by Juliane Rees | Sep 19, 2023 | Industry News
Protector Plans Executive Liability has launched a primary product offering. The Protector Plans Executive Liability insurance program now offers D&O liability, employment practices liability, fiduciary liability, employed lawyers, crime and miscellaneous professional liability coverage for private and not-for-profit risks. Coverage is available for risks up to $750 million in revenue and assets or 2,500 employees with limits up to $5 million per coverage section.
Backed by an insurance carrier with an AM Best Rating of A XV, all coverage includes duty to defend, no hammer clause and non-rescindable coverage. Coverage enhancements designed specifically for professional firms and healthcare are also available.
Professional Plans Executive Liability supports dozens of industries, including oil and gas, healthcare, hospitality/restaurants, technology, software, consulting, engineering, biotech/pharma and more. When it comes to Miscellaneous Professional Liability, the program specializes in advertising services, event planning services, medical billers, printers, property management, travel agents and fulfillment firms.
Jeffrey S. Grange, president of Protector Plans’ Tampa Programs division, stated, “The addition of the primary product offering supports Protector Plans’ vision to be the leading preeminent full-service delegated underwriting platform for specialty lines in the MGA/MGU channel. We provideproprietary insurance products and solutionstailored to the risk management needs of ourcustomers as a talent-led organization committed to specialization.”
Working with the Protector Plans brands provides customers access to custom insurance solutions for commercial and retail products, extensive underwriting knowledge and fast quote turnaround. We work to simplify the insurance experience, build trust and reduce uncertainty. Protector Plans’ website will be updated regularly with news, blogs, business activity, new product offerings and events. For a full list of policy features and coverage appetite and to submit, email [email protected].
About Protector Plans Executive Liability/B&B Protector Plans
Protector Plans Executive Liability Program provides coverage for all your business insurance needs. The program offers D&O liability, Employment Practices Liability, Fiduciary Liability, Employed Lawyers, Crime and Miscellaneous Professional Liability coverage for private and not-for-profit risks with up to $750 million in revenue and assets or 2,500 employees. Limits are up to $5 million per coverage section.
Brown & Brown Protector Plans, Inc. (“Protector Plans”) is a national administrator of property and casualty insurance solutions whose reputation for innovation and customer service is based on a 40+ year history of meeting the complex insurance needs of professionals. Protector Plans’ fundamental distinction is grounded in insurance product innovation. Protector Plans is a wholly owned subsidiary of Brown & Brown, Inc.
About Brown & Brown, Inc.
Brown & Brown, Inc. (NYSE: BRO) is a leading insurance brokerage firm, delivering risk management solutions to individuals and businesses since 1939. With 15,000+ teammates in approximately 500 locations worldwide, we are committed to providing innovative strategies to help protect what our customers value most. For more information or to find an office near you, please visit bbinsurance.com.
Full Press Release: Protector Plans Executive Liability launches primary product offering (prweb.com)
by Juliane Rees | Aug 3, 2023 | Industry News
Just as important as professional liability coverage, EPLI protects a business against rising claims of discrimination, harassment, retaliation and wrongful termination.
By Ben Young, Christie Vu and Gregory Boornazian
An employer can do everything right and still be served an Equal Employment Opportunity Commission (EEOC) notice.
Alleged discrimination charges under Title VII of the Civil Rights Act of 1964 accounted for 61% of the EEOC cases filed in 2021.[1] Employment Practices Liability Insurance (EPLI) helps protect against liability from false allegations just as much as accurate ones. Claims that aren’t legitimate or don’t hold up in court still cost business owners real money to defend.
EPLI is a business’s main protection against claims of discrimination, harassment, retaliation and wrongful termination, and with such claims on the rise, it is just as important as professional liability coverage. Broad form EPLI will cover a business for defense costs, indemnity and third-party claims. Added benefits often include “duty to defend” language and 100% defense cost allocation.
Smaller businesses often argue that their staff is one big happy family, but the reality is this is simply not true. Employees have certain expectations of their employers, and even long-term, reliable employees can seize an opportunity for personal gain.
