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Protect Your Key Assets with Key-person Life Insurance

Part of the series provided by Chalmers Insurance Group

Most organizations employ at least one individual who is essential to the company’s success. This person may be a partner, majority stockholder or an individual with expertise that’s unmatched throughout the rest of the company. If this person’s exit from the company is planned, such as through retirement or voluntary termination, then you can prepare for the loss and take the necessary precautions to minimize the impact.

However, if the departure is unplanned due to a death, disabling accident or sudden resignation, then the company is exposed to financial risks. If your organization employs individuals who are vital to its success, consider key-person life insurance to offset your risk. This coverage can protect your organization’s solvency in the event that you lose the key person or people without warning, and also the investments made by lenders and investors to the company.

How Does Key-person Life Insurance Work?

It’s important to know how key-person life insurance works while you consider if it’s the right fit for your company:

  • The employer purchases key-person life insurance on the key individual(s).
  • The employer is the beneficiary of the policy and applies for and owns the coverage. If the key employee dies prematurely, the policy pays out to the employer.
  • In some cases, IRS guidelines allow for tax-free dollars from the policy to be put towards finding, hiring and training a replacement employee, compensation for lost business during the transition, and financing timely business transactions.
  • Depending on the specific language in the policy, it can sometimes be transferred to a departing key employee as a retirement benefit.
  • The policy can be used to buy out the key employee’s shares or interest in the company.
  • Premiums are based on several factors, including the key employee’s age, physical conditions and health history. The amount of coverage also affects the premium.

Advantages of Key-person Life Insurance

Key-person life insurance has a number of advantages that can help mitigate your company’s risks:

  • Policies can be easily implemented and don’t require IRS approval. Your business only needs to prepare an annual report for the IRS.
  • If all IRS guidelines are followed, the policy’s benefits may be paid to the company tax-free.
  • Customers, creditors, lenders and stockholders have the assurance that the business has a continuation plan and coverage in place.
  • There’s flexibility when using funds paid by the policy.

Considerations before Purchasing Key-person Life Insurance

The following points should be considered before purchasing key-person life insurance:

  • Estimate the value of your key employees. Think about the projects that would be lost without these people, the amount of sales generated by these people and costs associated with replacing them.
  • Determine if this coverage is necessary, as credit insurance will cover outstanding loans and debts.
  • Create a business continuity plan that outlines how your business will function if you lose key employees.

Chalmers Insurance Group understands that your key assets need protection and we’re here to assist you. Please contact us today at 800-360-3000 to learn more about our key-person life insurance solutions and other ways to mitigate your risks.

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10 Cyber Security Resolutions to Reduce Your Data Exposures

Part of the series provided by Chalmers Insurance Group

Cybersecurity threats and trends can change year over year as technology continues to advance. As such, it’s critical for organizations to reassess their data protection practices at the start of each new year and make achievable cybersecurity resolutions to help protect themselves from costly breaches.

The following are resolutions your company can implement to avoid becoming the victim of a cybercrime:

