Workplace violence touches upon multiple lines of insurance. Employers require coverage.
Today's article comes to us from guest blogger Mr. Angelo Gioia, an expert in the insurance industry, who addresses this question along with risk mitigation, workplace violence and the importance of prevention.
Angelo J. Gioia
Here's what Angelo had to say:
Workplace violence is one of the most frightening exposures business must face. Such an event can devastate a company, destroying its bottom line and even threatening its survival.
If an employee is fired, reprimanded or humiliated in the workplace, they may feel like they have nothing left to lose. So they may decide that the only course of action is to attack their workplace.
More often than not, the employer does not see it coming. A violent incident explodes in the workplace and, in the worst cases, causes the kinds of tragedies including death that lead to front-page headlines. One just needs to read their morning paper or turn on the network news to hear about another incident with respects to workplace violence.
Business owners, have both a legal duty and a moral obligation to provide a safe work environment. Their business practice should include ways to identify potential issues and prevent the occurrence of violence, avoid the loss of life and injuries to your employees, but also include plans to respond to and mitigate further damage after an accident occurs.
In most workplaces, the risk factors and potential causes of loss can be prevented if an employer implement the appropriate precautions and safeguards.
Any act of workplace violence can result in employee injury and or death, business interruption, property damage and reputational damage.
Therefore it is essential every company in addition to implementing processes and procedures to identify, avoid and mitigate potential Workplace Violence situation that they also take a closer look at the current insurance policies they have versus what they may need in the event of a Workplace Violence incident.
Depending on the number of employees, scope and type of business (retail, commercial, professional) it is possible that a corporation or business entity may only have the minimum and or mandatory coverages necessary to operate their business. Also, companies must consider that depending upon their type of business and method of their operations, that they may have a more significant exposure and increase risk to Workplace Violence incident if they are involved with:
Financial and other institutions that require the frequent exchange of money
Retail or hospitality
Healthcare and education
Protective services (police, fire)
Jobs or establishments that involve late-night work
Delivery workers or workers who work alone and in remote locations
Plans to reduce its workforce
Outsource functions or hire temporary help.
Common Types of Insurance Business Need To Purchase:
Workers’ compensation insurance - Once an employer hire his the first employee, workers’ compensation insurance would be one of the first types of insurance to a business’s owner insurance portfolio. Coverage will provide medical treatment, disability, and death benefits in the event an employee is injured or dies. While Workers Compensation policies cover on-the-job injuries, they exclude coverage for acts of lethal force or the threat of force. That means you need separate insurance coverage to protect you against the aftermath of workplace violence.
Property insurance - Whether a business owns or leases its space, property insurance is a must. This insurance covers equipment, signage, inventory, and furniture in the event of a fire, storm or theft. However, events like floods and earthquakes not covered under standard property insurance policies.
General Liability Insurance - Every business needs to have liability insurance. The policy provides both legal defense and damages if you or your employees cause or are alleged to have caused BI (bodily injury) or PD (property damage) to a third party.
Business interruption insurance - If a disaster or catastrophic event does occur, a business’s operations will likely be interrupted. During this time, your company will suffer from lost income. This type of insurance is especially applicable to companies that require a physical location to do business, such as retail stores. Business interruption insurance compensates a company for its lost income during these events.
Product liability insurance - If your business manufactures products for sale on the general market, product liability insurance is a must. Even a company that takes every measure possible to make sure its products are safe can find itself named in a lawsuit due to damages caused by one of its products. Product liability insurance works to protect a business in such a case, with coverage available to be tailored specifically to a specific type of product.
Business owner’s policy (BOP) - A business owner policy packages all required coverage a business owner would need. Often, BOP’s will include business interruption insurance, property insurance, vehicle coverage, liability insurance, and crime insurance. Based on your company’s specific needs, you can alter what is provided by a BOP. Typically, a business owner will save money by choosing a BOP because the bundle of services often costs less than the total cost of all the individual coverage’s.
