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5 Ways to Mitigate Risks During Holiday Parties

5 Ways to Mitigate Risks During Holiday Parties

The holidays are here. Thanksgiving, Christmas, New Years and more are some of the best times of the year. They are also some of the most dangerous from an insurance and risk perspective.

See, millions of Americans host family and friends for days and night of joyous celebration during these times. These parties and events often require days upon days of planning, coordination, and more.

Due to the nature of holiday parties, many risks rear their ugly heads during this beautiful time of the year. Many hosts chose to hire vendors to help with the parties and mitigate these risks. This can open a whole other can of worms when your personal liability exposure is taken into account.


5 Ways to Mitigate Risks During Holiday Parties

While thinking about personal liability isn't how to put one in the holiday spirit, there's hope. Here are five easy ways to mitigate risks during holiday parties and limit your exposure:

1. Focus on the Basics

Hosting a large holiday party will require hiring vendors and coordinating the event. However, every single vendor you hire will bring on added risks. To mitigate these risks, you'll need to focus on one fundamental issue. You must make sure every single vendor you work with is bonded, licensed, and insured.

Once you have confirmed these facts, you'll need to understand the details of their insurance coverage. Find out information like:

  • Their carrier
  • Adequate coverage for you event
  • Policy limits
  • References

While you won't be able to talk about a vendor's insurance coverage with a reference, you may get a glimpse into how the vendor responds to a crisis – especially important around the holidays.


2. Get a Contract

Once you found a great vendor to work with, you'll need a signed contract that clearly states the services and functions your selected vendor will provide at the party.

Make sure the contract clearly details dates of services and exact times. Also, it's vital that a contract has a hold harmless clause include. The provision ensures that hosts are not held responsible for damages related to a vendor-related injury or accident.


3. Be Careful with Booze

Holiday parties and booze go hand in hand. “Many a great story” only happened because a holiday party got out of control after the booze started to flow. Still, you need to take a few precautions if you're serving alcohol at your holiday party.

First and foremost – you should only hire a bartending or catering service that insures its staff against any and all booze-related liabilities. This is of the utmost importance.

Next, you need to understand personal liability. It's imperative that you let the bartenders do what they do best – serve drinks. Do not get involved with the pouring of drinks. Bartenders need to card anyone they suspect to be under a certain age during the event. This is the law and will ensure you're not held liable for any underage drinking issues.


4. Pay Attention to Parking

Parking can play a huge role in your holiday party, especially as an event gets larger and larger. Hiring parking attendants or a professional valet service can ensure smooth sailing on the roads during your event. You'll avoid blocking roads, minimize collisions, and ensure the safety of your guests.

As always, you'll need to work with a properly licensed valet company and get a contract in place. Once this is done, you can begin working on a parking plan with the company.


5. Slip & Fall

Finally, you need to pay attention to the weather during your event. With snow, sleet, and ice common in the winter months, you'll need to have a plan in place that gets guests from parking to the party in safety.

To do so - you'll need to prevent slips and falls. Start by removing all ice and snow from any walkway or staircase. Make sure you have salt or sand on hand during the event.

Next, add some additional lighting on walkways to ensure black ice won't sneak up on anyone. Then you'll want to post signage warning guests to pay attention and watch their steps. 

For more information on how to mitigate risk during the holidays contact Skyline Risk Management, Inc. (718) 267-6600

When Bad Things Happen: Product Liability & Foodborne Illness

When Bad Things Happen: Product Liability & Foodborne Illness

Could you image how much work and dedication goes into owning a successful restaurant?

If you're a restaurant owner then you know what it is like to work day after day, year after year, growing your business. For those of you in the midst of growing our business, imagine a day where you reached a point of fulfillment. Picture your restaurant flourishing beyond your wildest dreams. You've hired the right professionals to operate your restaurant and now you've retired. 

Everything is going great and then one day you get a phone call... 55 people are sick with food-borne illnesses, which they got from eating at your restaurant. 

Turns out while you where on vacation in Bali the people you hired to run your business decided to purchase spinach from a new vendor and now you're facing 55 different lawsuits. The media is jumping down your throat and people are very sick. Worse of all, you could have prevented this from happening. Yup, you blew it because you decided to decline insurance coverage, which protected from this exact situation.

Don't think this could happen to you? Ask the owners of Chiptole Mexican Grill what they think about insurance coverage for food-borne illness.


Chipotle

Chipotle's firestorm was about more than one risk. It was about product safety and workplace safety coming together to ignite a chain of sick customers up and down their chain of restaurants. The reports were about norovirus and E. coli making customers sick and the eventual spread that followed.

When employees come to work sick and then touch food and food preparation areas, it really doesn't matter if the food products are all that safe. In fact, the Centers for Disease Control and Prevention (CDC) reports that one in six Americans become ill every year from contaminated food or beverages.

Whether the contamination started in the food supply chain isn't all that important if your employees are ill when they walk in the kitchen door. Loyal employees are gold, but sick loyal employees are like explosives waiting for detonation. Whether you are a Mom and Pop shop or a franchise, you must mitigate the risk.


Trade Name Restoration Coverage

The best answer to the significant financial loss of your  business ill be a Business Interruption/Trade Name Restoration (TNR) policy. The coverages provided in this stand-alone policy go further than your general liability coverage when it comes to saving your client's business from financial devastation.

  • Business Interruption
  • Loss of profits
  • Trade Name Restoration
  • Crisis Management

Contact your insurance professionals at Skyline Risk Management, (718) 267-6600 for information about Business Interruption/Trade Name Restoration (TNR) polices. 

