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February 23, 2021
The coronavirus pandemic of 2020 continues to create outsized impacts on the business world. Companies of every size and type have been affected, and millions of people have lost their jobs. Still, the economy has kept going, with companies balancing employee safety with the necessity of remaining open for business. Essential workers, such as those in retail, food service, healthcare, and first response, face increased risks of contracting COVID-19. Workers’ compensation insurance policies may be utilized to provide financial relief for those affected by the disease. How has COVID-19 affected workers’ compensation, and what can companies do to mitigate their risks?
Dire Predictions Unrealized
Insurance experts from around the world began predicting a hardening of the workers’ compensation market in the wake of COVID-19. The expectation was that essential workers would overwhelm these policies with claims as they became infected in the workplace.
The National Council on Compensation Insurance (NCCI) analyzed potential impacts of COVID-19 claims on employers by running several scenarios. The financial picture revealed by the analysis is alarming, with loss rates in excess of three times current rates and an estimated $81 billion in losses if the worst-case scenario in the study is realized. In another scenario run by the NCCI, five percent the first responders and healthcare personnel who were eligible for workers’ compensation benefits became ill from COVID-19. In this scenario, if only 60% of the resulting claims were paid, employers could expect cost increases of $2 billion.
Thankfully, these grim scenarios have not manifested themselves. Although an increase in COVID-related claims was experienced, they were greatly outpaced by a significant decline of claims arising from a wide range of occupational injuries and illnesses. As a result, the workers’ comp market remains healthy and competitive.
Uncertainties Remain in the Workers’ Compensation Market
For years, the workers’ compensation market has experienced substantial growth. That growth trend shifted in late 2019 and into the early part of 2020. The market began to harden amidst this shift, attributed to factors including low interest rates, market surpluses, and an increase in both the severity and frequency of workers’ comp claims.
Premium volumes have decreased by as much as 20% in 2020, and industry analysts expect a lag of one to two years before the market resumes growth. Uncertainties remain in the market, however, as states implement regulations regarding the compensability or eligibility of workers to claim workplace infections from COVID-19. Insurance analysts also warn against an increase in fraudulent claims and recommend that every COVID-19 infection claim is thoroughly vetted.
Minimizing COVID-19 Claims Experiences
What can employers do to manage workers’ compensation claims arising from COVID-19? There are several risk management solutions. First, employers must carefully review their existing workers’ comp coverage to gain an understanding of what is and is not covered. If coverage gaps are revealed during review, alternative insurance plans like unemployment insurance or temporary disability insurance may be available.
Next, protecting employees in the workplace remains the most effective means of curtailing COVID claims. Employees should be provided personal protective equipment such as gloves and masks, especially if they work in frequent/close contact with customers. Social distancing recommendations from the Centers for Disease Control and Prevention (CDC) should also be followed. If possible, minimizing building capacities and avoiding group gatherings in the workplace should be implemented. Employees should be given training on hand hygiene and infection control practices in the workplace.
Finally, information on benefits outside of workers’ compensation insurance may be available for those affected by the coronavirus. The CARES (Coronavirus Aid, Relief, and Economic Security) Act and the Families First Coronavirus Response Act can provide financial support for employees sickened in the workplace. ◼
February 16, 2021
America’s truckers are the lifeblood of commerce. As the coronavirus pandemic has tightened its hold on the U.S. economy, truckers are an essential component in delivering goods from manufacturing and production centers to end users. To help protect the nation’s trucking industry, a leading immunization advisory group placed truckers in the next priority group for COVID-19 vaccines. This move, coupled with the protection of comprehensive transportation insurance, helps to manage the risks truck drivers face in their daily operations.
Trucking Associations Weigh In
In mid-2020, the American Trucking Associations (ATA) and the Canadian Trucking Alliance began to voice concerns about vaccine prioritization in the commercial transportation industry. The ATA sent position letters to the White House, the National Governors Association, and the U.S. Centers for Disease Control and Prevention (CDC), arguing that as essential workers, truckers must be included among priority vaccination groups.
Widespread infection with COVID-19 has affected workers in all corners of the country, including thousands of commercial vehicle operators. Based on their vital role in delivering not only goods, but the COVID-19 vaccines themselves, protecting truckers makes sense from economic and risk management perspectives. This move can only strengthen the protections of transportation insurance in the commercial trucking industry.
The ATA’s concerns were addressed in December, 2020, when the Advisory Committee on Immunization Practices (ACIP) hosted a virtual public meeting to address vaccine prioritization recommendations. In a 13-to-1 vote, the committee, a group of experts from the CDC and other disease prevention agencies, recommended that truckers be placed Phase 1b of the COVID-19 vaccine deployment. Truckers join other essential workers in Phase 1b.
Final decisions on vaccine deployment are left to state authorities, but transportation industry analysts are confident truckers will gain this valuable protection once delivery of vaccines is made in the nationwide distribution rollout. The ACIP continues to study data from subsequent clinical trials in order to better prioritize vaccine distributions but stated that emergency action is needed to protect critical transportation workers.
Government Support for the Transportation Industry
Recognizing the vital role truckers play in restoring the U.S. economy, several other regulatory agencies have done their part. The most prominent of these is the U.S. Department of Transportation (USDOT), which has created hours-of-service regulation exemptions for trucking companies and their drivers. The exemptions apply to commercial drivers that provide direct emergency assistance.
The Federal Motor Carrier Safety Administration extended its own Emergency Declaration to ensure the efficient and speedy delivery of COVID-19 vaccines, medical supplies, and equipment needed to combat the pandemic. Emergency Declaration No. 2020-002 provides emergency relief from certain parts of the Title 49 Code of Federal Regulations, including rules governing empty vehicles and work break/rest requirements. By supporting the commercial trucking sector, federal and state regulators are helping to speed recovery while minimizing the burdens on truckers. These moves, coupled with vaccine prioritization and the protection of commercial transportation insurance, serve to provide a powerful risk management strategy for commercial vehicle companies and their operators. ◼
February 9, 2021
The directors and officers of a company bear the final responsibility for oversight and management of the company’s business affairs. These stakeholders manage a diverse set of governance challenges and experience significant risks in the discharge of their duties. Directors and officers (D&O) insurance serves as the foundation of risk management for corporate leaders. By ensuring adequate D&O insurance coverage, and by adhering to best practices in corporate governance, risks can be minimized – ultimately protecting the corporate and personal assets of its leadership team.
Challenges for Directors and Officers
Corporate governance is a complex field of business management, requiring a thorough understanding of the factors that influence fundamental business decisions. These factors include adherence to:
- State laws: State laws of corporations may govern a variety of aspects of business management such as the fiduciary and liability duties of directors as well as requirements for shareholder notification.
- Federal laws: The U.S. government imposes strict regulations on the governance of public companies that cover ethical and business decisions as well as auditing and compensation requirements for business leaders.
