It only makes sense that the people closest to any given situation have the best ability to control it, protect it, or maintain it.  By that same logic, those same frontline people have the most riding on the ongoing safety of any variables impacting that situation.

Managing risk effectively, in other words, stands the best chance when those closest to the potential for risk take responsibility for it.  In the business world, this concept goes by the term contractual risk transfer.

This represents a legally binding way to transfer risk to the party that may be in the best position to control the risks related to the service to be provided.  It involves the use of contractual obligations, such as indemnity and exculpatory agreements, waivers of recovery rights, and “hold harmless” insurance requirements that pass along to others what would otherwise be one’s own risks of loss.

Most often, it means transferring the risk of injury or property damage caused by a company you hired – a subcontractor, vendor, or supplier, for instance – through a contract or insurance policy.  Say, for example, a commercial property tenant assumes the risk for keeping sidewalks clear, or an apartment complex transfers the risk of theft to a security company, or a subcontractor assumes the risk for work performed for a contractor on a property.

Contractual risk transfer actually benefits all parties involved.  The primary party can take comfort that the secondary party – the subcontractor or vendor – will carry out its responsibilities, since it has accepted responsibility for the risk.  Entering into these risk transfer agreements can also lower the cost of insurance for the primary party.

At the same time, the secondary party can benefit from agreeing to contractual risk transfers because it opens the door to increased business relationships and revenues – while also helping to ensure that its employees are well trained, diligent, and responsible.

The professionals at The Reschini Group can help you determine the viability, advantages, and details of entering into contractual risk transfer agreements, to put the responsibility of risk where it makes the most sense.  Contact them to learn more.

Copyright 2024 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

The start of a new year is a good time to analyze where your business is and how you can refresh it. Here’s a checklist that will help you do just that. What are some changes you can make that will help you and your business start off right in 2024?

The impact of extreme winter weather events on businesses can be devastating, resulting in major building damage, lost production and sales, and utility disruptions – just to name a few. Are you prepared for winter weather?  Click on the images to download or print these free resources for businesses to assess winter risks and know what steps to take before, during, and after a winter weather event.

Halloween is approaching, and the next few days will be filled with many festivities, including trick-or-treating, pumpkin carving, and other fun activities. Click on the image to download or print our Halloween Safety for Children Tips and have a fun and safe holiday!

September is National Preparedness Month. Although it’s not pleasant to think about, a natural disaster could occur at any time, and it is essential to create a plan and prepare for an emergency. Your preparation now could save a life later. Click on the image to download or print the safety sheet.

Cyberattacks and the resulting data breaches represent significant risks, both financial and reputational, to businesses, with insurance industry estimates stating that the $3 trillion price tag currently could balloon to $5 trillion in 2024. Those figures include lost income and the payment of data breach-related regulatory fines.

According to the Insurance Information Institute*, cost-effective options exist to avoid falling victim to cyberattacks, such as:

1. Understand your cyber risks. Businesses are vulnerable to cyberattacks through hacking, phishing, malware, and other methods. 
2. Train your staff. Those engaged in cyberattacks find a point of entry into a business’ systems and network. A business’ exposure can be reduced by having and enforcing a computer password policy for its employees.
3. Keep software updated. Businesses should routinely check and upgrade the major software they use.
4. Create back-up files and store them off-site. A business’ files should be backed up either to an external hard drive or on a separate cloud account. Taking these steps are vital to data recovery and the prevention of ransomware. 
5. Maintain firewall and antivirus technology. A business should evaluate the security settings on its software, browser and email programs.
6. Establish a Data Breach Plan. A business should remind its employees to review periodically the data breach detection tools installed onto their computers. If a data breach occurs, employees must notify the business immediately to prevent further loss.
7. Secure insurance coverage to address cyber risks. Cyber insurance coverage typically provides protection for costs associated with data breaches and ransomware.  

The threat of cyberattack never goes away, so neither should your defenses against it.  Contact the professionals at The Reschini Group to learn more and take the appropriate steps to protect your business interests.

https://www.iii.org/press-release/is-your-business-cyber-resilient-iii-offers-7-ways-businesses-can-reduce-their-risks-100819

Copyright 2023 Evergreen Insurance

Evergreen Insurance provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

“Here today, gone tomorrow.”  An old familiar phrase, but never a welcome one when it pertains to a business.  But should the worst happen, an option to keep your business on its feet is readily available.

Business interruption insurance helps businesses protect against monetary losses due to periods of suspended operations when a covered event, such as a fire, occurs and causes physical property damage.  The coverage allows businesses to pay fixed expenses, including costs incurred while operating at an offsite location, while the property is closed for repairs and restoration.  Policies also reimburse owners for lost revenue that would have otherwise been earned if the business remained open. 

Business interruption coverages are typically bundled within a businessowner’s policy (BOP), a commercial package that includes business property and liability coverages or a standalone Commercial Property policy.  Most insurers offer this coverage feature for accounts that they are willing to insure. 

According to the Federal Emergency Management Agency (FEMA), about 25% of businesses fail to reopen after a disaster strikes, making business interruption coverage even more critical for the long-term survival of an enterprise.  While commercial property insurance pays for actual physical damages or losses, a business interruption policy covers lost net income due to the closure of the business while repairs are underway, as well as offering coverage for rent or lease payments, relocation costs, employee wages, taxes, and loan payments.  Exclusions from coverage include losses unrelated to property damage, such as lost revenues due to viral outbreaks or pandemics.

Business interruption policies may contain a clause for civil authority coverage, as well, meaning that if a state, local, or federal government entity prohibits access to the business premises, thereby forcing the business to temporarily close, this clause in the business interruption insurance may cover lost income. 

Should a calamity strike, you certainly want to be able to say about your business, “Here today, still here tomorrow.”  Business interruption coverage holds the key.  Contact the professionals at Evergreen Insurance to learn more and determine the right plan for your business.

https://content.naic.org/cipr-topics/business-interruptionbusinessowners-policies-bop

Copyright 2023 Evergreen Insurance

Evergreen Insurance provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.