Aug 20, 2017

Protect your company from management liability

{Sponsored} Running a business is risky. You knew that when you laid the foundation for your first greenhouse and hired your first employee.

You took the risk after months — or maybe years — of careful planning and preparation. But did you take the time to protect yourself from management liabilities?

“Executive Risk Insurance, also known as Management Liability, is most often purchased by medium-size and larger greenhouse operations, but firms of any size may be at risk,” said John Hodapp, director of agency operations at Hortica®. “Smaller firms may find that some of the more basic Executive Risk coverages — like employment practices liability, crime insurance and cyber liability — to be available in nominal amounts as a part of an existing insurance package. But as a company grows, and the numbers of employees increases to 50 or more, greenhouse growers should consider some of the more robust Executive Risk coverages that are available in the marketplace.”

Executive Risk Insurance protects business owners from a variety of liabilities. Hodapp said the following might be the most applicable for greenhouse operations.

Directors and Officers Liability. Leaders of private and public companies can he held personally liable for the decisions they make. Without Directors and Officers insurance, their personal assets could be at risk. Shareholders, customers, employees, lenders, vendors, competitors and regulatory agencies may initiate claims. Directors and Officers Liability is a must-have for corporations.

Fiduciary Liability. Persons making decisions regarding employee benefit plans are fiduciaries and can be personally liable for losses to benefits resulting from their errors, omissions or breaches of fiduciary duty. Examples include failing to provide a broad range of investment choices, providing improper advice to plan participants and improperly denying or reducing benefits. If you offer health insurance or 401k benefits, you are at risk.

Crime. Coverage includes employee dishonesty, money and securities, and burglary and robbery. Social Engineering Fraud (i.e., a thief poses as a business owner and contacts employees requesting money transfers) also can be included in an Executive Risk policy.

Aside from those listed above, Executive Risk Insurance covers employment practices liability, kidnap and ransom and workplace violence.

“Executive Risk Insurance covers not only damages, but pays for defense teams, which can be extremely expensive,” Hodapp said. “The loss prevention services that are provided to Executive Risk policyholders may help prevent claims that would otherwise occur.”

The key is prevention. Greenhouse owners and operators must control executive risks before problems arise. Hodapp suggests the following.

• Appoint directors with no agenda other than making the company the best it can be.
• Make sure managers and employees are properly trained.
• Use a fair and unbiased employment application.
• Create accurate job descriptions for each position within the organization that outline performance expectations.
• Have a plan for regular employee reviews, a progressive discipline policy and a personnel handbook.
• Maintain unambiguous documentation.

“Remember that all loss prevention strategies start at the top,” Hodapp said. “Senior management commitment is essential to a program’s success.”
For more information about Executive Risk Insurance, contact your Hortica insurance agent or visit www.hortica.com.

Hortica® property and casualty coverages are underwritten, and loss control services are provided, by Florists’ Mutual Insurance Company and Florists’ Insurance Company, members of the Sentry Insurance Group. For more information, visit hortica.com. Policies, coverages, benefits and discounts are not available in all states. See policy for complete coverage details.

This document is made available by Sentry Insurance a Mutual Company and its subsidiaries and affiliates (collectively “SIAMCO”) with the understanding that SIAMCO is not engaged in the practice of law, nor is it rendering legal advice. The information contained in this document is of a general nature and is not intended to address the circumstances of any particular individual or entity. Legal obligations may vary by state and locality. No one should act on the information contained in this document without legal advice from competent and licensed local professionals. THE INFORMATION CONTAINED IN THIS DOCUMENT IS DISTRIBUTED BY SIAMCO “AS-IS”, WITHOUT ANY WARRANTIES. SIAMCO WILL HAVE NO LIABILITY TO ANY PERSON OR ENTITY WITH RESPECT TO ANY LOSSES OR DAMAGES CAUSED, OR ALLEGED TO HAVE BEEN CAUSED, DIRECTLY OR INDIRECTLY BY THIS DOCUMENT, REGARDLESS OF WHETHER SUCH CLAIM IS BASED ON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE AND FOR PROPERTY DAMAGE AND DEATH) OR OTHER GROUNDS.

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