- New York Stock Exchange/Nasdaq compliance regulations: For publicly-traded companies, governance of public companies under these organizations requires practices that are in the best interests of company shareholders. These requirements may include specific shareholder rights, voting procedures, and the appointment of independent chairpersons.
Failures in any of these governance areas may result in steep regulatory penalties as well as reputational harm of the company and its leadership. These failures may also result in legal challenges by shareholders, potentially costing millions of dollars in judgements and settlements unless robust D&O insurance is in place to protect against these claims.
The Duty of Care for Directors and Officers
With the oversight and management of corporate strategy in the hands of directors and officers, the concept of “duty of care” comes into play. In simple terms, duty of care refers to the responsibility of exercising business decisions that are influenced by common sense, financial prudence, and careful consideration. Directors and officers must make decisions that are in the best interests of company operations and shareholders; to do so, decisions require investigation and due diligence on the part of leadership teams.
Best practices for directors and officers duty of care include:
- Providing sufficient notice prior to board meetings to ensure adequate time to prepare.
- Discussion of business decisions with management teams as well as legal and financial counsel.
- Requesting and reviewing of documentation that describes the reasoning behind proposed transactional decisions.
- Ensuring full participation of all directors and officers to allow for questions to be posed and to share relevant information.
Board Composition and Independence
The most successful corporations enhance the protections of D&O insurance by forming boards that are diverse, engaged, and independent. It is this latter aspect that is of the utmost importance; in fact, board independence is often a requirement of certain state and federal corporate governance regulations. Independent board members are those not influenced by direct company management, giving them the ability to be free of personal or business relationships.
Choosing the right board members is a crucial part of good corporate governance. A quality board member will be:
- Engaged through the collection of information about the company and its management teams.
- Ready to review materials for board meetings as well as the transactional details that influence business decisions.
- Responsive, with clear communication especially in crisis situations.
- Ready to ask difficult or complex questions to determine the best path forward for corporate decision-making processes.
Finally, board members should know the requirements and regulations of corporate governance, including both federal and state laws as well as those imposed by stock-trading organizations. Adherence to these requirements on the part of boards serves as a critical component of risk management, helping reduce potential lawsuits or other legal claims on D&O insurance policies. A strong and independent board lays the groundwork for continued business success. ◼
January 26, 2021
Last winter, the world was plunged into a period of deep uncertainty, unpredictability, and instability as the novel coronavirus spread rapidly across the globe. By spring, widespread lockdowns forced businesses to modify operations or shutter their doors. Workers lost jobs in numbers not seen since the Great Depression, with April’s peak reaching 14.7%. As restrictions lifted in many areas, workers began returning to jobs, reducing the unemployment rate to 6.7% in November.
While there are many industries that have been able to make the switch to remote work, a large percentage of the workforce is still required to report to on-site jobs. With the onset of cold weather and the holidays, the pandemic is seeing a second surge that is impacting every corner of the country. This leaves a significant number of people at increased risk for contracting COVID-19, including while on the job.
This, along with other factors, has the potential to impact employers and the workers’ compensation market into 2021.
Predictions for 2021
The impacts of coronavirus on workers’ compensation are varied, as coverage eligibility depends on industry risk variables and state guidelines. Each state has its own rules in place for workers’ compensation insurance, so the stipulations that relate to the pandemic could be significantly different from one state to the next. Regardless, the coronavirus will have a significant impact on the 2021 landscape.
Normally, workers’ compensation does not cover contagious diseases, but it may or may not cover employees who contract COVID-19. Employees whose jobs place them at greater risk than the general public can typically make a successful case for filing for workers’ compensation. There has already been a rise in claims filed due to the coronavirus, which has led to significant losses for some providers. The winter surge is just getting underway, and, thus far, widespread lockdowns have not been ordered. As such, it is quite likely that claims will continue to increase, potentially dramatically, in the first quarter of 2021 and then start lowering as more individuals become vaccinated.
Prior to the pandemic, rates had been on a downward trend. There is some indication that employers should expect that trend to reverse in the coming year. However, the reversal is not necessarily strictly due to virus impacts. The market was already showing signs of change before the pandemic. Other factors contributing to losses need to be considered, as those causes are not likely to change once the health crisis has passed.
One factor that could significantly impact workers’ compensation markets is the state of their investments. COVID-19 has led to a particularly volatile stock market, which has had a negative impact on investments. Markets may not stabilize until well into 2021, so insurers may find that they have to make adjustments to their portfolios to mitigate damages caused by plunging stocks. ◼
January 12, 2021
It has been nearly a year since the first recorded COVID-19 case in the U.S. was announced, and the virus continues to take a devastating toll on the country. In addition to the obvious health impacts, the pandemic has had a tremendous effect on the economy, infiltrating nearly every sector. The insurance market is one arena that is beginning to experience the ripples of instability, uncertainty, and increased risks that fluctuating guidelines and rising infection and death rates have wrought.
While industries that were able to move their employees to remote work did so at the beginning of the pandemic, numerous employers were unable to do so due to the nature of the work. In addition, as restrictions lifted, some remote workers were sent back to the workplace. As a result, employers could see a significant increase in claims related to COVID-19. As such, the outlook for the employment practices liability insurance (EPLI) market shows an increase in risks for 2021.
What Is EPLI?
One question that frequently gets asked is, “Is employment practices liability insurance the same as workers’ compensation?” It is not. EPLI coverage provides employers protection against claims that are filed for wrongful employer practices or acts. There are four major claim categories EPLI policies usually cover, though some policies may cover others:
- Privacy rights
- Employment status
What Does COVID Have To Do With EPLI?
At first glance, it may not seem like any of these types of claims would have any relevance to the pandemic. However, there are several coronavirus-related claims that do have the potential to fall within the employment practices liability insurance coverage. One type of case in particular could fall within EPLI policy provisions.
While these policies typically don’t cover claims related to injuries or illnesses, they generally cover policy rights infringement cases. This is relevant because when someone in the workplace contracts COVID-19, contact tracing is conducted. During this process, other employees inevitably discover that a coworker has the virus. Thus, claims alleging unlawful disclosure of health information could result.
What Are the Risks for 2021?
EPLI insurance carriers may see a rise in the number of cases filed. In addition to potential increases in privacy rights claims, one other category of professional liability coverage likely to see increased risks for claims is director’s and officer’s liability insurance. The economic downfall from the pandemic is primed to continue and deepen in the new year.
Small businesses will face significant financial hardships, as they have so far. Larger corporations often have surplus capital to withstand business interruptions while supporting employees, at least to some extent. The same is not true for small businesses. As such, it is quite likely that more D&O claims will be filed in 2021 due to increased litigation. Furthermore, it is entirely possible that courts will order higher payouts because of a widespread perception that companies should have been better prepared for the scenario the country is currently facing. ◼
January 5, 2021
The best way to prevent a data breach is to be prepared for one. Implementing strong cybersecurity measures, maintaining them, and conducting regular updates are critical steps in securing systems. Educating staff about cybersecurity and training them on what they need to do to protect data and information are also crucial. Human error and carelessness are two of the primary causes of a cyberattack. Finally, your clients need a formalized plan for how to deal with an attack should one occur.
