why we need a copy of your contract to issue a certificate

why we need a copy of your contract to issue a certificate

You may feel like your insurance broker is being nosy when they ask for your contract in order to issue a certificate— but this is not the case!

Watch Benchmark’s own Rob Cohen and Peter Katkov discuss why your insurance broker might ask for a contract to issue a certificate below.  

 

why do we need to review your contract? 

A certificate of insurance (COI) is simply a form of evidence of the liability policies that our client may have. Generally, it consists of general liability, auto liability, and workers’ compensation. We also need to know what the terms and scope of your agreement are in order to provide the best service possible.

As insurance brokers, we have a choice on the additional insured endorsements we allow. Some of these endorsements may incur additional costs. In reviewing your contract, we’re able to better understand what obligation is required of our clients and of the insurance company. 

does the certificate convey coverage? 

It’s important to note that a certificate doesn’t convey coverage. It is simply evidence that coverage exists in order to enter into the agreement. A certificate is taking an extra step to ensure that both parties are properly informed and covered during an engagement. 

why would I need a certificate of insurance?

Generally, a certificate is needed because a third party is involved. The certificate itself is evidence of coverage. It is the supporting documentation that actually transfers the rights of coverage to that third party when our clients are contractually obligated to do so.

For example, if you hired a plumber, you would want to make sure their coverage was going to cover any damage to your house.  Let’s say the worst-case scenario happens— Sweating pipes burn the house down. If you are additionally insured, his insurance will cover the cost of the damage.  

going the extra mile

If your broker is not performing those tasks for you and looking deeply into the requirements that are being asked of you, then they may not be doing their full job.

Just to be very clear— your broker should be going the extra mile and understanding your contracts in order to provide the best possible service. 

If your current insurance broker is not doing that, or you have questions, feel free to reach out to benchmark commercial insurance and talk to one of our trusted brokers. 

Curious to know about what happens when you do go through a commercial insurance claim? Read one of our recent blogs, describing the process and how you can protect your business.

benchmark team holiday traditions

benchmark team holiday traditions

It’s the most wonderful time of the year! While the office is busy preparing for commercial insurance changes in 2022, the holiday season is still being celebrated at benchmark commercial insurance. 

We wanted to highlight the team’s favorite holiday traditions and current inspirations for the new year. Keep reading to get the inside scoop on what the holidays look like for our team.

Ethan Sutton, Marketing Representative

“I’m Looking forward to traveling again, both interstate and intrastate.” 

Cindy Adler

“Whatever it is you’re scared of doing, do it.  Make your mistakes, next year and forever. You never know until you try.” 

Steve Quinones, Commercial Account Manager

“I’m looking forward to developing new skills and increasing knowledge, professionally and personally.”

Rob Cohen, CEO 

“Looking forward to health, prosperity, and fun!”

Peter Katkov, Commercial Lines Broker

“The challenges of 2020 and 2021 have proven to me that as a team we can rise to overcome obstacles and not just survive but thrive.  Bring on 2022!”

Candace Cohen

“Be fearless in 2022! If you want to be the best, you have to do things that other people aren’t willing to do.”

Deanne Session, Personal Lines Broker 

“2021 was a year full of HUGE changes for me Professionally and Personally so I am looking forward to settling into all the changes and making new connections with clients and friends. 2022 is going to be even greater than 2021!”

Do any of these goals and inspirations ring true for you? We would love to hear more of your insight! Feel free to reach out today. 

As you look to 2022, what are you focused on? As an insurance agency, we, of course, are thinking about our client’s potential risk factors. One area of concern for most business owners is cybersecurity risks. Check out a few tips on how to work to mitigate your cybersecurity risk in the new year in this article.

earthquake insurance: shaken not stirred

earthquake insurance: shaken not stirred

Do You Need Earthquake Insurance?

Your home and your business are some of the largest investments you will ever make.

California is known as a hotspot for earthquakes. With multiple fault lines running through the state, it’s no wonder that earthquake insurance costs can be so pricey. In both personal and business insurance planning, it’s important to ask, “Do I need earthquake insurance?” 

Unfortunately, most business and homeowner insurance packages do not include earthquake coverage, and investing in earthquake coverage can be costly. 

Southern California, specifically, is typically at high risk for experiencing earthquakes. Earthquakes with a magnitude of 6 or greater may cause serious damage to areas that are densely populated. 