  1. Provide security training—Employees are your first line of defense when it comes to cyber threats. Even the most robust and expensive data protection solutions can be compromised should an employee click a malicious link or download fraudulent software. As such, it’s critical for organizations to thoroughly train personnel on common cyber threats and how to respond. Employees should understand the dangers of visiting harmful websites, leaving their devices unattended and oversharing personal information on social media. Your employees should also know your cybersecurity policies and know how to report suspicious activity.
  2. Install strong anti-virus software and keep it updated—Outside of training your employees on the dangers of poor cybersecurity practices, strong anti-virus software is one of the best ways to protect your data. Organizations should conduct thorough research to choose software that’s best for their needs. Once installed, anti-virus programs should be kept up to date.
  3. Instill safe web browsing practices—Deceptive and malicious websites can easily infect your network, often leading to more serious cyber-attacks. To protect your organization, employees should be trained on proper web usage and instructed to only interact with secured websites. For further protection, companies should consider blocking known threats and potentially malicious web pages outright.
  4. Create strong password policies—Ongoing password management can help prevent unauthorized attackers from compromising your organization’s password-protected information. Effective password management protects the integrity, availability, and confidentiality of an organization’s passwords. Above all, you’ll want to create a password policy that specifies all of the organization’s requirements related to password management. This policy should require employees to change their password on a regular basis, avoid using the same password for multiple accounts and use special characters in their password.
  5. Use multi-factor authentication—While complex passwords can help deter cybercriminals, they can still be cracked. To further prevent cybercriminals from gaining access to employee accounts, multi-factor authentication is key. Multi-factor authentication adds a layer of security that allows companies to protect against compromised credentials. Through this method, users must confirm their identity by providing extra information (e.g., a phone number, unique security code) when attempting to access corporate applications, networks, and servers.
  6. Get vulnerability assessments—The best way to evaluate your company’s data exposures is through a vulnerability assessment. Using a system of simulated attacks and stress tests, vulnerability assessments can help you uncover entry points into your system. Following these tests, security experts compile their findings and provide recommendations for improving network and data safety.
  7. Patch systems regularly and keep them updated—A common way cybercriminals gain entry into your system is by exploiting software vulnerabilities. To prevent this, it’s critical that you update applications, operating systems, security software, and firmware on a regular basis.
  8. Back up your data—In the event that your system is compromised, it’s important to keep backup files. Failing to do so can result in the loss of critical business or proprietary data.
  9. Understand phishing threats and how to respond—In broad terms, phishing is a method cybercriminals use to gather personal information. In these scams, phishers send an email or direct users to fraudulent websites, asking victims to provide sensitive information. These emails and websites are designed to look legitimate and trick individuals into providing credit card numbers, account numbers, passwords, usernames or other sensitive information. Phishing is becoming more sophisticated by the day, and it’s more important than ever to understand the different types of attacks, how to identify them and preventive measures you can implement to keep your organization safe. As such, it’s critical to train employees on common phishing scams and other cybersecurity concerns. Provide real-world examples during training to help them better understand what to look for.
  10. Create an incident response plan—Most organizations have some form of data protection in place. While these protections are critical for minimizing the damages caused by a breach, they don’t provide clear action steps following an attack. That’s where cyber incident response plans can help. While cybersecurity programs help secure an organization’s digital assets, cyber incident response plans provide clear steps for companies to follow when a cyber event occurs. Response plans allow organizations to notify impacted customers and partners quickly and efficiently, limiting financial and reputational damages. This can be costly but cyber insurance can help.

Talk to your Chalmers account manager for more information about cyber 800-360-3000.

Personal Automobiles for Business Use

Part of the series provided by Chalmers Insurance Group

According to the U.S. Census Bureau, there are more than 240 million registered motor vehicles in the United States, and an estimated one-fourth of those are used for business in some way. If you have employees who use personal vehicles for business use, you could be exposing your business to a significant liability risk.

Even if your employees have Personal Auto Policies (PAPs) for their personal vehicles, in the event of a serious accident that occurs during business use, your business could be sued to collect additional damages.

Hands on the wheel

What is “Business Use”?

Activities that constitute general business use include visiting customers, picking up supplies, attending conferences, and commuting to and from work. For activities like this, the general business use of a personal vehicle is usually covered by a PAP. This is because a policy purchased for a specific vehicle is considered the primary insurance, which covers damages before any other policy takes effect.

An exception to general business use is livery, or carrying goods or people for a fee. Livery includes the delivery of items such as food, flowers, or wholesale or retail items to customers, as well as chauffeur services. Carpooling or ridesharing is not considered livery and is covered under a PAP.

Employees that work from home can still pose a risk if they use personal vehicles for business use. It may be more difficult to ascertain the driving habits of employees that work from home or the operational status of their vehicles. Communicate regularly with these employees concerning your company’s policy for the use of personal vehicles.

Employee PAP Coverage

For employees using their personal vehicles, the primary insurance on the vehicles will likely be their PAPs. You should know how your employees are covered for the business use of their vehicles. Encourage your employees to speak with their PAP carriers to be sure of their coverage and to make it clear to the insurance agents what business activities the vehicles may be used for.

Some PAPs appear to exclude coverage for business use, but they may include broad exceptions for a private passenger automobile, or pickup trucks and vans. However, some policies may be stricter depending on the circumstances. Clarification may prevent complications if a claim must be filed.

Four Ways to Reduce Risk

Though employees’ use of personal automobiles may pose a risk to your business, there are steps you can take to help protect both your employees and your business from liability.