No matter what preventive measures your clients take, complete protection is not guaranteed. It is nearly impossible to stay ahead of cybercriminals. Cyberattacks are on the rise, with incidents in 2020 reaching as many as 4,000 per day. Procuring cyber liability insurance has never been more imperative to protect a business if it was to experience a data breach. So, what should a company do after a data breach? If an incident occurs, your clients need to be able to respond effectively and efficiently.
The Initial Response
A cyberattack can be daunting, but panicking will not help solve the problem. A data breach response plan helps your clients remain focused so that they know what initial steps they should take. Activate the response plan immediately. Take note of the date and time the breach was discovered, and when the response was initiated. Within the next 24 hours, your clients should also:
- Alert members of the response team.
- Secure the area to prevent access to evidence.
- Take operations offline to prevent further data losses, but do not turn off the power or tamper with any technology.
- Assess any additional risks and prioritize steps needed to reduce those risks.
- Call in the cyber forensics team to begin investigations into when and how the cyberattack happened.
- Consult with the legal team and notify law enforcement when necessary.
- Notify the cyber liability insurance provider.
The Next Steps
After your clients complete the initial steps, they must document everything that has occurred thus far to ensure their company stays on track to recover and reopen. At this point, a team should begin resolving the issues to prevent future attacks. It is essential to carefully consider your client’s company’s vulnerabilities and address any issues that need to be remedied.
Service providers, encryption measures, and network segmentation should all be examined. The forensics team can ascertain whether any of these played a role in the attack. Identify everyone who may have been affected by the breach and what information was stolen. The forensics experts will remove any tools the hackers used to access the system.
Once affected businesses and individuals have been identified, it is imperative that they notify them as quickly as possible and let them know what information may be at risk. Make sure, however, that your clients consult with the lead investigator to time their notifications so that they do not impede investigations. Note that if the data breach involved health information, they are required to alert the Federal Trade Commission. ◼
December 8, 2020
2020 was a difficult year for businesses around the globe. The coronavirus pandemic caused mass layoffs as the world economy came crashing down. For those business operations that were able to remain operational, a new threat emerged: cyber crimes. Cyber criminals stepped up their attacks on targets in the banking, utilities, and healthcare industries, causing billions of dollars in damages and lost productivity. Cyber liability insurance has become a critical risk management strategy for modern business operations, especially in the wake of increased criminal activity. For 2021 and beyond, business owners must gain knowledge about the top cyber threats they may face in the coming years.
What’s Old is New Again: Phishing Attacks
For nearly as long as computer devices were networked together, so-called “social engineering” hacks have plagued network administrators. Phishing, or the practice of having victims click a malicious link, open an infected email attachment, or reveal passwords and login credentials to attackers, has seen a sharp uptick during the pandemic. Hackers use phishing attacks to embed code into business computer networks or use credentials to gain access to sensitive data.
Ransomware: A Perennial Threat
Not quite as old as phishing, but still familiar to IT professionals is the ransomware attack, where cyber criminals will gain unauthorized access to a network and hold it hostage until a ransom payment is made. Malicious software is placed on targeted networks, particularly in the financial and healthcare sectors. These attacks interrupt business continuity and may result in the loss or destruction of critical data, straining even the best cyber liability insurance coverage.
Breaches in the Cloud
Cloud computing has revolutionized business networks across industries. Data can now be stored offsite and accessed from anywhere in the world. As a result, this has created new risk profiles for business owners – risks that cyber liability insurance is only now catching up to. Whether it is the cloud storage host or the end user, configuration errors are the most common source of unlawful data breaches. With access to sensitive business data, cyber criminals may intercept personally-identifying details, create fraudulent accounts, or sell data to the highest black market bidder. Again, these breaches can cost millions of dollars in recovery and damaged reputations.
The Internet of Things (IoT)
Every electronic device connected to a business network represents a potential weak point. The Internet of Things (IoT) has increased the ability of criminals to find and to exploit weaknesses. IoT is used to remotely manage business infrastructure or to capture and process data. Unfortunately, many of these devices are not equipped with robust security measures, making them a preferred target of cyber criminals. By exploiting weaknesses, criminals can gain access to business networks, giving them the ability to steal or erase data with a few strokes of a keyboard. Cyber liability insurance is designed to protect businesses from the losses associated with illicit criminal activity on company networks, but understanding the nature of IoT and the weaknesses it represents is a crucial risk management step.
Remote Work Environments: Prime Targets for Criminals
As the pandemic spread across the globe, resourceful employers added remote work options for their employees. Employees could log onto company networks from home using devices ranging from desktop and laptop computers to smartphones and tablets. Unfortunately, network security was often unable to keep pace with criminal activity, and remote workers were targeted by cyber thieves. Primarily, workers are responsible for keeping their own devices up to date in terms of antivirus and anti-intrusion software. Password management is another hot button issue for network administrators in the remote work environment. Each of these weaknesses is readily exploited by criminals and as a result, high-frequency and high-severity claims against cyber liability insurance policies have piled up.
To protect sensitive business networks, business owners must work with information security professionals to patch systems, increase monitoring, and train employees on safe access practices. These business owners must also carefully assess the coverages and limits of their cyber liability insurance policies. This insurance serves as a fallback in case of unauthorized or criminal computer activity. With this insurance and with information security practices in place, business owners can more readily protect sensitive data and computer networks from theft. ◼
November 17, 2020
In the digital age, businesses face numerous risks associated with computer and technology systems. Highly publicized data breaches of major corporations have captivated the attention of business leaders; these breaches have also cost billions of dollars in forensic analysis, recovery, and reputational harm. While cyber liability insurance serves as the foundation of risk management, business leaders need to understand cyber risks. One of the emerging risks is that of “cryptojacking,” which exposes affected companies to the potential for severe liability claims. In this article, we will explore cryptojacking and provide information on how to prevent this cyber crime from harming your business operations.
What is Cryptojacking?
Cryptojacking refers to the illegal practice of hijacking someone else’s computer for the purpose of mining cryptocurrency, or digital/virtual currency like Bitcoin. Cyber criminals gain access to computer networks or spoof victims into installing cryptomining code onto computer systems. The code runs in the background and is difficult to detect. While the scripts used to mine cryptocurrencies do not in themselves damage computer systems, their placement represents a breach in network security. Once hackers gain access, they may attempt to hijack sensitive business data or commit other cyber crimes, putting the business at risk.
