Inside scoop!
My Article soon to be in the Chamber of Commerce Business Matters Magazine has been release onto my Facebook page:
Click here to see it for yourself.
Wednesday, 22 June 2011
Wednesday, 15 June 2011
Sizzling Insurance Tips for Restaurants and Bars
What kind of insurance do restaurants need?
Restaurants have unique risks that create some interesting exposures. Depending on the size and services a restaurant may offer, there are different insurance products that the restaurant may consider purchasing.
General Liability
If a customer trips and falls or even if a customer spills hot coffee on herself (review of famous McDonald's case here); liability insurance would pay for such a claim. Other claims include: choking, food poisoning, burns, etc.
Quick savings tip: To save on restaurant liability insurance, it's possible to find companies that rate on square footage instead of sales. If you are a smaller restaurant that has a high volume of sales, then you could be paying too much.
Property Insurance
This is insurance for your equipment, improvements, and building if you own it. If you are a tenant, then you need to review your lease to see what you are responsible for in case of a loss. For example, maybe the last tenant installed a kitchen, but the lease may still state that the only thing the owner is responsible for is the four outside walls. If there is a total loss, you will have to pay to create an entirely new kitchen.
Quick savings tip: It is often less expensive to rate tenant improvements and restaurant equipment (anything bolted down) separately from business personal property. That way you get the building rate instead of the rate for the things that can be stolen easily.
Business Income
If your restaurant has to shut down due to a fire or a covered loss, you need this coverage to cover your costs and to pay you what you would have made (minus expenses that you don't incur during the loss such as payroll). It's important to have at least 12 months coverage, but 18 or 24 months is ideal. In case of a total loss, you may need to wait for building permits, construction delays, and negotiations with the insurance companies to be settled. For more info on this business interruption, see this blog I wrote on it.
Quick tip: Watch out for long delays in getting paid. Often policies will include a 72 hour waiting period before this coverage can take affect. Can you afford to lose three days of business? What if that's a Friday or Saturday night?
Workers' Compensation
This coverage is mandated by California law, meaning you have to buy it even if you only have one employee. The premium is a percentage of total payroll. Restaurant premiums are currently between 2% - 6% based on the size, loss experience, and other discount factors. Click here for more information on workers' comp.
Quick savings tip: In California tips are excluded from workers' compensation, so make sure you don't add them to your payroll report.
Stay tuned for my next blog that will highlight some more advanced coverage for restaurants. Here are some examples of some other coverages that restaurants should think about including: sexual harassment, assault and battery, delivery driver coverage, and more.
Restaurants have unique risks that create some interesting exposures. Depending on the size and services a restaurant may offer, there are different insurance products that the restaurant may consider purchasing.
General Liability
If a customer trips and falls or even if a customer spills hot coffee on herself (review of famous McDonald's case here); liability insurance would pay for such a claim. Other claims include: choking, food poisoning, burns, etc.
Quick savings tip: To save on restaurant liability insurance, it's possible to find companies that rate on square footage instead of sales. If you are a smaller restaurant that has a high volume of sales, then you could be paying too much.
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| Don't let restaurant insurance upset your stomach |
Property Insurance
This is insurance for your equipment, improvements, and building if you own it. If you are a tenant, then you need to review your lease to see what you are responsible for in case of a loss. For example, maybe the last tenant installed a kitchen, but the lease may still state that the only thing the owner is responsible for is the four outside walls. If there is a total loss, you will have to pay to create an entirely new kitchen.
Quick savings tip: It is often less expensive to rate tenant improvements and restaurant equipment (anything bolted down) separately from business personal property. That way you get the building rate instead of the rate for the things that can be stolen easily.
Business Income
If your restaurant has to shut down due to a fire or a covered loss, you need this coverage to cover your costs and to pay you what you would have made (minus expenses that you don't incur during the loss such as payroll). It's important to have at least 12 months coverage, but 18 or 24 months is ideal. In case of a total loss, you may need to wait for building permits, construction delays, and negotiations with the insurance companies to be settled. For more info on this business interruption, see this blog I wrote on it.
Quick tip: Watch out for long delays in getting paid. Often policies will include a 72 hour waiting period before this coverage can take affect. Can you afford to lose three days of business? What if that's a Friday or Saturday night?
Workers' Compensation
This coverage is mandated by California law, meaning you have to buy it even if you only have one employee. The premium is a percentage of total payroll. Restaurant premiums are currently between 2% - 6% based on the size, loss experience, and other discount factors. Click here for more information on workers' comp.
Quick savings tip: In California tips are excluded from workers' compensation, so make sure you don't add them to your payroll report.
Stay tuned for my next blog that will highlight some more advanced coverage for restaurants. Here are some examples of some other coverages that restaurants should think about including: sexual harassment, assault and battery, delivery driver coverage, and more.