Knowing and complying with employment laws is a business owner’s first defense against certain fines and penalties. When mistakes are made, employers can rely on strong legal counsel, but ignored and unreported errors will only escalate matters over time.
Consider the following real claims scenario:
An employer in the Midwest was summoned by the U.S. Department of Labor for Fair Labor Standards Act violations due to a timekeeping discrepancy and a misunderstanding of U.S. overtime policies by the company’s management. Engaging the injured parties, paired with the fast action and cooperation of their legal team, saved the employer from a criminal investigation and punitive fines. The employer paid the owed back wages, but without proper insurance provided by a reliable company with an experienced claims team, the consequences of their mistake could have been a lot worse!
Business owners have a lot on their plates and managing an EEOC claim can be a stressful and costly expense. Utilizing EPL coverage through a highly rated carrier is an efficient risk transfer for this exposure. Engaging expertise, particularly in the event of frivolous allegations, can save a business valuable time and money.
For more insight on today’s changing employment landscape, check out Protector Plans’ eBook.
[1] Seyfarth “EEOC-Initiation Litigation,” 2023.
This information is intended for informational purposes only. Protector Plans Executive Liability is not liable for any loss or damage arising out of or in connection with the use of this information.
by Juliane Rees | Jul 26, 2023 | Industry News
Documentation, level-headedness, focus and consistency are important aspects of a smooth firing process.
By Ben Young, Christie Vu and Gregory Boornazian
“Everyone knew that person wasn’t doing their job,” doesn’t stand up in court. What if the manager that initiated a termination is no longer with the company when a discrimination claim is made and there’s scarce documentation?
If it wasn’t documented, did it even happen?
Best intentions count for very little when there isn’t any proof to back up an employment termination decision. It doesn’t matter the size of the organization or the number of people who can provide testimony. There is ample room for dispute when it’s all hearsay. Even in today’s digital world, where an employee can be captured on screen being rude to customers, a company would struggle to justify such a termination without the proper misconduct documentation.
Trying to gather documentation after the fact is one of the hardest ways to defend a discrimination charge. If the documentation does not exist, it cannot retroactively be created.
Here are four best practices for employers to build a consistent firing process:
- Always submit something. Ideally, there is a designated form for firing managers to fill out. In circumstances where this form is unavailable or time does not permit, the firing manager should send a timestamped email or text message to the HR department to be included in the personnel files. In this case, function is more important than form, but ideally, employers should establish systems that support by-the-book employment practices.
- Cool down before documenting. Emotions should not play a role in the firing process. A clear head and cool temperament are preferred when documenting an employment incident, because plaintiffs’ attorneys can spin emotion into proof of bias.
- Focus on the specific performance issue. This is why written communication of the job expectations during the hiring process is so important. There should be no room for surprises. If an employee continues to not meet performance expectations, there is cause for termination. However, if either the expectations or the performance issues go undocumented, there is an open door to dispute the dismissal.
- Be consistent in the review process. If one employee receives more leniency, it could appear as favoritism and unfair employment practices. A good rule of thumb is that there is no such thing as overcommunication. The review process should tell a consistent story about the individual employee as well as the importance of employee performance across the organization. “They weren’t a good fit,” is not a legally appropriate cause for termination.
By following these four best practices, employers can ensure the firing process is a smooth and streamlined event. They will also be better protected against wrongful termination claims.
For more insight on today’s changing employment landscape, check out our eBook: Navigating the Complicated World of Hiring, Firing, & Retaining in 2023
This information is intended for informational purposes only. Protector Plans Executive Liability is not liable for any loss or damage arising out of or in connection with the use of this information.
by Juliane Rees | Jul 19, 2023 | Industry News
Consistency, accuracy, documentation and follow-up are the essential aspects of a successful hiring event.
By Ben Young, Christie Vu and Gregory Boornazian
The foundation of a strong hiring process is consistency. Not only can it save time and make it easier to assess candidates, it can facilitate fair hiring and support the organization against any future job qualification or expectation disputes.
The backbone to a consistent hiring process is documentation. This includes notes on promised benefits, signing offers and any red flags with each candidate. If all communication, references and assessments are documented, employers can make sure each candidate receives the same information, is evaluated on the same criteria, and understands the expectations of the role.