  1. Review driving records and create an approved-driver list: All employees that use a vehicle for business use should be cleared to drive by a manager. This process should include reviewing motor vehicle records and PAP coverages regularly and maintaining records to help reduce risk exposure.
  2. Establish standards for personal vehicles: Even employees without any incidents on their motor vehicle records can be a risk to your business if they are driving personal vehicles that are not properly maintained. Establish company guidelines for maintaining personal vehicles. If employees are compensated for time spent driving or if they routinely use their personal vehicles for business, consider regularly collecting maintenance reports to gauge the reliability of personal vehicles.
  3. Make the company policy clear: After you create guidelines for the use of personal vehicles at your business, be sure to communicate them to your employees in a clear and timely manner. Although it is common to have policies against the use of intoxicating substances or mobile devices while driving, reminding employees of all of your company policies is an effective way to mitigate risk.
  4. Establish rental vehicle policies: The use of rental vehicles for business also presents exposure to risk. It may be beneficial to establish a relationship with a particular rental vehicle agency to determine which vehicles best suit the needs of your business and employees while traveling. You should also give your employees guidelines on which rental vehicle insurance coverages to accept during the rental process.

Obtaining Appropriate Liability Insurance

Additional coverage may be needed if any potential risks from personal auto use threaten your business. A standard Business Auto Policy (BAP) will protect your business from any additional liability after an employee’s PAP has paid for damages related to personal auto use.

Although employees who have personal vehicles should be required to have PAPs, obtaining liability insurance should be a priority to protect your business. In the event of a serious accident, your employees’ PAP coverage may not be adequate to pay for all the damages. Be sure to prepare a list of vehicles that may be used by employees and the type of business they may be used for, and contact Chalmers Insurance Group 800-360-3000 in order to discuss your coverage options.

Cyber Liability Insurance

Part of the series provided by Chalmers Insurance Group

As technology becomes increasingly important for successful business operations, the value of a strong cyber liability insurance policy will only continue to grow. The continued rise in the amount of information stored and transferred electronically has resulted in a remarkable increase in the potential exposures facing businesses. In an age where a stolen laptop or hacked account can instantly compromise the personal data of thousands of customers, or an ill-advised post on a social media site can be read by hundreds in a matter of minutes, protecting yourself from cyber liability is just as important as some of the more traditional exposures businesses account for in their general commercial liability policies.

Why Cyber Liability Insurance?

A traditional business liability policy is extremely unlikely to protect against most cyber exposures. Standard commercial policies are written to insure against injury or physical loss and will do little, if anything, to shield you from electronic damages and the associated costs they may incur. Exposures are vast, ranging from the content you put on your website to stored customer data. Awareness of the potential cyber liabilities your company faces is essential to managing risk through proper coverage.

Possible exposures covered by a typical cyber liability policy may include the following:

  • Data breaches: Increased government regulations have placed more responsibility on companies to protect clients’ personal information. In the event of a breach, notification of the affected parties is now required by law. This will add to costs that will also include security fixes, identity theft protection for the affected and protection from possible legal action. While companies operating online are at a heightened risk, even companies that don’t transmit personal data over the internet, but still store it in electronic form, could be susceptible to breaches through data lost to unauthorized employee access or hardware theft.
  • Intellectual property rights: Your company’s online presence, whether it be through a corporate website, blogs or social media, opens you up to some of the same exposures faced by publishers. This can include libel, copyright or trademark infringement and defamation, among other things.
  • Damages to a third-party system: If an email sent from your server has a virus that crashes the system of a customer, or the software your company distributes fails, resulting in a loss for a third party, you could be held liable for the damages.
  • System failure: A natural disaster, malicious activity or fire could all cause physical damages that could result in data or code loss. While the physical damages to your system hardware would be covered under your existing business liability policy, data or code loss due to the incident would not be.
  • Cyber extortion: Hackers can hijack websites, networks and stored data, denying access to you or your customers. They often demand money to restore your systems to working order. This can cause a temporary loss of revenue plus generate costs associated with paying the hacker’s demands or rebuilding if damage is done.
  • Business interruption: If your primary business operations require the use of computer systems, a disaster that cripples your ability to transmit data could cause you, or a third party that depends on your services, to lose potential revenue. From a server failure to a data breach, such an incident can affect your day-to-day operations. Time and resources that normally would have gone elsewhere will need to be directed towards the problem, which could result in further losses. This is especially important as denial of service attacks by hackers have been on the rise. Such attacks block access to certain websites by either rerouting traffic to a different site or overloading an organizations server.

Cyber liability insurance is specifically designed to address the risks that come with using modern technology; risks that other types of business liability coverage simply won’t. The level of coverage your business needs is based on your individual operations and can vary depending on your range of exposure. It is important to work with an agent who can identify your areas of risk so a policy can be tailored to fit your unique situation.