Friday, 10 June 2011
Fleet Management - What is your duty of care?
Introduction
Regardless of how many vehicles you operate there are a number of pieces of legislation that govern road safety, including the various road traffic acts and regulations supported by the Highway Code. In addition there are a number of related statutes that are intended to safeguard road-users, these include regulations covering the construction and use of vehicles, special health and safety legislation, regulations covering the carriage of dangerous goods by road.
The main responsibilities imposed by this legal framework, falls on the shoulders of road users and vehicle owners.
It is important to note that the vehicle is considered to be a place of work.
The main responsibilities under the road traffic acts are towards the driver of the vehicle. He is responsible for driving a safe vehicle, adequately maintained and insured, in a safe manner having due regard to other road users and pedestrians. The employer has a duty towards providing a safe vehicle and insurance if the vehicle is owned by the employer.
Under employment law the employer has a duty towards the employee and members of the public who may be affected by his work activities. The employer is also "vicariously liable" for the acts of his employees. The employee has a duty to comply with legislation etc.
Because of his status as an employer, an employer is liable for the injuries or death negligently caused by one employee to another, or to a worker from another company on his premises or to a member of the public injured by his employee.
Where the employee drives recklessly or breaks speed limits it is the drivers' responsibility. Where speeding was due to inappropriate scheduling of appointments by the employer, liability could be joint, i.e. they could both be prosecuted.
As previously mentioned, employers have a responsibility to manage Health & Safety. There need to be policies, procedures and ‘safe systems of work' in place that reduce work related risks, including the on-the-road activities of employees, so it is vital that risks arising from the fleet of motor vehicles are properly managed.
Risk management is all about common sense. You look at what might happen, assess the impact of potentially damaging events and take steps to prevent the worst from arising. Managing a fleet of vehicles is no different.
When vehicles are being used or driven on the highway by persons working for an employer under a contract of employment, the employer has duties of care, which are responsibilities under the Health & Safety at Work Act 1974 and also they have a common law duty of care. This means that under this ‘duty of care' an employer must take reasonable care to protect employees from the risk of foreseeable injury, disease or death whilst they are at work.
Key Action Points
•Carry out a Risk Assessment
•Produce a Health and Safety Policy, which includes your procedures to manage driver safety
•Ensure all licences are checked at least annually
•Regularly record maintenance and servicing details
•Record all training that has been completed
Ensure that all of the above measures include any private vehicles and drivers used on or in connection with the company's business activities
There are three key areas for risk management that you need to give attention to:
Driver
•Driver vetting and selection
•Induction procedures
•Licence checks
•Accident reporting procedures
Vehicle
•Vehicle suitability
•Vehicle maintenance and inspections
•Vehicle security
Journey
•Journey planning
•Managing driver fatigue
•Speed management
•Journey type
The Health and Safety Executive (HSE) have published guidance for employees on managing occupational road risk.
Persons found guilty of breaches of road traffic law can be subject to a wide range of penalties including prison for serious offences. Breaches of Health & Safety Law may result in fines or imprisonment.
Directors may be liable if it can be shown that their negligence contributed directly to an injury.
Corporate Killing
A criminal offence of corporate manslaughter has now been introduced, making it easier to prosecute companies responsible for fatal accidents.
The offence will apply when someone has been killed because senior management "grossly fails to take reasonable care for the safety of employees or others".
The maximum penalty will be an unlimited fine, as well as compulsory ‘Publicity Orders' a process in which the guilty company will be directed by the courts to publicise their shortcomings, highlighting to all the extent to which they were guilty of neglect. This could be catastrophic to business reputation and moral.
The employer responsibility also extends to ensuring that private vehicles used by employees on "Company Business" are also operated in a lawful manner. Checks by the employer should include the vehicles mechanical fitness i.e. MOT test (if over 3 years old for cars), services and maintenance records and regular vehicle condition reports.
They must ensure that the driver has "business use" insurance cover and that the driver is suitably licenced to drive that vehicle.
References
The Highway Code
The Health and Safety Executive (HSE)
Health and Safety at work etc Act 1974
The Stationery Office 1974 ISBN 0 10 543774 3
The Management of Health and Safety at Work Regulations 1999
The Stationery Office ISBN 0 11 085625 2
Regardless of how many vehicles you operate there are a number of pieces of legislation that govern road safety, including the various road traffic acts and regulations supported by the Highway Code. In addition there are a number of related statutes that are intended to safeguard road-users, these include regulations covering the construction and use of vehicles, special health and safety legislation, regulations covering the carriage of dangerous goods by road.
The main responsibilities imposed by this legal framework, falls on the shoulders of road users and vehicle owners.
It is important to note that the vehicle is considered to be a place of work.