It is unclear how much cryptocurrency has been mined through this unauthorized hijacking of computers, but its value is estimated to be billions of dollars. In 2018 alone, a single cryptojacking incident infected more than 500,000 computers in Asia, netting criminals as much as $4 million. Computer security analysts indicate that the cryptojacking technology is relatively easy to master and expect significant growth in sophistication in the coming years. Cyber liability insurance is crucial for business owners who rely on computer systems and the sensitive data those computers contain.
By working in the background and being difficult to detect, cryptojacking may go unnoticed for long periods of time. The anonymous nature of the criminal act, and the fact that nothing was stolen from the infected computers, gives little incentive for businesses to pursue legal remedies. Nevertheless, network intrusion by cyber criminals is a serious threat and can lead to the loss of sensitive business data, not to mention the expenses associated with prevention and recovery. While cyber liability insurance is designed to provide protection from criminal activity and their expenses, preventing cryptojacking in the first place is the key to risk management.
As with any cyber criminality, monitoring unusual computer activity is the first step in preventing unauthorized intrusion. Computer security professionals recommend regular monitoring of systems and hardware for any signs of tampering. Updating security software and applying patches to systems also reduces the potential for unlawful network access.
Training employees in detecting fraudulent activity is another key component of risk management. Cryptojackers often use a technique called “phishing” to fool someone into clicking on a web link or email that looks legitimate. Clicking that link loads malware or cryptomining applications onto the computer network. Identifying and avoiding phishing attempts should be an integral part of employee training.
IT professionals should also receive specific training on cryptojacking practices and detection. In many cases, an increase in the number of employee complaints related to slow computer performance is an indication that cryptomining scripts are infecting computers. Training for all stakeholders is an important approach that can help prevent criminal hacking from harming business operations.
Because criminals sometimes infect legitimate websites with spoofed ads, security professionals recommend installing ad-blocking browser extensions on computers connected to the internet. Some third-party ad-blocking apps already incorporate tools to detect cryptomining.
Finally, business owners must carefully assess their current insurance protections. Cyber liability insurance is designed to protect business assets from losses from illegal computer activity. With the right security practices, and insurance policies and coverages in place, businesses can rest assured that their critical networks are secure from cyber criminals. ◼
November 10, 2020
Staffing agencies throughout the United States could not have predicted the challenges faced by the coronavirus pandemic of 2020. The pandemic created fundamental shifts, not only in how businesses operated, but how employees were protected from infection. Staffing professionals scrambled to find solutions, allowing them to fulfill their roles while keeping employees safe. Understanding the challenges and recognizing emerging trends in staffing is a powerful risk management tool, supplementing the protections of staffing industry insurance. Here are staffing trends that provide insights into the coming year and that inform decision-making processes for staffing agencies across industries.
COVID Challenges and Remote Staffing
Staffing agencies were forced to downsize operations as the economy faltered in the wake of the COVID-19 pandemic. Despite these economic hardships, staffing analysts in the GRID 2020 COVID-19 Staffing Industry Impact Survey noted that about 30% of survey respondents indicated no real shift in business performance from 2019 to 2020.
Early pandemic lockdowns and stay-at-home orders caused many staffing agencies to transition their placements into remote work, and this served to buoy the industry. In fact, remote work options were highlighted as a priority for agencies going into 2021. Agencies are reporting a greater demand for remote workers, and this trend is expected to continue well into the future as more corporations gain a greater understanding of the efficiencies and cost savings remote employment represents.
- Customer-oriented challenges faced by staffing agencies included:
- Dwindling demand
- Inability of clients to make payments
- Slowdowns in new client acquisition
- Ever-changing job requirements, including a renewed focus on higher-skilled employees
Staffing agencies worked hard to adjust their business models, often attempting to do more with less in terms of resources and personnel. Many agencies also had to bolster their staffing industry insurance policies to reflect emerging risk profiles. As the economy strengthens, these modifications to the business model have proved beneficial, allowing agencies to regain some of the business lost to the pandemic.
Putting Clients First
Perhaps the most important trend in the staffing field is a newfound attention to client needs. As demand, talent pools, and new client acquisition shrank, smart staffing firms took the opportunity to strengthen relationships with existing clients. Relationships were bolstered by improved communications, assessing the needs and concerns of clients, and remaining in contact with clients that had implemented hiring freezes. When the freezes end, staffing operations can continue seamlessly without the need for rebuilding communication channels. Client-oriented services are always a part of a successful business model, and by focusing on this critical aspect, many firms were able to weather the economic downturns.
Candidates: The Lifeblood of Staffing
Mass layoffs and business closures during the early part of the pandemic led to a massive pool of unemployed workers. Despite this surplus, finding top talent proved difficult for many companies, including staffing placement agencies. To counter this challenge, staffing agencies embarked on two initiatives that will trend well into the next year.
First, improving the candidate experience was identified as a goal for agencies. Streamlining the application and hiring processes is central to improving the agency-candidate relationship. Communication improvements were also made, helping candidates remain in contact with agencies throughout the acquisition process. Remote recruiting and onboarding practices were implemented, helping to keep candidates safe from infection exposure. An unexpected benefit of remote hiring and onboarding is that it allowed staffing agencies to reduce overhead costs, including being able to downsize office space as remote operations took the place of in-person interaction. Finally, remote hiring practices reduced the potential liability exposures of agencies, helping them to avoid claims on staffing industry insurance policies.
Second, staffing agencies targeted improvements in hiring diversity and inclusion as important goals for the coming year. While diversity programs have gained traction over the past decade, 2020 saw a widespread public outcry for more inclusive hiring practices and operations, including placing more people of color into leadership roles. The agencies that made improvements in diversity initiatives noted two benefits: an increase in public trust, and a greater market share from companies seeking talented individuals who have been under-represented in the American workforce.
The COVID pandemic created new challenges for the staffing industry. As solutions to overcoming these challenges are trending, the industry is regaining its footing in a turbulent economic landscape. Maintaining client- and candidate-oriented programs is one part of the puzzle, as is ensuring staffing industry insurance is comprehensive enough to withstand emerging risk exposures. ◼
October 30, 2020
As remote employment has grown in popularity for the convenience and efficiency it provides business owners and employees alike, cybersecurity liabilities have equally expanded. With employees connecting to company servers from mobile devices or unsecured internet connections, the threat of cyberattacks has multiplied. In addition to concerns with malware, ransomware, and phishing attacks, vishing has emerged as a serious threat for the remote employee.
What Is Vishing?
The term vishing is a portmanteau of the words “voice” and “phishing.” In the realm of cybersecurity, phishing attacks target individuals through email or other digital means to gain access to sensitive, personal data like passwords or financial payment details. Most often, the attack is formed through an organization or individual that appears legitimate. With vishing, the attacks occur over the phone.
Using automated voice technology and Voice over Internet protocol, many remote employees are being tricked into thinking they need to establish new login credentials with their virtual private networks. Attackers are then able to gain a foothold in the corporate network, where additional information is retrieved and used in new social engineering attacks. Vishing attacks continue to develop and become more sophisticated, making it an important consideration for businesses sending employees home to work.