How can you begin to prepare for an earthquake before it occurs? Do you have a disaster plan ready to go? Want to improve your earthquake preparedness? Read on for more.

how much does earthquake insurance cost? 

Most homeowner and business insurance policies don’t cover earthquake damage, you will need to invest in an added layer of protection. Earthquake coverage is offered as a separate coverage option, in which you pay based on your location’s risk. If you’re in Southern California on the San Andreas fault line, your earthquake insurance costs will be much higher than if you’re in a lower risk area, far from any kind of fault line. 

The NAIC states “the deductible for earthquake insurance is usually 10%–20% of the coverage limit. For example, if your home is insured for $200,000, a 10% deductible would be $20,000.”

what isn’t covered with earthquake insurance

As we mentioned above, most homeowners insurance fails to cover earthquake damage. Earthquake insurance is recommended if you live in an area that has a high risk of experiencing an earthquake.  This coverage includes structures close to the house (i.e. a garage or shed).

As you look to invest in earthquake insurance, it’s important to understand where you may still need additional coverage.


Most items not covered under earthquake insurance, are surrounding what could occur after an earthquake occurs. For example:

  • Fires
  • Flooding
  • Vehicle damage

Damage to land is also not typically covered under your earthquake insurance. For example, if the earthquake caused a sinkhole to appear, that cost would not be covered by your earthquake insurance.

how your premium is determined

At the end of the day, your insurers determine your premium. There are a few factors that will impact your premium: 

  • Your home’s location
  • The age of your home
  • The construction of your home
  • The cost to rebuild your home
  • The deductible

How to stay protected

There are a few steps you can take to begin limiting the risk associated with earthquake damage to your business and your home, which can in turn lower your insurance premium.

earthquake survival kit

Start with an earthquake survival kit. Your office or home could be without electricity, internet, phone, water, gas, and sewage services when an earthquake hits. The American Red Cross gives a few items that should be included in your earthquake survival kit:

  • Water: A two week supply of a gallon per person
  • Food: Things that are non-perishable and easy to make
  • Flashlight
  • Battery-powered radio
  • Batteries
  • First Aid Kit
  • Any medications or medical items
  • Multi-purpose tools
  • Sanitation and personal hygiene items
  • Personal documents: Medication lists, medical information, address, lease or deed to your home, passports, birth certificates, insurance
  • Cell phones and chargers
  • Emergency contact information
  • Cash
  • Emergency Blanket
  • Map of the surrounding area

Inform staff and family

Host regular staff meetings to discuss how your team can stay safe during an earthquake. Be sure everyone knows to drop, cover, and hold during an earthquake and proceeding aftershocks. 

It’s important that they know that underneath furniture and against walls are likely the best places to be. Be sure to inform everyone to steer clear of windows and bookcases or large pieces of furniture. 

All frames, mirrors, and large cabinets should be anchored to their foundation. Gas appliances and water heaters should be secured with wall studs.

retrofitting your property

One of the best ways to tackle your earthquake risk is to retrofit your property. As mentioned above, it’s important to have large furniture anchored down, and secured in case an earthquake does occur. Here are a few ways to get started retrofitting your property to decrease your risk of injury during a natural disaster.

  • Bolting down bookcases, dressers, and televisions. Securing these heavy items, as well as other heavy items throughout your home can reduce property damage, and reduce the risk of injury during an earthquake.
  • Secure and brace the water heater to the dwelling frame.
  • Install automatic gas shut-off valves.

If you want to go even deeper into retrofitting your home, here are a few things you can do: 

  • Anchoring your house to the foundation through seismic bolting. 
  • Install bracing to cover cripple walls (in the space between the foundation and the floor where the crawl space is) with plywood. 

next steps

We at benchmark commercial insurance company can assist you in finding the right coverage for your specific business and personal needs. With insurance costs rising, it’s important to understand ways in which you can start to stabilize or reduce your insurance costs, read one of our recent blogs, here.

preparing for potential bottlenecks in your business and supply chain

preparing for potential bottlenecks in your business and supply chain

Are there red flags in your supply chain that may lead to bottlenecks? If there are, a bottleneck may impede product delivery in the new year, and that is not ideal. 

So, what can prevent potential bottlenecks before they damage your company’s ability to deliver? And what is a bottleneck? It can be complicated, so let’s dive into the details.

what is a bottleneck? 