As reliance on technology continues to increase, new exposures continue to emerge. As your business grows, make sure your cyber liability coverage grows with it. Chalmers Insurance Group is here to help you analyze your needs and make the right coverage decisions to protect your operations from unnecessary risk 800-360-3000.

All About Automobile Policy Coverage

Part of the series provided by Chalmers Insurance Group

An automobile insurance policy is designed to provide you with a level of protection against property, liability and medical costs if you are involved in a wreck:

  • Property coverage pays for damage to or theft of your car.
  • Liability coverage pays for your legal responsibility to others for bodily injury or property damage. Most other states require car owners to purchase a minimum of bodily injury and property damage liability insurance.
  • Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

Comprehensive and Collision Coverage

Collision: Covers damage to your car when your car hits, or is hit by, another vehicle or other object. This coverage is not required by a state, but if you have a loan or a lease, then the lien holder will require it.

Comprehensive: Covers your vehicle, and sometimes other vehicles you may be driving, for losses resulting from incidents other than collision. This coverage is not required, but a lender may insist that you carry it until your loan is paid off.

Types of Liability Coverage

Bodily injury liability (BI): This covers injuries that you, the designated driver or policyholder cause to someone else. It does NOT cover the cost of damage to your vehicle, or to you or other people on your policy. It is mandatory in most states.

Property damage liability (PD): Covers you or someone driving the car with your permission if the car damages someone else’s property. It also provides you with legal defense if another party files a lawsuit against you.

Medical payments (MP) or personal injury protection (PIP): This no-fault coverage provides medical expenses to you and your passengers injured in an accident.

Uninsured and underinsured motorist coverage (UM or UIM):  This coverage will reimburse you if of you are hit by an uninsured or hit-and-run driver or when an at-fault driver has insufficient insurance to pay for your total loss.

Top Ways to Save on Your Auto Premium:

  • Consider raising your deductible.
  • Keep up your good driving record.
  • Drive a car with safety features such as anti-lock brakes and airbags.
  • Install an anti-theft device.
  • Ask about our multi-policy discounts.

We’re Here to Help

Did you know that you need specific coverage when vehicles are used for business use? Or that ride-share and taxi services are usually excluded under personal insurance? Call Chalmers Insurance Group today at 800-360-3000 to learn more about all of our automobile insurance and risk management solutions.

Business Owners Policy Business Insurance

Part of the series provided by Chalmers Insurance Group
The Importance of Insurance and How it Can Protect Your Finances

Business owners have a lot to consider when choosing insurance that fully protects their business. One coverage option, a business owners policy (BOP), can take the guesswork out of the process. A BOP bundles several types of coverage in one package, similar to the way a homeowners policy works, but is designed for small and midsized businesses.

BOP Key Features

A BOP generally combines the following types of coverage in one convenient bundle:

  • Commercial property insurance—Covers losses to property from common perils. It also covers office equipment, furniture, inventory, machinery, raw materials, computers and anything else that is vital to business operations.
  • General liability insurance—Covers a company’s legal responsibility for any harm it may cause to others, up to the policy limit. It also covers attorney fees and medical bills for anyone injured by the company.
  • Business interruption insurance—Reimburses for loss of income if a covered disaster interferes with the successful operation of the business.

Exclusions

Although a BOP is a convenient insurance option for small to midsized business owners, it does not cover professional liability, auto insurance, or workers’ compensation. Life, health and disability coverage is also excluded. For those exclusions, business owners can purchase separate insurance policies. Other examples include the following:

  • Crime coverage—Although it is minimal, crime coverage can be added to a BOP to cover losses as a result of crime, such as employee dishonesty and computer fraud. Typical crime coverage ranges between $1,000 and $5,000.
  • Data breach coverage—This coverage is commonly added to BOPs to help remedy the following losses resulting from data breaches:
    • Notifying impacted individuals
    • Hiring crisis communication consultants
    • Defense and settlement costs from associated lawsuits
    • Replacement of lost income
    • Extortion and ransom payments

Errors and omissions (E&O) coverage—Businesses that provide services for a fee can be sued by customers who claim that they were harmed because the business failed to perform its job properly. E&O coverage pays for any judgment for which the insured is found legally liable, up to the policy limit. It also covers legal defense costs.