The main responsibilities under the road traffic acts are towards the driver of the vehicle. He is responsible for driving a safe vehicle, adequately maintained and insured, in a safe manner having due regard to other road users and pedestrians. The employer has a duty towards providing a safe vehicle and insurance if the vehicle is owned by the employer.
Under employment law the employer has a duty towards the employee and members of the public who may be affected by his work activities. The employer is also "vicariously liable" for the acts of his employees. The employee has a duty to comply with legislation etc.
Because of his status as an employer, an employer is liable for the injuries or death negligently caused by one employee to another, or to a worker from another company on his premises or to a member of the public injured by his employee.
Where the employee drives recklessly or breaks speed limits it is the drivers' responsibility. Where speeding was due to inappropriate scheduling of appointments by the employer, liability could be joint, i.e. they could both be prosecuted.
As previously mentioned, employers have a responsibility to manage Health & Safety. There need to be policies, procedures and ‘safe systems of work' in place that reduce work related risks, including the on-the-road activities of employees, so it is vital that risks arising from the fleet of motor vehicles are properly managed.
Risk management is all about common sense. You look at what might happen, assess the impact of potentially damaging events and take steps to prevent the worst from arising. Managing a fleet of vehicles is no different.
When vehicles are being used or driven on the highway by persons working for an employer under a contract of employment, the employer has duties of care, which are responsibilities under the Health & Safety at Work Act 1974 and also they have a common law duty of care. This means that under this ‘duty of care' an employer must take reasonable care to protect employees from the risk of foreseeable injury, disease or death whilst they are at work.
Key Action Points
•Carry out a Risk Assessment
•Produce a Health and Safety Policy, which includes your procedures to manage driver safety
•Ensure all licences are checked at least annually
•Regularly record maintenance and servicing details
•Record all training that has been completed
Ensure that all of the above measures include any private vehicles and drivers used on or in connection with the company's business activities
There are three key areas for risk management that you need to give attention to:
Driver
•Driver vetting and selection
•Induction procedures
•Licence checks
•Accident reporting procedures
Vehicle
•Vehicle suitability
•Vehicle maintenance and inspections
•Vehicle security
Journey
•Journey planning
•Managing driver fatigue
•Speed management
•Journey type
The Health and Safety Executive (HSE) have published guidance for employees on managing occupational road risk.
Persons found guilty of breaches of road traffic law can be subject to a wide range of penalties including prison for serious offences. Breaches of Health & Safety Law may result in fines or imprisonment.
Directors may be liable if it can be shown that their negligence contributed directly to an injury.
Corporate Killing
A criminal offence of corporate manslaughter has now been introduced, making it easier to prosecute companies responsible for fatal accidents.
The offence will apply when someone has been killed because senior management "grossly fails to take reasonable care for the safety of employees or others".
The maximum penalty will be an unlimited fine, as well as compulsory ‘Publicity Orders' a process in which the guilty company will be directed by the courts to publicise their shortcomings, highlighting to all the extent to which they were guilty of neglect. This could be catastrophic to business reputation and moral.
The employer responsibility also extends to ensuring that private vehicles used by employees on "Company Business" are also operated in a lawful manner. Checks by the employer should include the vehicles mechanical fitness i.e. MOT test (if over 3 years old for cars), services and maintenance records and regular vehicle condition reports.
They must ensure that the driver has "business use" insurance cover and that the driver is suitably licenced to drive that vehicle.
References
The Highway Code
The Health and Safety Executive (HSE)
Health and Safety at work etc Act 1974
The Stationery Office 1974 ISBN 0 10 543774 3
The Management of Health and Safety at Work Regulations 1999
The Stationery Office ISBN 0 11 085625 2
Directors & Officers Liability Insurance
What is Directors and Officers Liability Insurance?
Directors and Officers Liability Insurance cover protects companies’ directors, officers and senior managers against claims arising from their decisions and actions taken whilst managing their business.
What are a Director’s Responsibilities?
The duties of a director have been established through statutes, regulations and case law in the following areas:
Duty of Care and Skill
This is a common law duty requiring Directors to act with ‘the care an ordinary man would take in the same circumstances on his own behalf’ and with the skill expected from someone with his ‘particular knowledge and experience’. Where duties are delegated the Director must ensure that the person to whom the duties are delegated is sufficiently experienced/reliable/honest.
Fiduciary Duty
Directors must act honestly, in good faith and in the best interest of the company and must ensure that he does not have any conflict of interest.
Statutory Duty
There are many statutes that affect the conduct of Directors and Officers including the Companies Act 1985, Insolvency Act 1986, Financial Services Act 1986, Environmental Protection Act 1990, Health and Safety at Work Act 1974, to name but a few.
How Can Claims Arise?