A bottleneck can occur on all levels of manufacturing when resources are pushed past their maximum capacity. A bottleneck limits a company’s full potential, and is, of course, to be avoided.

As shown in the illustration below, the base of the bottle is overwhelmed and the neck of the bottle is too small for the demand of the supply chain. 

preparing for potential bottlenecks in your business and supply chain

Image courtesy of Chris Hohmann

As a manufacturer, there are five types of bottlenecks to be aware of: 

  • Poorly Designed Processes
  • Employee Absences
  • Overworked Machinery
  • No Automation
  • Poor Forecasting

These types of bottlenecks can be broken down into the categories of: People, Machines, and Processes.

people bottlenecks

employee absences

As mentioned above, human error is a part of the industry. One of the main factors of bottlenecks occurring is a high amount of employee absences. The processes that are set in place to avoid equipment failure are only as strong as the number of employees that are at work. With employee absences, there is a higher chance that small errors will occur.

If people are filling in roles out of desperation, then they are not well versed in the processes in place. One way to try and avoid this is to train employees on all of the roles involved in manufacturing, in case an employee is put into a position they’re not fully comfortable performing.  

machine bottlenecks

overworked machinery 

Just like people, if a machine is overworked, it will not be performing at its top level of productivity. If the machinery is overworked to meet the demand, there is a high risk of a bottleneck occurring.

Although the easier choice is to push machines to their maximum capacity (or further) in order to meet a deadline, this decision is asking for trouble.

process bottlenecks

lack of automation

We live in a world of technology.

In the manufacturing industry, technology should be used to help prevent bottlenecks. Automation is sometimes included in machinery or can be externally used. Regardless, there are benefits to using automation and technology in manufacturing.

Manufacturers have used automation not only to keep track of numbers but also to identify the physical location of machinery. Another benefit of automation is that with technology comes usable data. Data collection can be a huge tool in predicting future bottlenecks and learning from past mistakes.

Automation creates a smoother process of combining people and machinery.

poor forecasting

Although it’s true that some machine failures or bottlenecks are impossible to predict, poor forecasting can be a catalyst to missing major red flags that can disrupt your supply chain.

An example of poor forecasting is not maintaining structure in properly storing supplies and materials.

To use forecasting to your advantage, it’s helpful to predict when there might be increased demand. Then, make sure the right amount of inventory is available and that the machines can handle this level of demand to avoid a bottleneck.

poorly designed machine processes

If one part of the machine doesn’t work, the entire machine will most likely fail. If there are detailed processes laid out with preventative measures, however, there is a decreased chance of machine failure.

The efficiency of said processes can also be affected by human contact within the manufacturing line. Human error is common, so keeping employees up-to-date with understanding new machinery and processes is crucial in avoiding bottlenecks.

This includes:

  • Implementing preventative action to keep machinery up-to-date with industry standards
  • Not letting parts function beyond their lifespan

Along with preventive measures, there is value in training employees the proper response to a machine failure that resolves the situation quickly. This can prevent bottlenecks.

red flags in your supply chain

Is there a way to see where bottlenecks might occur? Well, aside from the processes mentioned above, acknowledging that there are red flags in manufacturing is crucial.

Some red flags in your supply chain may include: 

  • Unpredictable lead time
  • Internal reporting and delivery issues 
  • Slow product phase movement 
  • Not enough workers at one stage or another of production/ processing/ delivery 
  • Disorganized delivery scheduling 
  • Lack of product lifecycle tracking 

Identifying and addressing these red flags early on can help prevent bottlenecks. When it comes to equipment failure, however, sometimes a delay is inevitable. Read on for more on how to prepare.

how to prepare for equipment failure

There is not much that can be done if major equipment failure takes place. 

One key way to try and avoid equipment failure, however, is to create a diversified pool of vendors that you collaborate with. This means hiring locally, offshoring, and “near-shoring”. Doing so streamlines processes, provides backups and is one way to improve and balance your supply chain. 

what do I do after a bottleneck occurs?

So, you’ve experienced a bottleneck. What now? 

Bottlenecks have both short and long-term effects on a business.

After a bottleneck occurs, it’s important to evaluate what happened, why it happened, and how to avoid a similar situation in the future. The bottleneck you experience will help your company learn and grow when you look at it from the perspective of a learning opportunity.

