Chapter 3: Managing Risk PDF

# Chapter 3: Managing Risk Include coverage for only vehicles owned, vehicles owned, leased or hired, and for all automobiles, including those not owned, leased, or hired. ## Burglary and Theft Insurance Burglary and theft insurance covers loss or damage by burglary, theft, larceny, robbery, forg...

# Chapter 3: Managing Risk Include coverage for only vehicles owned, vehicles owned, leased or hired, and for all automobiles, including those not owned, leased, or hired. ## Burglary and Theft Insurance Burglary and theft insurance covers loss or damage by burglary, theft, larceny, robbery, forgery, fraud, and vandalism. However, this type of insurance generally does not cover employee acts. A fidelity bond or employee theft insurance is used to cover criminal acts of burglary and theft by employees. ## Key Person Disability Life Insurance Key person insurance, also called key man insurance, is life or disability insurance that a business carries on its core employees. This type of coverage is beneficial if your company depends on specific individuals for continuing success of your business. For example, if your legal structure is a partnership, the success or ongoing existence of the company would not continue if one of the partners died or became incapacitated. Key person insurance is available as life insurance, disability insurance, or both. ## Coverage Gaps and Overlaps It is important to understand the coverage that each of your policies provides. You must be aware of gaps and overlaps that may exist between policies. Differences in coverage can cause difficulties in claim settlement, particularly when a claim falls in the gray area between coverages. For example, if a claim involves both an automobile and property, there may be a conflict between which policy covers the damage. To minimize these conflicts, you may want one insurer for all policies. If you have overlapping coverage, make sure that each policy has fairly equal reimbursement levels. This will ensure that you receive equal coverage if more than one policy covers a claim. Carefully evaluate your risk management program and supplement it with the appropriate insurance coverage. ## Employment-Related Insurance ### Workers' Compensation Insurance Workers' compensation insurance provides coverage for employees who are injured on the job. The insurance is purchased by the employer; no part of it should be paid for by employees or deducted from their pay. Chapter 10, Employee Management, covers workers' compensation insurance in more detail. **Follow the Law...** Workers' compensation insurance coverage may be required by law for your business. It is 100 percent employer-paid and premiums cannot be deducted from the employee's pay. Employer's liability insurance can be purchased to supplement your workers' compensation insurance in the event you are sued for negligence as a result of an employee injury or death. ### Unemployment Insurance Unemployment insurance (UI) programs provide unemployment benefits to eligible workers who become unemployed through no fault of their own and meet certain other eligibility requirements. This program is jointly financed through federal and state employer payroll taxes (federal/state UI tax). Generally, employers must pay both state and federal unemployment taxes if: - They pay wages to employees totaling $1,500 or more in any quarter of a calendar year - They had at least one employee during any day of a week during 20 weeks in a calendar year, regardless of whether or not the weeks were consecutive Chapter 10, Employee Management, covers unemployment insurance in more detail. ### SUTA Dumping: State Unemployment Tax Act (SUTA) dumping is a transfer of employees between businesses for the purpose of obtaining a lower unemployment compensation tax rate. SUTA dumping is prohibited and subject to criminal and/or civil penalties according to state law. The state agency responsible for the state unemployment program