first loss control position that it was, in fact, a perfect fit. I am able to provide education and a variety of services so that business managers and employees complete their jobs safely each and every day. My efforts positively impact them by ensuring they go home from work in the same condition in which they arrived. Reducing claims also allows businesses to operate safely, smoothly and successfully and keeps insurance costs down.

Looking back now to my original goal ̶ have I made a positive impact on the lives of others as I originally set out to do? Yes, just in a very different …read more

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Time to double-check your pipes!

By Cincinnati Insurance

Time to double-check your pipes!

Now that the season has officially turned to winter, homeowners and business owners will want to increase monitoring to prevent damage from frozen pipes. These prior blogs give tips on how to prevent pipe freezes and offer techniques for minimizing damage if you do suffer a pipe freeze.

Let it flow, let it flow, let it flow…

(December 12, 2013)

Did you know that letting your most weather-susceptible faucets drip during periods of extreme cold can keep your water pipes from freezing? Don’t let cold weather ice your pipes this winter!

First aid for frozen pipes – steps to prevent more problems

(January 14, 2014)

With winter not even a month old, there’s plenty of cold weather ahead of us – enough to freeze pipes, causing costly water damage at your home or business. If you suspect you have a frozen pipe – you’ve turned on the faucet, but no water comes out – call a qualified plumber immediately.

Even if you’re not a snowbird, winterize your pipes!

(October 16, 2014)

Homeowners who “fly south” for the winter are familiar with the idea of winterizing their home to guard against freezing while they are gone. However, with weather patterns shifting, homeowners who stay home for the winter are finding there can be issues with freezing pipes, even though they are living in their home and running water daily.

Keep business flowing: Prevent frozen pipes

(October 14, 2014)

Arctic temperatures can have a dramatic effect on your building, freezing pipes and causing costly damage. Especially vulnerable systems include fire protection equipment and piping; heating, ventilation and air conditioning equipment; compressors and piping; water and sprinkler mains; valves; and sanitary systems.

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