So, you now know how to prevent a bottleneck—but do you know how to prevent a cyber-attack? Read on to learn why email may be your biggest cyber risk.

a day in the life of a benchmark broker

a day in the life of a benchmark broker

 

What does your insurance broker actually do for you? 

The daily tasks that a Benchmark insurance broker performs fall into the categories of:

  • Coverage analysis
  • Risk control
  • Hr services
  • Insure-tech

Here’s a deeper look into what the role looks like when it comes to commercial and personal insurance.

Client Communication

Like the old American proverb says, “To keep a customer demands as much skill as to win one.” 

Client communication is essential as an insurance broker in continuing a trust-filled relationship. One of the first steps a Benchmark insurance broker takes on during the day is taking client calls and emails and answering any concerns in a timely manner. 

This included us following up with any open items we need to complete underwriting or claim files. 

There are smaller questions that are easier to respond to, but sometimes a client emergency comes up, then industry advice is needed ASAP.

Client Emergencies

Benchmark insurance experienced this recently with Lyon & Associates Creative Services, Inc, who reported on their experience in a recent email describing their unfortunate “Pandemic Burglary.” 

Lyon & Associates Creative Services, Inc was out of office for three weeks during the pandemic back in March 2020. Then they fell under the healthcare communicators category and returned back to the office. 

“Our editing computers are largely empty shells, running the software alone. As a result of this structure, an early morning thief snatched all of our editing workstations.

When we reached out to our insurance broker, Carlsbad-based Benchmark Commercial Insurance, they took care of getting a claim opened with our insurer, Travelers.

Due to Benchmark’s previous good counsel, we had excellent replacement value and business interruption coverage. When the Travelers claim adjuster got in touch the same day, they had a significant starter check on the way before the weekend. 

Replacement value means exactly what it says, and then some, by the way. They covered things like the dozen new USC-C (Thunderbolt 3) to Thunderbolt 2 adapters we needed to keep our considerable investment in unstolen hard drives connected to the new computers. Of course, the claim was so well-covered that we exceeded their allowable percentage loss limit and they declined to renew our policy. (Chubb had our workers comp policy and they scooped us up with no increase in rates).” 

In any field of business, unpredictable events occur, so this can often take up time during the insurance broker’s day.  

Negotiation 

One task that generally occurs daily is negotiating with underwriters for best terms on new and renewal business quotes. 

Team Communication

Babe Ruth said “The way a team plays as a whole determines its a success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.”

Even though insurance is a tiny bit different from baseball, the same concept applies in the workforce. 

Communication within the Benchmark team is also crucial throughout the day. This can look like answering internal questions related to claims, billing, certificates, and underwriting. 

Coffee Breaks

Yes, a Benchmark insurance broker does require multiple coffee stops throughout the day— cappuccinos are preferred. 

Client Contracts

Another daily task is reviewing client contracts. The insurance world is constantly changing, so staying up-to-date is important for client communication. When reviewing client contracts, our broker will check to make sure that any insurance or indemnity-related contractual stipulations are consistent with the client’s coverage. 

This also included following up with claim adjusters on open claims on behalf of the broker’s clients and advocating on behalf of our clients to claim adjusters on difficult claims issues. 

Prospect Clients

Finding new clients that will be a match with Benchmark Commercial Insurance, and that we are a match for takes effort. Throughout the day a broker will field calls and emails from new business referrals and prospect call-ins. 

Policy Review

An insurance broker will perform policy reviews to make sure policies have been issued correctly. This includes policy reviews for prospects so they can understand how their current program integrates with the scope of their current operations, which exposes any gaps in coverage. 

A Benchmark insurance broker will also initiate, and continue to follow up on the underwriting status for all renewals 90-days in advance of the policy expiration date. 

Third-Party Communication

Keeping relationships with other companies is important to our brokers. This includes Zoom meetings with our marketing agency and promoting our excellent relationships with the underwriters who support us. 

Wondering why your insurance has skyrocketed this year? Find out the factors that might be directly impacting you on the Benchmark blog. 

can bigger insurance brokerages negotiate better rates than smaller ones?

can bigger insurance brokerages negotiate better rates than smaller ones?