What Protection Is Available?
There are many ways you can educate your clients about cybersecurity protection, but the most important thing you can do is inform them of their cyber liability insurance options. There are unique exposures addressed through an insurance policy that cannot be protected by other means. Primarily, the financial ramifications of a cybersecurity attack.
Cyber insurance providers recognize the many elements involved with cyber threats, both the internal exposures of employees mismanaging information or getting caught in a phishing trap and the external concerns of a network breach and data hack. As remote employees expose new weaknesses in cybersecurity strategies, business managers need to know the extent of their insurance coverage. As a broker, you have the ability to direct their attention to comprehensive solutions.
What Does a Cyber Insurance Policy Cover?
Cyber policies address the risks of exposure from data breaches, compromised networks, or other malicious cyber events. Insurance policies may address both first-party and third-party coverages, and your job as a broker is to see what form of coverage would be most beneficial to your client. There are various costs associated with cyberattacks, as a company can be sued for damages from several parties. Litigation to mount a defense, notify individuals, or payout settlements for any of these parties can be more than a company can bear. Cyber insurance steps in as the financial resource for these costs.
Vishing will continue to emerge as a cyber threat, and more advanced attacks can be expected. As a broker, informing your clients of their risks and their subsequent insurance options is the best advice you can give. ◼
October 20, 2020
The idea of driving a truck may bring to mind images of the open road and freedom. However, in the wake of COVID-19, the entire transportation sector has been forced to change in order to survive.
Managing cash flow, running efficiently, and reducing expenses all require creativity on this pandemic-stricken planet. Investing in transportation sector insurance helps your haulage-focused clients protect themselves in this strange, new world. The pandemic has ushered in the need for multiple changes in this sector. Here are five examples of how the transportation industry has tightened up in a fight to survive in the face of COVID-19.
Several trucking companies have delayed making large purchases, such as new trucks for the fleet. Businesses have done so to preserve cash flow and avoid spending too much in these uncertain times. Another type of safety net the transportation sector relies on is commercial transportation insurance. Primary liability and physical damage coverage help fleet owners, managers, and drivers breathe easier.
Another way trucking companies have tightened up is by adopting relay schedules for haulage jobs. Drivers take cargo to pre-determined destinations where other drivers pick it up to take it to the next location. Each driver returns home after his or her route is finished, thus saving companies money by eliminating costs for hotels and incidentals. Commercial transportation insurance companies also help protect companies in the transportation sector with specialized cargo and vehicle coverage during the extended periods of time spent on the road.
Trucking companies seek to complete repairs faster and leaner to reduce costs by:
- Renegotiating supplier costs
- Performing more repairs internally
- Capping labor hours
The idea is to maintain the fleets in the most efficient way possible without sacrificing safety. Transportation sector insurance gives fleet managers and owners the assurance of financial safety with comprehensive packages covering trailers and cabs. Your clients will benefit from the coverage provided by experienced commercial transportation insurance.
Daily operations in many transportation companies are shifting as the need for social distancing is changing the way people work. Some jobs were lost while others shifted duties and began working remotely. This change helps segue to adopting new technologies for some aspects of business, including electronic bills of lading, toll management, and arranging bypasses for weighing stations. Commercial transportation insurance helps companies prioritize upgrading operational processes without fear of sudden financial ruin.
Transportation Sector Insurance
Companies specializing in commercial transportation insurance are the best choices for your clients because they are familiar with the various types of available coverage, and they know the unique needs of this industry. These days, peace of mind is a valuable commodity the transportation sector needs. ◼
September 15, 2020
When a bank or other financial institution agrees to extend a loan for financing an automotive or property purchase, that institution faces significant risks. In most cases, buyers are required to obtain insurance to protect the loan. When that insurance is not obtained, or is otherwise insufficient, lenders can get their own insurance to protect the lender’s financial interests. This is known as force-placed insurance. Removing that insurance is a different matter.
What is Force-Placed Insurance?
Much is at stake when a lender or mortgage/auto loan servicer enters into a loan agreement with a property or vehicle buyer. To protect its financial stake in a loan, force-placed insurance was developed to provide a hedge against loss of coverage on the part of the buyer. In simple terms, a force-placed insurance policy is placed by a financial institution when the borrower’s own insurance is insufficient or has lapsed. This specialized insurance policy is often referred to as:
- Creditor-placed insurance
- Collateral protection insurance
- Lender-placed insurance
Why is Force-Placed Insurance Needed?
Most states and most lender agreements require borrowers to obtain property insurance as part of the lending process. Typically, this comes in the form of mortgage insurance or an auto loan insurance policy. There are numerous circumstances where the borrower is unable to obtain or maintain coverage, or coverage is deemed insufficient. Possible insurance scenarios include:
- Failure of the borrower to pay annual premiums.
- Policy expiration.
- Cancellation of insurance policies by the insurer.
- Withdrawal of adequate coverage.
- Oversight on the part of the borrower.
- Difficulty in securing insurance for a property located in a high-risk area.
When the borrower’s own insurance protection falls short, force-placed insurance steps in. Lenders have a legal obligation to ensure continuous and adequate insurance coverage for the properties they finance. U.S. Risk Financial lender-placed insurance serves as a viable solution; it protects the financial interests of lenders.
Why Would Force-Placed Insurance Be Removed?
Under the typical fore-placed insurance policy, premiums are added to monthly mortgage payments, driving them higher. Unfortunately, many borrowers who find themselves with force-placed insurance are struggling financially; the extra cost associated with force-placed policies may be almost twice what homeowner-obtained mortgage insurance costs. There is a financial incentive to remove such a policy when it is no longer needed. Other removal scenarios include:
- When a homeowner reinstates coverage that has lapsed or expired.
- When a borrow finds an insurer willing to underwrite an appropriate policy for a high-risk property.
- When outstanding premium payments have been caught up.
Most importantly, many force-placed insurance policies cover only the outstanding amount of the home or auto loan, and may not include personal property coverage. Borrowers can often get superior protection from a traditional mortgage insurance policy, so removing a force-placed policy makes economic sense.
Removing a Force-Placed Policy: Tips for Borrowers
When a force-placed insurance policy is no longer needed, borrowers must take several steps to ensure that it is removed. Removal can have significant financial benefits for the borrower.
First, the borrower must obtain a mortgage or loan insurance policy that meets the amounts required by the lender. Homeowners can choose the existing insurer or choose their own if available.
Next, all applicable documents must be provided to the lender. Adequate insurance in the form of a copy of the new policy is sufficient proof. This should be sent to the lender via certified mail and via fax or email, if available. Borrowers should obtain a letter of cancellation from the lender once the force-placed policy is no longer in place.
