R&R Insurance Blog

When the CARES Act was passed and signed into law on March 27^th of this year, it provided employers the opportunity to extend their employees a potential lifeline to navigate the COVID-19 pandemic, and more notably the economic challenges that it presented.  Specifically, these tools included:

• Increasing the amount that an employee can borrow from their 401(k) plan from 50% of the vested balance, with a $50,000 maximum, to 100% of the vested balance with a $100,000 limit.
• Making any 401(k) loan tied to COVID-19 interest free if paid back within five years.
• Allowing hardship withdrawals to COVID-19 affected employees younger than age 59 ½ without the standard 10% federal premature withdrawal penalties (state tax codes should be reviewed).
• Allowing employees to repay any hardship withdrawal distribution within a three-year period to avoid creating a taxable event.

These are unprecedented opportunities for employees that have been hit by COVID-19 circumstances, but there is one key stipulation.

In order for an employee to benefit from these provisions, their employer’s ERISA qualified plan must have a plan document that allows these benefits.  Until March 27^th there would have been no reason for them to be listed in a plan, and as such they were not.  At this point, every retirement plan provider should have proactively reached out to every company with an employer-sponsored plan and recommended, or at very least initiated, an amendment to the plan to help their employees.

Has your retirement plan provider contacted you and taken the steps necessary to make your plan CARES Act ready?  If they haven’t, why?  While the deadline for employers to make amendments is generous, your employees only have until September 23, 2020 to take advantage of the loan provisions of the CARES Act, so every day counts. 

If your plan provider is NOT helping you to make your 401(k) plan the most effective plan for your employees that it can be, contact your R&R Insurance Agent, and let them put you in contact with the in-house Wealth Management team that can make you a hero to your employees.  We are prepared to make a difference for your employees, and to make sure that they know that you are always watching out for their best interests.

COVID-19 is certainly challenging businesses on "best practices" these days.  One of the newest recommendations for businesses that remain open and/or are planning to re-open soon is for employees to take their temperature upon entering the building each day.  (It's something we at R&R Insurance are doing as well - see photo to the right)

Is it ok to monitor employees’ temperatures?  If so, how should it be done?

Monitoring of temperature is a practice in alignment with EEOC and CDC guidance for pandemic outbreaks.

If your business is a low or medium level of risk for exposure to COVID-19 according to OSHA, employee self-monitoring is an acceptable risk practice.

Be mindful of where and how to set up a self-monitoring temperature station.  For employer monitoring station use a no touch, NO CONTACT THERMOMETER. At time of rollout, explain to employees the safety procedures and policy if temperature is outside of normal range. Employees will appreciate their organization’s practice of maintaining a safe work environment.

If a designated employee is responsible for monitoring other employees they will be within the 6 ft. physical distance zone so Personal Protective Equipment - PPE gloves, face cover, and eyes is necessary.

Resources:

• Information for development of your business practices/educate employees CDC Care Kit and CDC Stop The Spread of COVID-19 If You Are Sick
• Contact R&R Insurance Services if you
  
  • Would like to discuss alternate strategies
  • Need clarification on using the right PPE
  • Looking for a Body Temp log and instruction
  • Additional questions about your business situation and COVID-19
    
    

While it may seem like a non-essential priority, during COVID-19, it is more important than ever to maintain a healthy and happy body, mind, and spirit. There are many ways you can manage this from the comfort of your own home.

It is important to change your perspective from “why is this happening,” to “how can I embrace the changes?” Three areas to focus on are nutrition, exercise, and mental health. Below, are provided resources you can utilize—not just during a pandemic.

Nutrition

You may find yourself binge eating or snacking more than ever. Notice if you are and try to curb your stress eating.

• Consume healthy snacks such as yogurt, string cheese, a hardboiled egg, protein bar, fruit, and/or vegetables.
• Track your food consumption in an app such as MyFitnessPal to stay accountable.
• Cook that healthy meal you’ve been meaning to try.
• Drink plenty of water.
• Utilize food you already have in your pantry and get creative!

Exercise

Just because gyms are closed doesn’t mean exercise is canceled. There are plenty of at-home ways to stay active with minimal equipment.