At benchmark commercial insurance, we often get asked whether or not it’s better to work with a small brokerage or a large brokerage. While there are pros and cons to both, the pricing must remain the same from carriers. Hear from Benchmark’s own Peter Katkov, as he explains:

“I’m often asked the question, does the size of the agency impact the pricing of coverage received by a carrier? And the simple answer is no. There’s actually legislation that prohibits discriminatory pricing based on the size of the agency

So, based on identical underwriting information and for the same coverage, the quote provided to the small agency or to the biggest in the world must be identical. Obviously, there are pros and cons in being in both of those service environments. So, you have to ask yourself as the client, if the policy on the shelf is the same and costs the same; under which environment are my needs as a client best being met?”

Let’s dive a little deeper. 

The Pros and Cons of Small Insurance Brokerages

Pros

If you’re looking for an insurance brokerage that understands your community and your business’s unique needs, then a smaller brokerage might be a better choice. Smaller brokerages hire local agents, who will understand the property and area on a deeper level than a national agent. 

Another factor to consider when deciding between a small or large brokerage is how accessible their agents are to their clients. If you’re experiencing an emergency, you want a quick response from your broker about how to handle the situation. Smaller brokerages have actual people on the other line, helping you navigate the next steps while creating a trusting relationship.  

Small agencies likely have lower employee turnover, so the team you are working with is unlikely to change.

As you look for a brokerage that can meet your needs, larger insurance brokerages are unable to work with people or businesses with low credit, a history of claims, or are below premium thresholds. This is where smaller insurance brokerages could be a better fit. 

Cons

With a smaller brokerage, there may be some challenges with the number of national resources available. There exists a risk they may not be in business in the long run as compared to larger, more stable firms. This may put your own financial situation at risk if you need to find a new brokerage. 

With a small brokerage, you’re more likely to have the personal contact with your broker. This can lead to a more seamless customer service experience overall. 

The Pros and Cons of Large Insurance Brokerages

Pros

A large insurance brokerage is going to have a more consistent income from more team members and clients, which means that they are financially anchored. 

One of the largest pros to working with a larger insurance brokerage is technology and innovation. Larger brokerages are able to create apps to assist your business or personal insurance needs with ease. Whether that means making a claim or investing in new insurance policies.

Another advantage to a large brokerage is the customer service chat portals typically run 24/7. This is great for quick questions or emergency situations. There are multiple tools for quick access to information including apps, website chats, phone lines, and your typical email communication. 

Cons

There is a missing piece to the puzzle when it comes to large brokers. The personal touch. With a larger client base, things blend together between clients and brokers and may become hard to keep track of. Employee turnover leads to an ever-changing Rolodex of different contacts for each service need.

In the case of an emergency, you might find yourself endlessly chatting with a bot on the website chat line, compared to calling your personal broker who already knows your situation and doesn’t need a time-consuming update. 

Most importantly, however, is what motivates the decision-making of a large multi-national brokerage.  Publicly traded companies’ number one responsibility is to their shareholders, not their clients.

Insurance Carrier Pricing Requirements

As Peter mentioned above, there are laws and regulations that forbid discriminatory pricing based on the size of the agency.

According to the Federal Trade Commission:

A seller charging competing buyers different prices for the same “commodity” or discriminating in the provision of “allowances” — compensation for advertising and other services — may be violating the Robinson-Patman Act. This kind of price discrimination may give favored customers an edge in the market that has nothing to do with their superior efficiency. Price discriminations are generally lawful, particularly if they reflect the different costs of dealing with different buyers or are the result of a seller’s attempts to meet a competitor’s offering.”

In the insurance industry, pricing discrimination is considered ‘unlawful’,’ therefore small brokerages and large brokerages receive the same rates from carriers. 

What type of insurance brokerage is right for me?

At the end of the day, choosing your brokerage is largely impacted by your specific business needs. But here are some of the factors to consider when choosing a partner. 

Small

A small brokerage will be a good fit for you if you value the personal touch. This also could be the right option geographically, where there are specific exclusions or conditions to consider based on your location. Depending on your financial and claims history, a large brokerage might not consider you as an eligible client. 

Large

However, if your situation requires a lot of contact outside the normal work hours, then the 24/7 hotlines that most large brokerage firms have will be a needed resource to consider. There is also more adaptability due to the higher capital and amount of brokers that are working with a large firm.

Unsure about what you should be paying to insure your business? Check out this article explaining the different factors that contribute to the coverage costs of business insurance. 