Force-placed insurance is designed to protect lenders from risk exposures resulting from home or auto loans. They are not always the ideal solution for the borrower. With the above steps, borrowers can remove an existing creditor-placed policy and replace it with appropriate insurance coverage, meeting lender requirements and state laws. ◼
September 8, 2020
When a real estate property is financed for purchase, the purchaser is not the only entity with exposure to risk. The lender also faces substantial risks in these transactions. To help manage these risks, a specialized form of insurance known as force-placed insurance is often utilized. This insurance is designed to protect the financial interests of the banking or mortgage-lending institution. As such, it has been a part of the mortgage lending process for decades, offering peace of mind for lenders and homeowners alike. In this guide, we will explore what force-placed insurance is, how it works, and what it covers.
Many Names, Same Protection: An Overview of Force-Placed Insurance
Force-placed insurance is an insurance policy placed by a bank or mortgage servicer on a property where the mortgage borrower’s (the homeowner’s) own insurance coverage has lapsed or is deemed insufficient to adequately protect the lender’s interests. Force-placed insurance goes by several names, including:
- Lender-placed Insurance
- Creditor-placed Insurance
- Collateral Protection Insurance
The purpose behind this insurance is simple: it protects the lender’s financial stake in a property loan. Homeowners are typically required to obtain their own mortgage insurance, but there are several potential scenarios where securing such protection is impossible or insufficient. These scenarios include:
- Failure on the part of the homeowner to maintain coverage through annual premium payments.
- Policy lapses or expiration.
- Oversight on the part of the borrower.
- Cancellation of existing policies.
- Withdrawal of adequate coverage by insurers.
- Failure to locate an insurer willing or able to underwrite a risky property, such as one located in an area where natural disasters are common or in high-crime areas.
- Insufficient coverage under existing property insurance policies.
If any of these scenarios occur, the lender’s own financial assets may be at risk. From about the 1960s, most mortgages contain language allowing the lender to obtain insurance policies of their own on properties. In most cases, the lender is the only beneficiary of such coverage. In the event of a claim, the lender can choose to share proceeds from the force-placed insurance policy to help the borrower – the property owner – repair a damaged property. U.S. Risk Financial offers lender-placed hazard and flood coverage designed to provide robust protection for a range of potential claim scenarios.
How Does Force-Placed Insurance Work?
If a lender must obtain insurance on a property to protect its interests, insurers and mortgage borrowers must understand several factors. First, this insurance is only designed to cover the amount due to the lender. However, many force-placed policies offer the option of so-called “replacement coverage” if a property is lost due to fire or other covered peril. Second, force-placed insurance tends to be more expensive than similar policies obtained by the homeowner as mortgage insurance, and may offer less coverage for the price. Because of the risks inherent in the lending and mortgage servicing process, insurers sometimes charge higher annual premiums to help recoup any losses resulting from a claim. Additional costs of force-placed insurance typically appear in future mortgage payments, driving them up.
If a property becomes damaged or is lost, the lender with a force-placed policy files a claim just as with typical homeowner insurance. Depending on the policy language, the lender may recover the amount left due on the mortgage or may be able to recover replacement expenses.
Options for Financial Institutions and Mortgage Servicers
The typical force-placed insurance policy provides very basic protection, only covering the remaining amount due on a given property loan. This basic coverage may not be sufficient for lenders, however, so insurers have rolled out a series of options. Options in available force-placed insurance policies include:
- Coverage for entire real estate investor portfolios.
- Replacement coverage if a structure is lost.
- Both residential and commercial property coverages.
- Options for unique risks such as natural disasters (flood, earthquake, fire) and certain business liabilities experienced by the lender.
- Risk management services.
Lenders have a legal obligation to ensure continuous and adequate insurance coverage for the properties they finance. U.S. Risk Financial lender-placed insurance serves as a viable solution; it protects the financial interests of lenders. Even with the added expenses associated with such policies, homeowners ultimately benefit as well. This coverage can eliminate the uncertainty of a lapse in mortgage insurance or inadequate coverage, protecting the assets of lender and borrower alike. ◼
August 11, 2020
Financial institutions that offer employee benefit plans to their workers face significant risks. As the regulatory landscape of banking corporate governance shifts, risk exposures also shift. Litigation related to the management liability of employee benefits programs is growing; as a result, the need for fiduciary liability insurance coverage has become extremely important. In this guide, we will present an overview of fiduciary duty and discuss the ramifications of management liability exposures as they relate to protecting your insurance clients in the financial sector from liability claims.
An Introduction to Fiduciary Duty in Employee Benefits
Companies and organizations of nearly every structure often provide their employees with benefits plans. Banks and other financial services firms are some of the many business operations that extend benefits to employees; these benefits plans may include:
- Healthcare and welfare insurance policies
- Profit-sharing structures
- Savings and retirement plans
- Pension plans
- Stock options
The teams of people tasked with managing and administering benefits plans have what is called fiduciary duty, which is defined as “acting in a way that will benefit someone else financially.” In other words, benefits administrators must act with good faith, prudence, and care on behalf of the employees who receive these benefits.
Unfortunately, fiduciary and management liability issues arise when fiduciary duty is breached or benefit plans and programs are mismanaged. Legal claims may also be centered on errors and omissions in the administration and management of benefits plans. In 1974, the concept of fiduciary liability was made even more complex by the passage of ERISA, the Employee Retirement Income Security Act. In Section 409 of the Act, fiduciaries may be held personally responsible for mismanagement of employee benefits plans, putting personal and corporate assets at risk. Under ERISA, employee benefits plan participants have the right to sue their employers for any breaches of fiduciary duty.
Protecting Clients with Fiduciary Liability Insurance Solutions
Management liability exposures can cost companies millions of dollars in judgments and settlements as well as the expenses associated with defending against claims of fiduciary mismanagement. Faced with rising claims, more employers are taking hard looks at their existing liability insurance coverages.
The foundation of any liability risk management program is insurance. For employee benefits, fiduciary liability insurance policies serve as the “security blanket” which protects business assets and the personal assets of directors and officers tasked with administering and/or managing benefits plans. Any company that offers benefits plans such as healthcare, dental, retirement, or pension programs to their employees must consider fiduciary liability coverage. The reason for this insurance protection is simple: no matter how carefully benefits are administered, mistakes can be made. Even false claims of breach of duty made by employees can result in expensive litigation. Fiduciary liability coverages include protection against claims like:
- Conflicts of interest
- Prohibited financial transactions
- Wrongful denial of benefits
- Failure to administer plans according to plan documents
- Improper advice or counsel
- Failure to monitor third-party benefits service providers
- Mismanagement of investments
- Errors and omissions in plan administration/management
Most management liability insurance plans also include coverage against legal expenses and the penalties or fees imposed by the U.S. Department of Labor for breaches of fiduciary duty. Sharing the advantages of these insurance solutions with your clients can help to reinforce business relationships. Risks associated with fiduciary duties can devastate any business operation, so it makes sound financial sense to implement risk management programs backed by comprehensive insurance policies. ◼
August 4, 2020
Staffing agencies serve as the conduit between employers and employees. As such, they face a complex landscape of regulatory requirements, including laws that govern employment practices. Employment practices are a hot-button issue, particularly in regard to discrimination in the workplace. Claims of employees being retaliated against by employers are on the rise in the United States, triggering a corresponding increase in claims on staffing firm insurance policies. In this article, we will explore the role of staffing firm insurance and present ways to mitigate the risks associated with employee retaliation claims.