Ideal Candidates for a BOP

Businesses that have the following characteristics are ideal candidates for a BOP:  

  • Operate in a physical location, whether home-based or outside the home
  • Have assets that can be stolen, including products, cash, furniture and digital property
  • Are at a high risk for lawsuits
  • Employ less than 100 employees and have less $5 million in sales

The following types of businesses frequently purchase BOPs to protect from losses not covered by general liability insurance:

  • Manufacturers
  • Religious organizations
  • Apartments
  • Restaurants
  • Technology consultants and solutions providers
  • Wholesalers
  • Retailers

Eligibility

Small to midsized businesses need to meet specific criteria to be eligible for a BOP. When determining eligibility, insurers consider factors that include the type of business, size of its primary location, class of business and revenue.

Premiums for BOP policies are based on eligibility factors, as well as financial stability, building construction, security features and fire hazards.

When purchasing business insurance, it is important to obtain the right amount. Contact Chalmers Insurance Group for guidance as to whether a BOP is a logical choice for your business 800-360-3000.

Chalmers Insurance Group Passes the Torch to the Next Generation

It is with great enthusiasm and excitement that Chalmers Insurance Group announces Bruce and Bill Chalmers have transferred ownership of the Chalmers Insurance Group to the fourth generation of Chalmers family members, Jim Chalmers and Dottie Chalmers Cutter, effective January 1, 2018.

Bill and I proudly leave the Chalmers Insurance Group in the hands of a Leadership Team that has largely been together since 2014 and eighty-six co-workers who each day carry on the 160-year tradition of providing quality insurance products and financial security to our community-based neighbors with personal and friendly service,” said Bruce Chalmers.

Our transition to the fourth generation has been carefully planned to set a balance for our entire family. Bruce and I are very proud of the end results and look forward to mentoring when asked. We are confident in Jim and Dottie’s abilities as leaders, combined with the experience, vision, and expertise of Steve Cote, President, to take Chalmers Insurance Group into the future and hopefully into the hands of the 5th generation,” said Bill Chalmers. 

The Chalmers brothers have worked side-by-side in this widely – respected family business for 44 years, cultivating impressive growth and sustained triumph through building strong relationships, making strategic acquisitions and actively supporting their communities and causes for which they are passionate. I am forever grateful for the life and business lessons learned through the words and actions of Bruce and Bill,said Steve Cote.

Bruce and Bill will assume new roles as valued Directors and Mentors (and, of course, continue as great dads!) Jim and Dottie are proud and honored to embrace a rare opportunity to steward their family’s organization to the 5th generation.

This is an exciting time to be in Insurance and to own and operate a business. Our industry and consumer demands are more diverse and complicated than ever before. Future success requires mindful planning and fearless execution – adapting to new times and differentiating from the competition in meaningful ways that bring value to all relationships. We are privileged to partner with our management team and co-workers to address these challenges head on – to support a more innovative and engaging workplace and offer a more interactive and resourceful risk management experience for our clients. We are most thankful to our dads for a tremendous opportunity and for their trust in us to take this great family-owned and operated business into the future,” said Dottie and Jim.

Chalmers Insurance Group:
Proud of our history. Excited for our future.

Chalmers Insurance Group thanks their clients and carrier partners for their loyalty and partnership and are most pleased to share their exciting news with you.

Safeco Insurance® honors Chalmers Insurance Group with membership in the Safeco® Premier Partner Program

Chalmers Insurance Group has been selected for membership in the Safeco Premier Partner Program, which recognizes the outstanding achievement and partnership of only the best agencies.

Fewer than 10% of independent insurance agencies that sell Safeco personal lines products receive this distinguished honor.

At Chalmers Insurance Group we are pleased to be among the top agencies in the country!

As a member in the Safeco Premier Partner Program, we will receive access to special resources and programs that support us in serving our customers.

We strive to provide our customers with trusted guidance, so this Safeco honor makes us proud.

To work with Chalmers Insurance Group please call 800-360-3000 or get a quote at ChalmersInsuranceGroup.com

Shop Locally and Support Small Businesses with Chalmers Insurance Group

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As a local business committed to expert insurance guidance and personalized service,

Shopping in North Conway Village, NH
Shopping in North Conway Village, NH

Chalmers Insurance Group would like to promote National Small Business Saturday. When the big box stores are racking in on Black Friday, small businesses are waiting for Saturday. Support your local small businesses on Saturday November 30th during the National #ShopSmall event. When your dollar goes to your neighbor it goes to businesses who help revitalize your culture and structure your community. Get marketing materials here.

Add your business to the American Express Small Saturday Map by November 4th 
by contacting teastwood@chalmersinsurancegroup.com

We wish all of our local businesses the best this holiday season! Follow Chalmers @ChalmersGroup or find us on facebook for current updates.