Commercial Auto Insurance - Commercial auto insurance protects a company’s vehicles. You can insured vehicles that carry employees, products or equipment. With commercial auto insurance, you can cover all of your work cars, SUVs, vans and trucks from damage and collisions. If you do not have company vehicles, but employees who drive their vehicles on company business you should have non-owned auto liability to protect the company in case the employee does not have insurance or has inadequate coverage.
Additional Coverages A Business May Consider to Purchase:
Health Insurance - An Employer responsibility for providing health benefits to their employees will depend on the number of full-time equivalent employees (FTE) your business has. A full-time employee works an average of at least 30 hours of per week. The proposed rule states that a FTE employee working 130 hours in a calendar month satisfies the 30 hours of work per week requirement.
The health care law does not require employers to provide health insurance for their employees. However, employers with 50 or more full-time employees that do not offer health coverage, offer protection that is unaffordable, or offer coverage that does not meet a minimum value standard will be subject to fees beginning January 1, 2014.
Professional Liability Insurance - This type of insurance is also known as E &O Insurance. The policy provides defense and damages for failure to or improperly rendering professional services. General Liability policy does not offer this coverage. Professional liability insurance is applicable for any professional firm including lawyers, accountants, consultants, notaries, real estate agents, insurance agents, and technology providers to name a few.
Directors and Officers Insurance - This type of insurance protects the directors and officers of a company against their actions that affect the profitability or operations of the business. If a director or officer of your company, as a direct result of their actions on the job, finds him or herself in a legal situation, this type of insurance can cover costs or damages lost as a result of a lawsuit.
Data / Cyber Breach - If the business stores sensitive or non-public information about employees or clients on their computers, servers or in paper files they are responsible for protecting that information. If a breach occurs either electronically or from a paper file a Data Breach policy will protect against the loss or a ransomware attack.
Employment Practice Liability Insurance - EPLI protects your company against employment-related claims filed by employees. It covers claims based on allegations of harassment, discrimination, wrongful termination and similar acts. EPLI coverage is a type of professional liability insurance.
We live in a nation where risks and dangers continue to evolve. Unfortunately, workplace violence incidences are now becoming more commonplace and threatens to impact businesses ability to function and being able to offer their employees a safe work environment. Businesses must become more assertive in identifying what their vulnerability are to this exposure. More importantly, in addition to purchasing workplace violence insurance, they must also recognize the need to use risk management tools as one of their resources to efficiently deal with the issues related to workplace violence. Insurance Companies now realizes this and are now providing insurance protection and services resulting from workplace violence incidents.
The expense a business can incur in the aftermath of a workplace violence incident is often staggering and unforeseen, and depending on the size, type, and type of business they may not have all the necessary coverages needed. Unexpected expenses can stem from crisis management, security, employee counseling, public relations, and salaries for victim employees and cost for replacement employees, medical care and rest and rehabilitation for employees, and loss of business income.
Recovering from an incident of workplace violence is difficult, time-consuming and could have long-term financial and reputation repercussions. Therefore it is critical as a business owner when discussing this topic with their Broker or Agent that they have:
Thoroughly analyzed and evaluated their business and have identify all of their exposures,
That they have developed and implemented the necessary safeguards, precautions and education programs, and finally
Have purchased the required insurance coverage. By having the right insurance in place, a business can avoid a significant financial loss due to a lawsuit or catastrophic event. It is essential that every business owner check with their Broker or Agent to find out what forms of insurance are available for their type of business.
Angelo J. Gioia is an experienced insurance executive and author with 40 years expertise, with a record of providing business leadership, developing and implementing strategic service plans, increasing efficiencies, reducing costs, increasing revenue, improving customer satisfaction and building high performing teams. Gioia has a degree from The College of Insurance (now St. John's University School of Insurance and Risk Management), and is a nationally recognized Professional Liability Expert, publisher, author, and founder of PLUS & AgentsofAmerica.ORG.
Professional Liability Underwriting Society (PLUS), established in 1986, is one of the largest professional insurance organizations in the world, with a membership exceeding 7,000.
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