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Monthly Archives: February 2018

The Benefits of Crime Insurance

As a leader within your organization, you want to trust your employees and the people you do business with. However, no business is immune to the threat of crime and fraud. In fact, the Association of Certified Fraud Examiners estimates that a business can expect to lose 5 per cent of its revenue to fraud each year.

Thankfully, companies can turn to crime insurance, which can provide the following benefits:

  • Coverage for the misuse of funds—It is likely that a number of your employees have access to company funds or financial information. In some cases, employees may abuse this access for personal gain. Crime insurance can protect organizations from the misuse or illegal transfer of funds, ensuring your finances are safe from internal criminal acts.
  • Extortion safeguards—While it can be difficult to imagine, employees and outside actors can extort a company for funds by holding a director or officer hostage or through other illegal methods. Without crime insurance, your organization would have no means to recoup these losses, which could devastate your bottom line.
  • Reimbursement for computer fraud—Computers and emerging technologies have made it easier for employees to carry out crimes against their employers. Crime insurance can provide a crucial layer of protection for any money or securities lost via computer fraud, which is an important piece to an effective cyber risk management program.
  • Coverage for forgery and alteration—Your employees may have access to cheques that they can easily alter for their own gain. Crime insurance policies provide coverage for losses that result from the forgery or alteration of a cheque.

The only way to ensure your company has the protection it needs is through crime insurance. To discuss your unique risks and to learn more about crime insurance policies, contact your insurance broker.

© Zywave, Inc. All rights reserved

Addressing Sexual Misconduct Allegations with Insurance

Allegations of sexual misconduct against politicians, celebrities and other public figures have become increasingly common in recent years. In fact, social movements and a strong public outcry have led to a marked increase in sexual harassment claims—claims that can be incredibly damaging for organizations themselves.

When these claims arise, organizations are expected to handle them quickly and tactfully, while respecting the weight of the situation and the wishes of the alleged victim. What’s more, alleged sexual misconduct, regardless of whether it is against an executive or employee, can result in a wide variety of claims against a company and lead to serious reputational damages.

As such, companies need to handle these situations with great care and be prepared with the proper insurance. Because no single insurance policy provides coverage for every type of claim that may result from misconduct allegations, policyholders should examine a variety of coverages to ensure they have protection when they need it most.

Employment Practices Liability (EPL) Insurance

When it comes to protecting your organization against alleged sexual misconduct claims brought about by employees, EPL insurance is often the best source of coverage. Specifically, EPL insurance can provide protection for employment-related misconduct claims.

Most policies cover claims for sexual harassment, wrongful termination, discrimination and retaliation. In some cases, policies can provide coverage for additional employment-related claims, including defamation. EPL insurance can also protect against claims made by non-employees, like vendors or customers.

It should be noted that EPL insurance often excludes claims that allege bodily injury. Therefore, in the event that a claimant alleges both verbal and physical harassment, an EPL policy may only provide partial coverage.

General Liability Insurance

General liability policies are designed to protect businesses from claims related to bodily injury or property damage for which your business is found to be legally liable. In some situations, general liability policies can be used in sexual harassment claims. Specifically, general liability insurance can provide coverage for claims alleging personal injury and defamation, which is useful in some misconduct lawsuits.

However, general liability policies have their drawbacks when it comes to defending sexual harassment claims. Often, unfair or discriminatory employment practices are not covered, which can include claims related to hiring and termination, demotion, reassignment, employee evaluations, discipline and harassment.

Essentially, if an employee alleges he or she was treated unfairly or that you acted illegally, a general liability policy will usually not respond.

Directors and Officers (D&O) Insurance

Most directors and officers are surprised to learn that their own employees are one of the most common sources of D&O claims. In fact, if employees are mistreated during any phase of their employment, they may bring their concerns to the organization’s management team. If employees feel that their concerns have not been addressed in a satisfactory manner, they may seek legal action as a means of resolving their grievances.

Some of the most common employment practices claims against directors and officers include discrimination and sexual harassment.

It’s important to keep in mind that D&O coverage for sexual misconduct claims is ­limited by standard exclusions for bodily injury, which may extend to claims for mental anguish, humiliation and emotional distress, and wilful or intentional misconduct.