Employment Retaliation Claims on the Rise
Employees who believe they are being discriminated against in the workplace often complain to their employers or staffing agencies. These complaints often lead to claims of employer retaliation filed with state and federal authorities. These claims are on the rise and have exhibited a sharp increase over the past decade. Of the 72,675 discrimination claims filed with the U.S. Equal Employment Opportunity Commission (EEOC) in 2019, just over 39,000 were related to employer discrimination. That figure represents over half of all discrimination claims filed with the agency.
What is Employer Retaliation?
If an employee complains about certain workplace practices, such as unlawful discrimination based on sex, orientation, or race, they are protected by federal and state laws against retaliation. Unfortunately, employers may violate these protective laws either inadvertently or on purpose. In simple terms, employer retaliation is the practice by which employees who complain about workplace discrimination are penalized for filing a complaint or for participating in investigations of discrimination. Retaliation can take several forms, including:
- Negative performance reviews
- Undesired transfers to other positions or workplaces
- Harassment or mistreatment by supervisors and coworkers
- Termination of employment
When a worker believes he or she has experienced workplace discrimination and is being retaliated against for filing a complaint, this can create an emotionally charged situation. Staffing firms are often caught in the middle, potentially opening the door to expensive liability claims.
Preventing Claims of Retaliation
Staffing firm insurance is the foundation of risk management for employment staffing and placement agencies. When it comes to preventing claims of employee retaliation, staffing agencies must adopt rigorous procedures to support the protections of their insurance policies. These procedures must include:
- Supporting documentation: Staffing firms must thoroughly document any incidents that lead to an employee’s demotion or termination. Documentation must include information regarding timing, whether a complaint was filed, and whether the demotion or termination was otherwise justified.
- Education of employer clients: Staffing agencies and their clients must work in close concert with one another, particularly in regards to handling temporary or contracted employees who may not be performing up to standards. Educating clients using feedback is critical; clients must be prepared to share information about expectations and employee performance, and the staffing agency must ask for this feedback as well.
- Third-party assistance: Employment law is a complex and ever-changing aspect of the modern business world. Employers and staffing agencies alike may become overwhelmed with the myriad regulations governing employment practices. It is a good idea to establish a relationship with an employment attorney as well as to alert staffing firm insurance carriers whenever retaliation claims are filed.
- Staffing agencies and employers facing claims of workplace discrimination and/or retaliation must also set policies to manage their risk exposures, especially during investigations. Policies can include:
- Establishment of confidentiality rules: During investigations, all interviews with affected parties must always be kept confidential.
- Preventive measures: Implementing temporary measures to protect both employer and employee during a discrimination/retaliation investigation. This can include temporary reassignments, paid leaves of absence, or changes in supervisory control of the affected individuals.
- Ensuring consistency in employee discipline: Instituting workplace policies that apply to all employees, including steps taken to discipline employees. Failure to remain consistent in these policies can aggravate claims of discrimination or retaliation, and may increase the strains on staffing firm insurance and other liability protections.
With these measures and policies in place, employers and employees both enjoy their benefits. Workplace discrimination claims have only increased in recent years. While staffing firm insurance is designed to protect against the financial burdens of defending against such claims, managing risks through stringent practices helps to protect staffing agencies, their clients, and their employees. ◼
July 14, 2020
In every business and industry, there are risk exposures that must be addressed. The banking sector is no exception. Banks and other financial institutions face a wide range of risks, including several unique exposures to this important component of the world economy. There are many stakeholders involved in managing banking risks, including government entities. Commercial banking liability insurance forms the backbone of a robust strategy as a means of managing commercial bank risks. To further the role of risk management, understanding the risks inherent in the banking sector can help businesses protect the financial and information assets of their companies and their customers.
Systemic Versus Bank-Specific Risks
To begin our exploration of common banking risks, it can be valuable to learn the differences between the two primary categories of risk. Systemic risks, sometimes referred to as macro risks, affect the entire banking industry. Examples of systemic risks include the financial crisis in 2008, the implosion of the housing market the same year, and the financial challenges faced across the sector caused by economic instability in the wake of the coronavirus pandemic.
Micro risks, on the other hand, affect specific institutions or groups of similar institutions. Certain banking practices, including accidental or intentional acts on the part of banking employees, can be considered micro risks. Others may include cyber crimes like malware or ransomware attacks that attempt to access banking information unlawfully. Commercial banking liability is a complex field, but one factor is apparent; although the effects of macro and micro risks on banking institutions may differ, management of these risk exposures often takes similar approaches.
Typical Risk Exposures in Banking
Risks have evolved in the banking industry as new technologies and new business models have fundamentally changed daily operations. Information technology is the primary driver of this evolution; computer-based systems are used for data storage, electronic transfer of assets, and delivery of personalized banking services. While the goal of adopting technology in banking was to streamline operations, it opened the door to an entirely new class of risk: cyber liability.
Cyber exposures stand as the leading risk in the banking industry. In 2019 alone, over 25% of all malware attacks reported to authorities targeted banks and financial institutions. The theft or unauthorized access of banking data has cost the banking sector billions of dollars in losses, including commercial banking liability claims, forensic investigations, recovery efforts, and regulatory fines.
Cybercrime is certainly not the only risk banks face in the modern era. There are risks associated with many banking practices, and these risks must be considered when selecting commercial banking liability insurance and risk management solutions. Typical banking risks include:
- Risks to banking directors and officers from the actions of shareholders.
- Claims of non-compliance of regulatory banking provisions.
- Employee fraud and theft, including unauthorized access to or creation of accounts and embezzlement.
- Liability claims arising from physical loss or damage of assets.
- Derivative claims.
- Liability claims of unfair, discriminatory, or predatory banking and loan practices.
- Errors and omissions claims centered on wrongful transactions, foreclosures, and similar banking mechanisms.
The Role of Commercial Banking Liability Insurance
The banking sector experiences varied and ever-changing risks. When presented with the sheer volume of risks these financial institutions face, it becomes clear that a robust risk management approach is not only financially prudent but can mean the survival or loss of even the largest banking operations.