4 Ways to Detect Employee Fraud

4 Ways to Detect Employee Fraud

Employee fraud can be a drain on the bottom line and have serious implications on an organization. According to a recent report from The Association of CertifiedFraud Examiners, the median loss for an employee fraud case is approximately $140,000. More than a fifth of these cases caused losses of at least $1 million, a significant loss for any size company.

Even considering a well-run organization, over 5% of a company’s revenue losses can be attributed to fraud, which is a staggering drain on the bottom line. When employees get away with this type of fraud, a "me too" mentality can take hold leading to an environment of fraud and waste.

What Can you Do?

So then, if you're a senior manager in an organization with a toxic employee fraud problem, what can you do? Setting a culture of honesty is not simple and doesn't happen immediately, but it must happen none the less. If managers are held accountable for fraud in their departments, then it's safe to assume that they will hold their employees accountable as well. The reality of the situation is that people (employees) are fallible, and there is always going to be a few bad apples in the barrel. When managers become responsible for bad apples in their barrel, a number of bad apples begins to dwindle.

Where Fraud Happens

According to the Association Certified Fraud Examiners, the majority of fraud is the result of asset misappropriation, which occurs in the procurement, payment, and expense areas. If the employer begins to closely monitor these areas, the chances are very good that fraud will be discovered and more importantly, reduced. The five areas in which employee fraud normally occurs is:

o   Purchase to Pay - Purchase to pay fraud takes place when an employee creates a purchase order for goods or services that are diverted for their personal. The employee sets up a fake vendor account where fraudulent invoices are processed and then paid to the employee. To prevent this from happening in your organization, never let an employee create and then approve the same purchase order. Instead delegate the responsibility of approval to a different employee forming a system of checks and balances.

o   Payroll  - Payroll fraud usually exists when a phantom employee is set up on the payroll system and typically receives excessive payments for overtime or when the employee remains on the system after being terminated. Testing should be done to evaluate employees with like addresses, invalid social security numbers, and excessive overtime.

o   Sales and Receivables - Employee collusion with vendors and sales reps can lead to unsuspected fraud. Managers should also be on the lookout for customer accounts with unusually high credit limits, frequent credit memos, unusually large discounts, or suspect returns of goods without matching credit memos. Managers should also check for customer shipment addresses corresponding to employee addresses.

o   Critical Data Hacking - Although employers typically safeguard the sensitive data of customers and vendors, they do not typically understand that most organizations are hacked by employees, both current and former. Terminated employees can become a major threat to an organization's sensitive data for the simple reason of getting even with an employer. Logins and passwords should be changed before a terminated employee has left the building rather than a day or two after.

Regretfully, employee fraud threatens every organization and precautions must be put in place. Employee dishonesty coverage should be a key coverage in the organization's insurance policy, but should not replace key testing that can uncover the problems that may exist. If you have questions about employee fraud contact Skyline Risk Management, Inc. at (718) 267-6600 to discuss your concerns. 

 

Three Key Coverage Types every Restaurateur Should Consider

Three Key Coverage Types every Restaurateur Should Consider

restaurants.jpg

As a restaurant owner, you certainly know the basic insurance coverage your business needs - like protecting the building, your property in the building, and workers' compensation. In the marketplace today, however, there are many additional risks that could financially threaten your restaurant that you may have not considered or are even aware of. 

1.      Theft and Employee Dishonesty - Most Business Owner Policies provide coverage for Burglary in your restaurant. However, a burglary incurs when there is evidence of breaking and entering, but a theft does not. Many policies will exclude coverage for theft even when an alarm system is present. The restaurateur should always inquire if theft is a covered peril, and if not, ask for an endorsement to add it to the policy. On the other hand, many theft claims end up being perpetrated by one or more employees in the restaurant. In the event of a theft by an employee, the restaurant's Business Owners Policy will need an endorsement for Employee Dishonesty to make sure there is coverage in place in the event of a loss. 

2.      Employment Practices Liability Insurance (EPLI) - Most Business Owners Policies include coverage for EPLI, but typically for a lower amount than the General Liability limit. Any business who has employees, former employees, or people that have been interviewed, but not hired, is at risk of being sued for discrimination, sexual harassment, unpaid or underpaid wages, or mishandling employee retirement benefits. Terminated employees are usually quick to bring actions for wrongful termination and people you interviewed but didn't hire may accuse you of discrimination rather that admit they were unsuitable for the job. Your EPLI policy will provide coverage for the costs of defending you in a lawsuit, settlement fees, or judgments awarded by the court. 

Even though the majority of discrimination and sexual harassment cases are found to be without merit, an action must still be responded to by an experienced attorney, which can certainly be a drain on the resources of the restaurant.  

3.      Cyber Liability - In today's marketplace, every restaurant is connected to the internet either by wire or wireless. It takes about a second to get hacked and before you know it, countless credit card transactions can become the property of the hacker. Most jurisdictions provide that your restaurant must provide notice to all customers at risk as well as paying for the cost of credit monitoring service if you are found to be liable. Your hacker isn't necessarily working from his parent's basement in a house down the street; in most cases the hacker is part of a sophisticated syndicate in another country, working diligently to steal sensitive information from U.S. businesses. Your hacker may also be a terminated employee looking for revenge. In any case, having Cyber Liability Insurance will provide the protection needed when your files are hacked and the expenses begin to accumulate.

Often times, especially in the scenarios previously mentioned, you don't find out that your insurance isn't comprehensive until it's too late. Isn't it time to review your coverage with an experienced professional to make certain your insurance gaps are filled with the proper coverage? Give us a call and we'll be glad to review your current policies and help you make certain that you have transferred your everyday risks to a highly-rated insurance company at an affordable price.