If a Director is perceived to have failed in any of his duties then a claim could come from any one of a number of third parties including:
Creditors
Liquidators
Government and Regulatory bodies
Customers/Suppliers
Employees
Auditors
Why Buy Directors and Officers Liability Insurance?
In a claim situation the Director’s personal assets are at risk. Directors cannot rely on the company indemnifying them. Often such an indemnity from the company will be in contravention of the Companies Act. Regardless of the stipulations of the Companies Act in the event of insolvency there will be no prospect of the company indemnifying the Directors and Officers.
The Directors and Officers Liability Insurance Policy will pay on behalf of the Director his legal costs and expenses and any civil damages awarded against him.
Typical Claims Scenarios
Liquidation – Following bankruptcy the Directors are accused of wrongful trading by the Department of Trade and Industry.
Environmental – Following spillage of a pollutant proceedings are brought by the Environment Agency against the Directors.
Health and Safety – Following a fatal accident involving breaches of Health and Safety procedures, the Managing Director is identified as being the ‘Controlling mind and will’ of the Company, and is therefore prosecuted for Corporate Manslaughter.
Employment Practices – An employee takes action against a supervisor for harassment and discrimination.
Actual Claims
1) A manufacturer’s cooling systems became contaminated resulting in several employees contracting Legionnaires disease. The MD was accused of negligently failing to implement the correct maintenance procedures and prosecuted for Corporate Manslaughter. The director's legal costs amounted to several hundred thousand £s which were paid by the D&O policy.
2) Following the insolvency of a furniture company charges were brought against two directors alleging Wrongful Trading. Although charges were ultimately dropped substantial legal defence costs had already been incurred and paid for by the D&O policy.
The Changing Environment
Some Points to Consider:
• Regulation is increasing
• There is a greater awareness on the part of third parties of the duties and responsibilities of a Director
• Shareholders and other third parties are becoming more aware of their rights
• Lawyers are now able to act on behalf of plaintiffs on a no win no fee basis.
Directors and Officers Liability Insurance cover protects companies’ directors, officers and senior managers against claims arising from their decisions and actions taken whilst managing their business.
What are a Director’s Responsibilities?
The duties of a director have been established through statutes, regulations and case law in the following areas:
Duty of Care and Skill
This is a common law duty requiring Directors to act with ‘the care an ordinary man would take in the same circumstances on his own behalf’ and with the skill expected from someone with his ‘particular knowledge and experience’. Where duties are delegated the Director must ensure that the person to whom the duties are delegated is sufficiently experienced/reliable/honest.
Fiduciary Duty
Directors must act honestly, in good faith and in the best interest of the company and must ensure that he does not have any conflict of interest.
Statutory Duty
There are many statutes that affect the conduct of Directors and Officers including the Companies Act 1985, Insolvency Act 1986, Financial Services Act 1986, Environmental Protection Act 1990, Health and Safety at Work Act 1974, to name but a few.
How Can Claims Arise?
If a Director is perceived to have failed in any of his duties then a claim could come from any one of a number of third parties including:
Creditors
Liquidators
Government and Regulatory bodies
Customers/Suppliers
Employees
Auditors
Why Buy Directors and Officers Liability Insurance?
In a claim situation the Director’s personal assets are at risk. Directors cannot rely on the company indemnifying them. Often such an indemnity from the company will be in contravention of the Companies Act. Regardless of the stipulations of the Companies Act in the event of insolvency there will be no prospect of the company indemnifying the Directors and Officers.
The Directors and Officers Liability Insurance Policy will pay on behalf of the Director his legal costs and expenses and any civil damages awarded against him.
Typical Claims Scenarios
Liquidation – Following bankruptcy the Directors are accused of wrongful trading by the Department of Trade and Industry.
Environmental – Following spillage of a pollutant proceedings are brought by the Environment Agency against the Directors.
Health and Safety – Following a fatal accident involving breaches of Health and Safety procedures, the Managing Director is identified as being the ‘Controlling mind and will’ of the Company, and is therefore prosecuted for Corporate Manslaughter.
Employment Practices – An employee takes action against a supervisor for harassment and discrimination.
Actual Claims
1) A manufacturer’s cooling systems became contaminated resulting in several employees contracting Legionnaires disease. The MD was accused of negligently failing to implement the correct maintenance procedures and prosecuted for Corporate Manslaughter. The director's legal costs amounted to several hundred thousand £s which were paid by the D&O policy.
2) Following the insolvency of a furniture company charges were brought against two directors alleging Wrongful Trading. Although charges were ultimately dropped substantial legal defence costs had already been incurred and paid for by the D&O policy.
The Changing Environment
Some Points to Consider:
• Regulation is increasing
• There is a greater awareness on the part of third parties of the duties and responsibilities of a Director
• Shareholders and other third parties are becoming more aware of their rights
• Lawyers are now able to act on behalf of plaintiffs on a no win no fee basis.
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