Here are four best practices to building a consistent and well-documented hiring process:
- Start with an accurate job description.
If the job requires the worker to lift 100 pounds but it wasn’t listed in the job description, the employer may not be able to lawfully fire them once hired for not meeting that expectation. On the other hand, it is possible to disqualify an applicant who does not meet a qualification that is stated in the job description, as long as the employer can justify that requirement.
- Stay neutral in documentation and reporting.
Hiring decisions cannot be based on emotions because personal opinions are risky for employment practice liability. When documenting an applicant’s experience and interview performance, it is important to stick to the facts. Note both the positive and negative aspects of each candidate in relation to the job qualifications.
- Formalize the offer process.
A great way to do this is with a hiring letter that records the terms of employment. This letter should be consistent across positions within the office, including the same data points such as pay, sign-on bonuses, benefits, performance review schedule, and all other key terms decided upon hiring.
- Follow up with each applicant.
It’s a good practice to reach out to each applicant, even to notify them that they were not chosen to move forward in the process so they’re not left waiting and wondering. Stay generic and consistent. There is no need to explain the reasons why they did not qualify.
By following these four best practices, employers can ensure their hiring process is a smooth and streamlined event.
For more insight on today’s changing employment landscape, check out our eBook: Navigating the Complicated World of Hiring, Firing, & Retaining in 2023.
This information is intended for informational purposes only. Protector Plans Executive Liability is not liable for any loss or damage arising out of or in connection with the use of this information.
by Juliane Rees | Jul 7, 2023 | Industry News
The Corporate Transparency Act affects certain tax-exempt entities and private businesses by introducing a new layer of reporting and compliance requirements. Take time to understand what the law requires and how to get your business ready for this significant change that’s coming soon.
By Ben Young, Greg Boornazian, Christie Vu and Jonathan B. Wilson
The United States is making strides expanding anti-money laundering laws that will bring our practices up to par with European countries.
The Corporate Transparency Act (CTA), a bipartisan law that was passed by Congress in 2020 and will become effective January 1, 2024, requires U.S. companies to disclose specific identifying information about each of their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department.
Businesses will have to file a beneficial owner report with FinCEN, who will then use this information to generate a non-public facing database of beneficial ownership information (BOI) to help eliminate corporate anonymity and expose potential money laundering tactics that have been hidden from view.
While complying with this new law may seem straightforward at first glance, the CTA includes several complicating factors to bear in mind. First and foremost, this is a federal law that is based on state business distinctions, which can create confusion. Other stumbling blocks include determining who exactly is the beneficial owner(s) in the business and establishing a secure and efficient way to collect and transmit the required identifying information and documentation within the timelines mandated by the law.
The CTA goes into effect in mere months, so let’s take a closer look at what’s required and the best way to get started.
Defining the nuances of the Corporate Transparency Act
The CTA is far-reaching and impacts a vast number of U.S. businesses, but it doesn’t apply to everyone and may vary from state to state. Reporting companies required to adhere to the CTA include:
- Any entity formed by filing a formation document with a Secretary of State or similar office
- Any entity formed under the laws of a foreign country and registered to do business in the U.S. by the filing of a document with a Secretary of State or similar office.
Some entities that are subject to the law are exempted from its filing obligations. There are 23 categories of exemption, including:
- Tax-exempt entities under Section 501(c) of the Internal Revenue Code (IRC). [Note: This does not include tax-exempt entities under other sections of the IRC, such as homeowner associations, which are exempt under IRC Section 528.];
- Publicly traded businesses;
- Banks and credit unions;
- Bank holding companies; and
- Large operating companies with more than $5 million in annual gross receipts (as demonstrated on their most recent tax return) and more than 20 full time employees.
FinCEN estimates that approximately 32 million companies will need to file in the first year the CTA takes effect. Thereafter, FinCEN estimates that there will be about 5 million new reporting companies added each year.1
Identifying Beneficial Owners
Once you’ve determined that your business must comply with the CTA, you need to identify who are the beneficial owners and gather required information and documentation. Beneficial owners are defined by FinCEN as any individual who either “exercises substantial control over the reporting company or owns or controls at least 25% of the ownership interests of the reporting company.”2
Any existing companies established before January 1, 2024 will have one year to file their first report. New companies established on or after January 1, 2024 will have to file their first report within 30 days of formation.