“I’m often asked the question, does the size of the agency impact the pricing of coverage received by a carrier? And the simple answer is no. There’s actually legislation that prohibits discriminatory pricing based on the size of the agency.

So, based on identical underwriting information and for the same coverage, the quote provided to the small agency or to the biggest in the world must be identical. Obviously, there are pros and cons in being in both of those service environments, so you have to ask yourself as the client, if the policy on the shelf is the same and costs the same, under which environment are my needs as a client best being met?”

Let’s dive a little deeper. 

The Pros and Cons of Small Insurance Brokerages

Pros

If you’re looking for an insurance brokerage that understands your community and your business’s unique needs, then a smaller brokerage might be a better choice. Typically smaller brokerages are hiring local agents who will understand the property and area on a deeper level than a national agent. 

Another factor to consider when deciding between a small or large brokerage is how accessible their agents are to their clients. If you’re experiencing an emergency, you want a quick response from your broker about how to handle the situation. Generally, smaller brokerages have actual people on the other line, helping you navigate the next steps while creating a trusting relationship.  

Small agencies likely have lower employee turnover, so the team you are working with is unlikely to change with the breeze.

As you look for a brokerage that can meet your needs, oftentimes larger insurance brokerages are unable to work with people or businesses with low credit, a history of claims, or are below premium thresholds. This is where smaller insurance brokerages could be a better fit. 

Cons

With a smaller brokerage, there may be some challenges with the number of national resources available. With a smaller brokerage, there exists a risk they may not be in business in the long run as compared to larger, more stable firms. This may put your own financial situation at risk if you need to find a new brokerage. 

 

However, with a small brokerage, you’re more likely to have the personal contact of your broker, who knows everything about your insurance. This can lead to a more seamless customer service experience overall. 

The Pros and Cons of Large Insurance Brokerages

Pros

A large insurance brokerage is going to have a more consistent income from more team members and clients, which means that they are financially anchored. 

 

One of the largest pros to working with a larger insurance brokerage is technology and innovation. Larger brokerages are able to create apps to assist your business or personal insurance needs with ease. Whether that means making a claim, or investing in new insurance policies.

 

Another advantage to a large brokerage is the customer service chat portals typically run 24/7. This is great for quick questions or emergency situations. There are multiple tools for quick access to information including apps, website chats, phone lines and your typical email communication. 

Cons

There is a missing piece to the puzzle when it comes to large brokers. The personal touch. With a larger client base, things blend together between clients and brokers and may become hard to keep track of. Employee turnover leads to an ever-changing rolodex of different contacts for each service need.

 

In the case of an emergency, you might find yourself endlessly chatting with a bot on the website chat line, compared to calling your personal broker who already knows your situation and doesn’t need a time-consuming update. 

 

Most importantly however, is what motivates the decision making of a large multi-national brokerage.  Publicly traded companies’ number one responsibility is to their shareholders, not their clients.

 

Insurance Carrier Pricing Requirements

As Peter mentioned above, there are laws and regulations that forbid discriminatory pricing based on the size of the agency.

 

According to the Federal Trade Commission:

 

A seller charging competing buyers different prices for the same “commodity” or discriminating in the provision of “allowances” — compensation for advertising and other services — may be violating the Robinson-Patman Act. This kind of price discrimination may give favored customers an edge in the market that has nothing to do with their superior efficiency. Price discriminations are generally lawful, particularly if they reflect the different costs of dealing with different buyers or are the result of a seller’s attempts to meet a competitor’s offering.”

 

In the insurance industry, pricing discrimination is considered ‘unlawful’,’ therefore small brokerages and large brokerages receive the same rates from carriers. 

What type of insurance brokerage is right for me?

At the end of the day, choosing your brokerage is largely impacted by your specific business needs. But here are some of the factors to consider when choosing a partner. 

Small

A small brokerage will be a good fit for you if you value the personal touch. This also could be the right option geographically, where there are specific exclusions or conditions to consider based on your location. Depending on your financial and claims history, a large brokerage might not consider you as an eligible client. 

Large

However, if your situation requires a lot of contact outside the normal work hours, then the 24/7 hotlines that most large brokerage firms have will be a needed resource to consider. There is also more adaptability due to the higher capital and amount of brokers that are working with a large firm.

Unsure about what you should be paying to insure your business? Check out this article explaining the different factors that contribute to the coverage costs of business insurance. 