Crisis Management or Reputation Risk Insurance

In some cases, reputational fallout from a sexual harassment allegation can be more costly than litigation itself. Even if an allegation is handled gracefully, organizations can lose favour in the public eye, sometimes indefinitely.

Crisis management insurance and reputation risk insurance are two newer forms of coverage that can address the risks of negative publicity. In a basic sense, these policies provide the following:

  • Crisis management insurance—When a triggering event occurs, crisis management insurance often covers the costs of hiring of a public relations firm.
  • Reputation risk insurance—Reputation risk insurance generally provides coverage for actual business losses sustained as the result of a negative publicity event.

It should be noted that policy language for crisis management and reputation risk management insurance can vary widely. Depending on the type of coverage purchased, sexual misconduct-related events may or may not be covered, so it’s important to be specific and ask questions during the underwriting process.

A Layered Approach to Addressing Sexual Misconduct Allegations

Organizations are expected to take sexual misconduct claims seriously and examine their internal policies. In addition to securing the right coverage, it’s critical for companies to encourage a positive corporate culture and address sexual assault, harassment and discrimination claims directly.

Again, no one policy provides organizations with ample protection against sexual misconduct allegations. In order to remain protected, companies need to take a layered approach when it comes to insuring their business.

To learn more about the policies mentioned above and other effective risk management strategies, contact your insurance broker today.

© Zywave, Inc. All rights reserved

Bank of Canada Survey Reveals Positive Business Sentiment

According to the Bank of Canada’s latest business outlook survey, Canadian companies are optimistic about the future. In fact, the survey found that firms were planning to boost their investments and hire more workers. This finding comes after the country added 79,000 jobs in December 2017, pushing the jobless rate to its lowest level since 1976.

Other interesting takeaways from the survey include the following:

  • Expectations for sales activity remain positive but point to some moderation ahead. Many firms expect stable sales growth, particularly in the goods sector and from domestic customers.
  • Firms are expected to expand operations to accommodate sustained demand. Hiring intentions have increased since the fall of 2017, particularly in the service sector.
  • Despite increased hiring at the end of 2017, labour shortages are becoming more common. Such shortages are common in the information technology, tourism, hospitality, construction and real estate sectors.
  • Firms saw an acceleration in the pace of past sales, reflecting recent healthy demand growth.
  • Despite capacity constraints and growing labour shortages, inflation expectations were modest or unchanged from prior surveys.

The survey findings weren’t all positive, however. Specifically, the survey noted increasing concern about the renegotiation of the North American Free Trade Agreement (NAFTA), which U.S. President Donald Trump has threatened to terminate. To learn more about these and other findings, read the original survey here.

© Zywave, Inc. All rights reserved

Top Legal Risks to Watch in 2018

As the economy becomes increasingly complex and unpredictable, businesses continue to face serious legal risks. According to a report from Borden Ladner Gervais, Top 10 Legal Risks for Business in 2018, this year is no exception. The following are a few risks highlighted in the report that organizations should be aware of:

  1. Cyber compliance. In 2017, the government published proposed regulations regarding the reporting of privacy breaches under the Digital Privacy Act, which amended the Personal Information Protection and Electronic Documents Act in 2015. Among other strict rules, the regulations require companies to create and maintain a record of every personal information security breach, and provide those records to the Privacy Commissioner on request. Non-compliance with these rules could result in fines. These regulations are expected to be finalized in 2018.
  2. Cannabis Act enforcement. The Cannabis Act is expected to come into force by July 2018, creating a number of highly disruptive and uncertain changes. Employers must meet with their legal counsel and communicate their current workplace polices on drug and alcohol use to employees. Doing so will help employers better understand the implications of the Cannabis Act and how it will impact business as a whole.
  3. Tax rates. Increases to marginal income tax rates place businesses at a competitive disadvantage when it comes to attracting skilled labour and investing. In addition, recent proposals from the Department of Finance could adversely affect after-tax financial results for private companies.
  4. Sexual harassment. There were a number of high-profile sexual harassment cases in 2017. Because of this, in 2018, experts expect a continued focus on how employers address sexual harassment in the workplace. Above all, employers should review their harassment-related policies and procedures to ensure they meet applicable legal obligations.

© Zywave, Inc. All rights reserved



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