• Check out You-Tube for free content.
• Peloton, Beach Body, FitOn and many more apps have extended their free trial policy.
• Take plenty of outdoor walks while maintaining distancing from neighbors.
• Complete virtual runs if yours has been postponed or canceled.

Mental Health

There is a lot of uncertainty right now which can bring to mind doubtful and hopeless feelings. It is important to remain positive and calm, as eventually this too will pass.

• Try free meditation apps like Headspace.
• Dive into a book you’ve been meaning to read.
• Connect with a therapist via TalkSpace, Telehealth, or another platform.
• Stay connected with friends and family through Zoom, Facetime, and Skype.
• Contact a free public crisis hotline (866) 342-6892.

Overall nutrition, exercise, and mental health are possible to maintain and improve during this time. With technology continuing to evolve, there are plenty of resources to try and utilize. Take care of yourself and stay as healthy as possible. The world may seem uncertain right now, but when we look back on this time in a year or two, what will you remember?

April is financial literacy month. This comes during a time where many individuals have to adjust finances due to COVID-19. Financial roadblocks come unexpectedly, and can cause quite a deal of stress; so it is important to be prepared for the next round. Shannon Spence, in this article, writes about five key steps to financial wellbeing:

1. Get rid of high interest debt
2. Track your spending and create a realistic budget
3. Create an emergency fund
4. Save for retirement
5. Know where your credit stands

COVID-19 is showing just how critical creating an emergency fund is. With stay-at-home orders many businesses are closed, some have children at home, and income may be limited. Having an emergency fund can help you not retract money from other funds, such as retirement, which could have penalties associated. An emergency fund can be kept in a low maintenance account such as a savings.

What does an emergency fund look like?

Well, it varies for each individual based on how many are in your household, monthly expenses, and more. However, it is recommended to have about three to six months of monetary value saved for a time of need. This should help one cover basic expenses such as mortgage, food, and other necessities to stay afloat.

Having a financial cushion will help reduce stress and protect you for the next time finances become an issue. In the event that you have to utilize the emergency fund, remember to build it back up slowly and surely for the next time it’s needed.

The Wisconsin Compensation Rating Bureau (WCRB) has established a new unit statistical code for reporting certain payroll for this unprecedented event:

Unit Statistical Code 0012 - Paid Furloughed Workers during a Governmental Emergency Order Impacting Employment

There is a $0.00 rate for this new code, as there is no justification for charging premium based on payroll that creates no workers compensation exposure. 

By definition, a furloughed employee is one who is still being paid where they have been given a temporary layoff, an involuntary leave or another modification of normal working hours for a specified duration.  

Keeping and maintaining accurate, verifiable payroll records will be very important.   If these wages cannot be confirmed and verified, 100% of the wages will be assigned to the employee’s normal classification code. 

For additional information, please view the link to information below, or contact a R&R Commercial Insurance Consultant for more details.

For more information and FAQ's from the WCRB, https://www.wcrb.org/misc/WCRBCovid19.pdf

Personal lines automobile policies do not typically provide coverage for vehicles used for commercial purposes, like food delivery. As a result, in the absence of any other action, many of the anticipated temporary food delivery drivers would be uninsured.

However, it would be impractical and untimely for these drivers to temporarily obtain coverage for this limited purpose. Therefore, the Office of the Commissioner of Insurance (OCI) orders that Insurers shall not deny a claim under a personal auto policy solely because the insured was engaged in delivering food on behalf of a restaurant impacted by the restaurant closure.

This order shall apply to all personal auto policies in effect on or after March 17, 2020, and shall apply to all claims that arise from an occurrence beginning on March 17, 2020. This order shall remain in effect until the public health emergency order is lifted, in whole or in part, to permit restaurants to resume normal operations.

This coverage is not required to be afforded to drivers who otherwise have coverage for deliveries through their personal policy or another policy. This coverage also does not apply to drivers working for a transportation network company or similar delivery company. This coverage is only afforded to delivery drivers who do not have such coverage and this coverage does not stack with any coverage that is currently afforded.

Hired and Non-owned Auto Coverage

It is common for restaurants who employ delivery drivers who use their own car to obtain hired and non-owned auto coverage for liability incurred by those drivers. This is often offered as a rider to a commercial general liability policy. Since many of the restaurants who may begin delivery services did not anticipate the need for this coverage, it is likely that their commercial general liability policy will not include a hired and non-owned auto coverage rider. OCI further believes that it would be impractical and untimely for these restaurants to shop for coverage that includes coverage for non-owned autos.

