1. As Seen In
26 Vol. 4, Issue 5, 2010 SNJ Business People
Governor Christie Addresses Business Leaders Ask an Expert
On April 30, Chris Christie addressed members of the Chamber of Commerce Southern New Jersey for
the first time as Governor of The State of New Jersey. Five-hundred Chamber members gathered to hear
Newest Insurance Products:
the Governor discuss issues of interest to the business community and the Fiscal Year 2011 Budget. Bells & Whistles or Necessities?
By: Joseph L. Pilato company. Private stockholders who
are depending upon a return on their
With the current state of the
investment may also have cause to
economy everyone is rethinking
sue company owners if results are
their spending. This article will
not as expected. The reality is that
outline the some of the latest
the owners and directors of many
business insurance coverage’s so
non-public companies do need
you can make an informed decision
D&O insurance. I have a few D&O
when selecting for your company.
lawsuits among my own clients, all
In spite of the near-universal
non-public companies.
recognition that insurance is a
Internet Liability: The internet
necessary and important part of
has made shopping easy and
business planning, some of the most
efficient. Products can be
recent insurance product innovations
researched, compared and priced
have been given the cold shoulder
online from a number of different
by business owners.
internet merchants. If
Failing to consider
your business sells its
some of the latest
products online, taking
coverage products could
credit card and other
expose your business to
personal information
a financial loss just as
from customers, you have
devastating as a fire or a
the obligation to secure
general liability lawsuit.
their data. Unfortunately,
Here is a review of
cyberspace has spawned
some of these newest
its own breed of invisible
policies and their
Joseph L. Pilato criminals that live off of
functions:
the credit card numbers
Employer Practices
Pictured with Governor Christie before his address are: (left to right) CCSNJ President & CEO Debra DiLorenzo; of others. Twice over the past year
Board member Michael Renna, South Jersey Industries; CCSNJ Board Chairman Dr. Herman Saatkamp, Jr., The Richard Stockton Liability: This coverage provides
I have had to cancel credit cards
College of New Jersey; CCSNJ Board Vice Chair Judith Roman, AmeriHealth New Jersey; and funds for the defense and settlement
when items that I had not purchased
CCSNJ Executive Vice President & COO Kathleen Davis of employee discrimination,
appeared on my statement. Internet
unlawful termination and sexual
data security isn’t the only exposure
harassment claims. Lawsuits
covered by these policies. If your
for these issues have been
company sources any content from
steadily rising each year. The
the website(s) of others, you may
Equal Employment Opportunity
have copyright exposure. There
Commission (EEOC) reports
are other internet issues as well,
that 93,277 charges were filed by
too numerous for the scope of this
employees in 2009. This is a 20%
article.
increase since 1999. The average
Professional Liability: If
EEOC lawsuit exceeded $250,000
your company is an architect
in 2009.
or engineering firm, a medical
In addition companies least able to
provider or a computer software
afford the costs of these lawsuits are
developer you probably already
in the crosshairs, since businesses
carry professional liability coverage
with less than 100 employees are
(also known as Errors & Omissions
most often the targets of these
insurance).
lawsuits. Many of these policies
On the other hand if you are
now also offer coverage for wage
a wholesale distributor, for
violations lawsuits according to the
example, you probably do not have
Fair Labor Standards Act (FLSA)
professional liability coverage (or
as well.
risk). Some companies, however,
Fiduciary Liability: If your
operate in a gray area where they
company sponsors a 401k or
may provide some services that can
other pension or profit sharing
be considered professional even
plan, the company owners have
though their core activities are not
exposure to fiduciary lawsuits
professional. For instance, I have a
for negligent investment of these
client who sells warehouse racking
funds. Even though you have hired
and storage systems. This would
an investment company and even
not seem to require professional
though your employee chooses
liability, but as part of their service
the investment funds he or she
they lay out the storage scheme in
will participate in, the company
the customer’s warehouse. Might
owners are ultimately responsible
a claim occur if the suggested
for payment in the event of a
racking layout constricts the
lawsuit…unless there is applicable
customer business flow instead of
insurance. Considering the volatility
aiding it, causing the customer a
of the investment market right now
loss of business? This is the type
and the relatively low cost of the
of question that should be asked by
coverage ($1,000-$1,500 per year
insurance buyers before ruling out
on average), the risk-reward favors
the need for professional liability.
the purchase of insurance.
The point of this article is to cast
Directors & Officers Liability:
some light on policies that may have
Many businesspeople think of
been discounted by business owners
“D&O” as only necessary for
in the past. The insurance policies
public companies to protect
listed above are either relatively
against stockholder lawsuits.
new or are not often thought of as
However, D&O coverage also
applicable coverage. Writing them
provides protection in a number of
off as unnecessary, though, ignores
different situations faced by private
substantial risk of loss
companies. Disagreements with
competitors, customers, creditors
or regulators can result in a lawsuit Article provided by: Joseph L. Pilato,
against the owners and directors of a CPCU of Maran Corporate Risk
Associates
SNJ Business People is the monthly print publication mailed via the U.S. Postal Service to over 10,000 business owners, leaders and managers focusing on what
they are doing, how, why, when, where they are making it happen in Southern New Jersey.
For More Information Visit snjbp.com or Call 856-673-1911.