Cyber Security: Looking Forward to 2022

cyber security: looking forward to 2022

In July 2020, we all saw the ramifications of a well-performed hack. Twitter experienced the most catastrophic security breach in their company’s history. Elon Musk, Barack Obama, Joe Biden, Bill Gates, and other high-profile Twitter users were all among the hacked users.

This hack caused Twitter to shut down all verified blue-checked accounts. In just a few short hours, this breach of security cost Twitter users more than $118,000 and the company even more in their reputation.

This was more than three months ago. So, what does this mean looking to the new year? 

With most business and social interactions moving toward technology-centered avenues, this can be troubling for business owners. Some questions to keep in mind moving forward:

  • What will your company do if this happens to you? 
  • Did the global pandemic and stay-at-home orders make you more vulnerable to potential cyber-attacks? 
  • How can you protect yourself and your company? 
  • What cyber security regulations are being put in place for 2022? 

Let’s explore.

Consider Investing in Cyber Insurance 

Cyber insurance covers the expense incurred due to a data breach, virus, or other cyber-attacks and fraud. It can also cover legal claims that come from a security breach. As companies utilize cloud software, personal computers and laptops, and other technology-based means to store their sensitive data, their risk for a security breach grows exponentially.

The Identity Theft Resource Center claims that in 2018 businesses experienced 571 breaches in security, which exposed 415 million employee and customer records. 

When you do experience a breach as a company, federal law requires you to perform an extensive list of to-dos. If you have cyber insurance coverage, however, your carrier will take that responsibility on.

2022 Changes

The United Nations (UN) provides information about their role in upcoming cyber attacks. One of the main adjustments for the future is the role that automated systems play in cars. Your Tesla could be a risk moving forward (the report highlights passenger cars, vans, trucks, and buses).

The higher risk associated with “connected” cars is another reason cyber security is crucial moving into 2022.

How Has Your Business Become More Vulnerable?

As businesses moved to a new work-from-home model, cyberattacks increased. With most company communication done through e-mail, Slack, and other online platforms, the risk of a breach increases. This could cause a company to experience massive monetary loss as well as reputation damage. 

Signs You’re at Risk of a Experiencing a Cyber Attack

  • You’re receiving requests for transactions, like direct deposits or electronic fund transfers
  • Unsolicited communications are coming through from unknown companies or people
  • Links within the email do not match—check links by rolling your cursor over the link to see if the two match with the content and the email address!
  • Requests with a high sense of urgency, asking you to complete documentation immediately
  • Requests for usernames, passwords, and other personal details like banking information

What Can You Do to Help Mitigate This Risk?

  • Limit your use of large email attachments and programs that put pressure on your company’s bandwidth ecosystems
  • Do not forward emails with attachments that contain highly restricted or company confidential information to personal accounts
  • Avoid reading, talking about, or leaving confidential information in unsecured work-from-home areas
  • Log-off of work devices when you’re not using them
  • Shred sensitive documents
  • Restart your computer regularly

These tips along with the added security of cyber insurance should prepare your business for potential cybersecurity breaches. Learn more about how cyber insurance can help your company today. Contact us at Benchmark to see how we can partner.

And if you’re wondering why your insurance premiums have skyrocketed recently, learn why here.

 

Cyber Security Coverage in the Age of Ransomware

cyber liability

why email may be your biggest cyber risk

why email may be your biggest cyber risk

When you hear the word “cyber risk,” what do you think of?

If you think of Facebook or strangers sending sketchy links over text, you’re not alone. But, you are wrong.

In 2019, The FBI’s Internet Crime Complaint Center (IC3) reported that the losses for business email scams was $1.7 billion. So, your email might be your biggest cyber risk, what does that mean for you? Let’s break it down. 

BEC Scam 

The FBI defines a Business Email Compromise (BEC) scam as, “Also known as email account compromise (EAC) — is one of the most financially damaging online crimes. It exploits the fact that so many of us rely on email to conduct business— both personal and professional.” 

They also list what BEC scams can often look like: 

  • “A vendor your company regularly deals with sends an invoice with an updated mailing address
  • A company CEO asks her assistant to purchase dozens of gift cards to send out at employee rewards. She asks for the serial numbers so she can email them out right away. 
  • A homeowner receives a message from his title company with instructions on how to wire his down payment.” 