For these reasons, all insurers who provide commercial general liability coverage to a restaurant to notify their restaurant insureds that hired and non-owned auto coverage is available if requested. If the insured restaurant requests hired and non-owned auto coverage, the insurer shall, either through a rider or stand-alone policy, provide this coverage to any insured restaurant.

This order shall apply to all commercial general liability policies in effect on or after March 17, 2020. The coverage afforded shall be effective upon the date it is requested. Insurers who offer retroactive coverage may request that the insured certify that they have not incurred any potential claims in the period of retroactive coverage. This order shall remain in effect until the public health emergency order is lifted, in whole or in part, to permit restaurants to resume normal operations.

Have questions?  Talk to your agent or contact a KnowledgeBroker.

In this time of great uncertainty, it is more critical than ever for business owners to watch out for cyber-crime.  Unfortunately, criminals are and will be using this time to increase cyber-crime and prey on organizations as more and more people work remotely.

The following steps are simple risk mitigation tools that all organizations can spread to their teams and begin implementing immediately to help lower exposure.  We strongly urge you share these steps internally with your teams and make everyone a part of your cyber security team! 

1. NEVER respond to emails asking for information or log on information from outside of your domain name.
2. Be cautious every time you do enter your username and password to enter your systems and sites.  Criminals will spoof legitimate sites to trick you to log in.  Hover over the link to confirm it’s the intended destination.  
3. Finance departments should physically call and talk on the phone or verify in person, FaceTime etc. that you can absolutely guarantee the financial transaction is not only legitimate to the correct person, correct dollar amount AND correct account number.  Read all of these back with double checks.  
4. When in doubt, see something, say something.  Alert your management team and IT team immediately, if you suspect any mischievous cyber activity.   
5. Activate your Cyber Crime continuity plan or make sure one is being built and in place.  

One IT step to greatly help alert your team and users, if possible.  

• Work with your IT vendor or IT team to implement an “external” email banner/tag on all emails generated from outside of your organization. This is a great security step and tool to use to help mitigate outside actors from tricking or deceiving your employees.  

We are here to help with questions and options during this time!   Stay Safe!  

President Trump signed into law on March 18, 2020 the Families First Coronavirus Response Act requiring employers with 500 or fewer employees to provide emergency paid sick leave and family leave to employees dealing with the impact of COVID-19. Below is a high-level summary of these two components of the Act, which become effective as of April 1, 2020:

Compensation under the new paid sick leave law

Under the new paid sick leave law, employers must pay employees their regular rate of pay if the employee is taking leave for a reason related to their own symptoms of, or exposure to, COVID-19. Employees who are taking leave to care for family members are only entitled to be paid at two-thirds of their regular rate. Daily and total maximum limits apply, per the chart below:

For an in depth look, read more here.

Publish date: 3/20/20 - updated: 4/7/20

There will be few, if any businesses that will emerge from the COVID-19 pandemic without being impacted financially or operationally.  Safe to say, we are in uncharted waters right now as we deal with controlling COVID-19.

The personal health and safety of everyone is paramount and should be our focus right now.  Following the CDC guidance and directives from local, state and federal governments around these vital health protocols is critical to slowing the spread of COVID-19.

People are being asked to severely limit travel, not to eat, drink or gather in restaurants, sporting venues, bars, casinos, not to attend gatherings of over 10 people and all of these restrictive actions are stifling economic activity and negatively impacting businesses of all kinds.  

Will my commercial insurance cover this loss of revenue and expenses?

• These claims are very fact-dependent and will have to be fully investigated by your insurance carrier, before any coverage commitments (acceptance or denial) can be made.
  • The cause of loss will be important. There are numerous causation scenarios, below is partial list of possibilities:
    • Government mandated shut down
    • Government restrictions, including travel, gatherings and curfews
    • A confirmed COVID-19 exposure on site, nearby, and/or in your geographic area
    • The imminent threat of COVID-19 exposure on site, nearby, and/or in your geographic area
    • A supplier fails to deliver product/services or comply with terms of a contract

• You may receive a Reservation of Rights letter, and/or asked to sign a Non-Waiver agreement by your insurance carrier(s).
  • This letter / form allows the insurance carrier to investigate the claim, without waiving any of their rights under the policy to deny coverage (if that is the conclusion) at a later date, when the investigation is complete. 