The following five pieces of personally identifiable information (PII) must be provided for each beneficial owner of the reporting company:
- Full legal name
- Date of birth
- Residential address
- Identification number (driver’s license, passport, etc.)
- An image of the photo ID provided
All companies will be required to file an amendment within 30 days after any beneficial owner data changes.
In addition, companies formed on or after January 1, 2024 will also need to provide these same five pieces of PII with respect to their “company applicant.” The term “company applicant” is defined as the individual who files the company’s formation (or registration) documents with the Secretary of State, or who directs the filing of those documents.
What do business owners and operators need to do?
CTA compliance introduces significant new obligations for impacted businesses across the country, so it’s important to look ahead and prepare for what’s to come.
Here are three steps to get started:
1. Appoint a compliance officer and adopt a compliance policy.
The officer should report to the board, advise on progress and be responsible for ensuring reporting is done completely and on time.
2. Amend your internal corporate governance documents.
Formalize corporate governance documents, such as LLC operating agreements and shareholder agreements, to include requirements for shareholders to report and collect data in compliance with the law. The documents should also require the shareholder to represent and warrant the reported data and indemnify the organization in the event a third-party claim arises from the data provided. Counsel should review these documents to ensure your organization is protected in the event a shareholder fails to report or provides inaccurate data.
3. Engage with your attorney to determine who are your “beneficial owners.”
Beneficial owners cannot merely be identified as those who hold your stock. If your company is taxed as a partnership, for example, determining the beneficial owners can become complicated. Don’t delay here — start the process now so you aren’t left scrambling in a few months.
A note on mergers and acquisitions: Don’t assume companies you’re acquiring are compliant with the CTA. Make adding CTA beneficial owner updates to your M&A due diligence checklist a high priority, as all updates will need to be made within 30 calendar days of transaction closing.
For a more detailed look at how to prepare, check out Jonathan Wilson’s The Corporate Transparency Act Compliance Guide,3 to be published this summer. This in-depth guide offers a complete overview of the CTA and offers examples, checklists and model forms to help companies develop compliance policies and governance provisions.
CTA enforcement and penalties
FinCEN has not yet published details about how they intend to enforce the CTA, but it’s almost certain that those who do not comply will incur civil money penalties. Even companies that make filing errors — regardless of company size or number of beneficial owners — will be fined. Organizations that file past the deadline are liable to pay a fine of $500 per day with a maximum penalty of up to $10,000. Criminal liability charges will be imposed on senior officers or those who knowingly provide false information which can result in imprisonment for not more than 2 years.
FinCEN Reporting System
It’s imperative that companies establish a secure, efficient way to manage beneficial owner data, as solutions such as email, Google Docs and Excel spreadsheets fall short of doing this effectively. They lack proper security, transparency among owners and those managing the data, and do not provide an accessible way to collect and update data as needed.
FinCEN Report Company’s FinCEN Reporting System has been purpose-built for CTA compliance and will soon offer an easy and secure way for companies to collect, prepare and file beneficial owner data and reports. The FinCEN Reporting System also simplifies reporting data of beneficial owners who own multiple reporting companies. Check out these quick videos to see how to create your free personal account or company account to get started. For more information on how the FinCEN Report Company can help you prepare for the CTA reporting requirements, you can contact them at [email protected] or visit their website at www.fincenreport.com.
Protector Plans would like to give special thanks to Jonathan Wilson, Co-Founder of FinCEN Report Company, for his time in speaking to us about the CTA, its impacts, and how to prepare.
[1] Federal Register “Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities,” December 16, 2022.
2 Practical Guidance Journal 2023 Second Edition “The Corporate Transparency Act and Beneficial Ownership Reporting Requirement.”
3 LexisNexis “The Corporate Transparency Act Compliance Guide, 2023 edition.”
This information is intended for informational purposes only. Protector Plans Executive Liability is not liable for any loss or damage arising out of or in connection with the use of this information.
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