Not every bank is the same, however, and each institution faces its own unique risk exposures. For commercial banking liability insurance, one-size-fits-all insurance solutions may not be enough to mitigate the varied risks. To best protect the interests and assets of banks and their customers, specialized risk insurance brokers with in-depth industry knowledge are critical. Banking liability insurance offers protection in several significant areas, including:
- Fiduciary liability
- Errors and omissions (E&O) liability
- Employment practices liability
- Management liability
- Cyber liability
- Directors & Officers (D&O) liability
- Property and physical assets liability
In simple terms, commercial banking liability insurance is a foundational approach to risk management. With the right insurance protections in place, banks can provide economy-driving services to businesses and individuals. ◼
July 7, 2020
The COVID-19 pandemic has created powerful and long-lasting effects around the world. In addition to the coronavirus’s health impacts, the economy has suffered, with many people losing their jobs. As the economy begins its recovery, more job seekers are turning to the web for help. Remote workers are taking the place of many office workers, and companies are increasingly leveraging remote working and recruitment technologies to restart their operations. Staffing agencies and human resources departments need to understand industry best practices for remote hiring and managing.
The Benefits of Remote Recruitment and Hiring Practices
Recruiting and hiring talented employees has always been a challenge for companies of every size and type. In the wake of COVID-19, this challenge has only increased. Many companies have had to revamp their recruitment and hiring practices to meet emerging risks, and staffing agencies are no exception. There are significant benefits to using remote recruitment and hiring practices, even in more favorable economic conditions. Benefits include:
- Remote recruitment allows companies to bring in skills that may be hard to find in their current location.
- These systems cost less than in-person recruiting workshops and in-person interviews, particularly if a candidate does not wish to relocate for work or has difficulties in traveling to visit potential employers.
- Remote systems tend to be more flexible, allowing greater availability and access for employers and candidates.
Recruiting Remotely: Tips for Staffing Agencies
Now that the pandemic has changed the playing field for recruitment, how can staffing agencies leverage new tools and technologies? The process begins with recruitment, or attracting quality applicants to a given firm.
The key to success is for an employer to have a robust online presence with an excellent reputation and easy-to-find information on available jobs, locations, benefits, and corporate culture. It can also be extremely beneficial for companies and staffing agencies to maintain attractive social media accounts. These attributes help potential candidates visualize themselves as part of the work team and learn more about the company and its industry niche.
Staffing agencies may also use job-search platforms to connect with potential candidates. LinkedIn remains one of the most popular tools for this purpose, allowing a direct connection between employers and qualified candidates. Other remote worker-oriented platforms include Doist, FlexJobs, RemoteOK, and Working Nomads are available. Finally, global job boards such as Monster and Indeed offer employers a chance to connect with candidates and for candidates to search jobs from the comfort of home or office.
Hiring Best Practices
The COVID-19 pandemic has forced significant changes in the way companies and staffing agencies conduct the hiring process. For safety reasons, many employers have eliminated face-to-face interviews with candidates, at least temporarily. Many human resources professionals suggest that this trend may continue long after the pandemic is under control; remote interviews and hiring processes are more efficient and less costly than direct in-person meetings.
Assessing candidates remotely can be a challenge – and this is where technology has stepped forward to streamline the remote process. Video conferencing platforms, including Zoom, Skype, and Google Meet are used increasingly to interview qualified candidates. Alternatively, some staffing agencies use platforms like Jobma and HireVue to allow candidates to answer interview questions on their own time and at their own pace, then submitting recordings to potential employers.
One thing that has not changed in the wake of COVID-19 is the value represented by recommendations. Candidates can be assessed by requesting recommendations from mentors, previous employers, and industry contacts. Recommendations may also be posted on candidates’ LinkedIn or Indeed profile pages and should be considered part of the vetting process.
Remote Working Management for Staffing Agencies
One final tip to share with staffing agencies and companies looking to bolster their remote workforce is how such remote work is managed. The key here is to set expectations early and in a transparent manner. Not everyone is familiar with the demands of remote work environments and maintaining operations while adopting new technologies and practices has been challenging for many firms. With expectations understood by all parties, work can continue to flow efficiently.
Communication must be robust and flexible, allowing employers and their remote working staff to remain connected. Again, video conferencing technologies can be used to keep team efforts on track. Email and telephone calls also continue to be vital components of the remote work environment.
Remote working can create improved work-life balance in employees. Gallup’s poll suggests that over 50% of all employees value a better work-life balance, and remote working may satisfy that need. COVID-19 has forever changed many aspects of the business world. By remaining flexible, adopting new technologies, and embracing new practices, employers and staffing agencies can continue to recruit and hire talented individuals. ◼
June 23, 2020
In any corporation, the company’s leadership team is comprised of a group of executives entrusted with managing the business. These leaders must often make difficult decisions that influence the financial stability and growth of a given company. The duty to manage the company comes with significant risk exposures, necessitating specialized liability insurance protection. That is where Directors & Officers (D&O) liability insurance plays a vital role, protecting the personal assets of corporate executives and their families. Here is a closer look at D&O insurance, how it works, and how it can give peace of mind to corporations across industries.
What is Directors and Officers Liability Insurance?
Known in the insurance world as “D&O” insurance, Directors and Officers Liability Insurance is one part of a comprehensive risk management strategy for corporations. In simple terms, this insurance is designed to protect the personal assets of corporate leaders and their spouses in the event they are sued by other parties for any alleged or actual wrongful acts committed while managing the company. Personal suits for alleged or actual mismanagement can come from employees, customers, vendors, and investors in the company as well as many other third-party sources.
In addition to protecting the personal assets of corporate leaders, D&O insurance typically provides coverage for the legal expenses, judgements or settlements, and other costs associated with legal claims.
What are the Risks Directors and Officers Face?
The executive leaders of a company have an obligation of corporate governance, or the actions needed to keep the company healthy and secure. Unfortunately, this obligation comes with substantial risks. Anyone who believes that the directors and officers of a company are failing in their roles in corporate governance or financial duties may wish to file a legal claim against them. Common legal claims include:
- Lack of or negligence in corporate governance
- Failure to comply with workplace and employment laws
- Misuse of corporate funding
- Misrepresentation of the company’s financial assets
- Breaches in fiduciary duty, including financial losses or bankruptcies
- Claims from competitors, including theft of intellectual property or patents as well as poaching competitors’ customers
Under most D&O policies, criminal acts or illegality are not covered. While allegations of fraud are a common type of legal claim filed against corporate leaders, legitimately fraudulent behavior on the part of these leaders is generally not covered under D&O insurance.
Who Needs D&O Insurance Coverage?
For many years, D&O insurance has been associated with the largest corporations, such as prominent Fortune 500 firms. In reality, nearly every business that has a corporate board of directors or a management advisory committee can benefit from the protections afforded by D&O liability insurance. This can include both profit and non-profit companies as well as public agencies or organizations. If an organization has a directors group, any of those leaders can be personally sued for the myriad of reasons illustrated above. Investing in D&O insurance makes sound financial sense, protecting the assets of leaders and their families. ◼
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