• Coverage positions (acceptance or denial of your claim) will all vary by the cause of loss, policy forms, endorsements, terms and conditions, and the insurance carrier.  There will be other factors that will be critical to the coverage decision as well.
  
  • There are no broad based statements to be made here. Each policy will have to be fully examined and evaluated, against the facts of the loss and the damages incurred.

There is momentum building for government assistance programs, such as; bridge loans, cash payments, reimbursements, extension of credit deadlines, tax relief provisions, extension of the April 15^th tax filing requirement and free virus-related medical care are among many options being discussed to assist business owners with liquidity issues and to provide incentives to continue to employ staff during this volatile time.  

Record Keeping for COVID-19 Claim Filing and Documentation

It will be important that our clients that suffer economic losses related to COVID-19, keep accurate records during this time. If there are insurance policy recoveries to be claimed and/or government programs to access for assistance, documentation of economic losses and expenses will be required.  

Here are some preparedness steps to take that can enable a smooth, efficient claim process with your insurance carrier:

• Organizing/documenting financial and/or property damages will be required
  1. Keep accurate business records around sales and sales declines from prior periods.  (Income statements, banking records, sales receipts/records)
  2. Keep accurate records around contract cancellations or non-performance, including communications between parties, if any
  3. Keep accurate business records around payroll and employment levels (reduced pay, reduced hours or reduced number of required employees)
  4. Keep an accurate accounting of inventory levels and any inventory that had to be discarded
  5. Keep accurate business records around expenses that are incurred to maintain and support the business to enable it get back up and running, in the event of a loss or partial loss

If you do want to submit a claim for damages, your insurance carrier website will include details on the most efficient way to report the claim. 

R&R Insurance can assist you in the claim process and will advocate on your behalf to ensure the proper determination of coverage is made.

The more organized your claim information and documentation is today, the easier it will be to determine actual losses, covered or uncovered damages later when this pandemic cycles through.  This information will also be useful if government assistance programs are created to help as well.   

For more information, visit MyKnowledgeBroker.com/Resources-for-Businesses

Posted: March 19, 2020

Also commonly referred to as "business interruption insurance", business income insurance covers lost income when your business must shut down due to a covered loss: fire, theft, wind.  Many business owners fail to think about how they would manage if a fire or other disaster damaged their business so they were temporarily out of work.  A few simple calculations can provide the information needed to purchase the proper coverage for an unforeseen loss.

Business Income protection is not like a $1,000 auto deductible.  The impact of BI is extremely important on the business.  A number of companies are out of business in 12-18mn due to a loss.  Many of these companies do not survive due to the financial loss incurred.We ask our customers: How was your BI coverage determined?  "Well, a while ago we had some formula..." or  "I have never filled out a Business Income worksheet..."

Many people think "oh no, the dreaded BI worksheet!"  But it doesn't need to be.  Many of our insurance company partners have a simple online application that will provide a single page summary.  We also have in-house experts that can help you identify the data needed and walk you through the process of completing the worksheet. 

Basic Business Income Worksheet Data Points

Business Income coverage includes, but is not limited to:

• Gross revenue minus non-continuing expense
• Cost of materials
• Ordinary payroll
• Coverage for anticipated duration of loss
• Extra-expense limit

90% of the time "agreed amount" is missed. Why is the agreed amount so important?  It waives the coinsurance clause on the specified property. As long as this endorsement is in effect, there would be no coinsurance penalty at the time of a claim.

Additional Consideration to Business Income Coverage: Extended Indemnity

Business Income coverage ends once a business is back to operating.  However for many companies, they are not operating at 100% on Day 1. Extended Indemnity will provide extra buffer until fully operating.

For example: after a business has been down for 6 months and they're able to begin operating but at 20%, the Business Income coverage ceases.  In steps Extended Indemnity to help cover the non-operating 80% until the business is fully up and running again at 100%.  Depending on the insurance company, this extra buffer range from 30 days, 90 days, 365 days, or beyond.

You've worked hard for all that you have.  Be sure to reduce your risk and protect your lost income due to unforeseen losses.