The listed scenarios were all fake, and cost companies thousands (sometimes hundreds of thousands) of dollars. 

The rise in Cyber Security breaches has jump-started many companies into investing in cyber security insurance. This is a great way to protect yourself and your company, but there are preventative measures that can be taken. 

How to Avoid BEC or EAC Scams

There are some steps you can implement to avoid the financial downfall of a cyber attack. 

Company Policy

Set clear policies about what should be responded to within the company email. This also implies that the company email is not used for general things (for example, signing up for a clothing discount). Within company policy, there should be a rule for not sending personal passwords or information over email. 

Social Media

Social media has changed what a company might share with the world. The information that is shared with the public can be informative about the industry, but should NOT be stating that the whole company is out of the office for a day off. 

Employee Knowledge

Train your employees to look out for red flags in their inboxes. This could look like anything from emails from outside the company, to emails asking for personal information. Emails can be included in a broad cyber security training, considering their high-risk factor. 

Has the recent rain caused any alarm for flooding at your commercial property? Learn more about the surface water exclusion that is most likely a part of your property insurance. 

How to Stabilize or Reduce Your Insurance Costs

how to stabilize or reduce your insurance costs

Insurance costs are high. There’s no denying it. If your broker didn’t reach out to forewarn you, you likely had a shock when you opened your most recent insurance bill.

Is there anything a business owner can do to reduce those high coverage costs?

Yes, let’s review some of the options.

As a commercial business, the looming year of higher premiums and the unknown can be daunting. However, there are ways to reduce your insurance costs and take proactive steps.

Pay Attention to your Risk Profile 

Your risk profile can be a collection of factors including: 

  • Who you hire
  • How many steps are in place to protect your data
  • Whether or not your employee lists are accurate for insurance
  • Your overall security precautions

These are all small factors that influence your risk profile. Keeping an eye on them can, in turn, avoid long-term costs.

HR Handbooks 

Avoiding a flood of claims helps your reputation and bottom line. Investing in Employment Practices Liability Insurance (EPLI) is crucial to protecting your business, however, it can be costly.

An HR handbook can be an active document that provides guidance for employers and employees as a way for your company to stay protected outside of EPLI insurance.

Your handbook can cover topics such as: 

  • Password Policy
  • VPNs
  • Safety Policies and Procedures
  • Intellectual Property

Evaluate Policies Annually

Policies are bound to change in the next year, so keeping a close eye on ones that pertain to commercial insurance will prevent future risk (and future costs).

As your business evolves throughout the months and years, it is important to check in with your Risk Management consultant. In addition, the landscape of legislation is ever-changing in California.

For example, Proposition 22 in California has been ruled unconstitutional, so there may be some changes in the hiring process for W-2 employees vs. 1099 workers.

Do you know why your insurance prices have increased this year? Check out our recent blog post explaining what exactly is going on.

Tax Codes

changes in tax codes – what you need to know

Tax changes are coming. 

Have you prepared for the changes that may begin at the end of the year? If you haven’t started thinking about it already, it’s about that time.

Here are a few of the proposed changes that are looking to go into effect starting next year. 

Income Tax Changes

 

Your tax liability might be at risk to change, although it all depends on your current financial situation. Some of the main changes will affect your bottom line. For example, if your income exceeds $400,000, then you are likely to be impacted.

Along with higher tax rates, itemized deductions will also be prevalent in tax code changes. The proposed changes include a $10,000 limit on local and state taxes. 

Carried Interest Tax Changes

The last time carried interest tax changes were drastically changed was in 2017. It looks like there will be more change coming. Some lawmakers introduced the “Carried Interest Fairness Act of 2021” which if passed, would “tax carried interest at ordinary income tax rates and treat it as wages subject to employment taxes.” 

Capital Gains Tax Changes

The proposed changes would increase the applicable tax to a higher marginal income rate. This would conclude with the total being 43.4% on long-term capital gains. 

Estate & Gift Tax Changes

President Biden has proposed that the current Estate & Tax Changes that are meant to extend until 2026 be looked at closely. 

How to know if these tax changes will affect you?

If you are a business owner or individual whose income is above $400,000 then odds are you will be affected by these tax changes. 

Increased tax rates will mean it’s hard to know how much you’re paying to insure your business. Learn what the general costs are for your business.  READ ON…