Shoplifting Prevention

Shoplifting Prevention

Shoplifting Prevention

Shoplifting can become a costly problem for any retailer. According to the National Association for Shoplifting Prevention, over $35 million worth of merchandise gets stolen from retailers each day. Furthermore, the latest data from the National Retail Federation provides that shoplifting is the leading cause of inventory shrinkage among retail businesses—contributing to 39% of shrinkage concerns. With these numbers in mind, your business can’t afford to ignore the risk of shoplifting. Fortunately, many shoplifting incidents can be deterred by implementing a shoplifting prevention program. Review this guide for an outline of key elements to include in your program. Contact GDI Insurance Agency, Inc. today for your retail insurance quote 209-634-2929.

Start With a Smart Store Layout for Shoplifting Prevention

First, it’s important to ensure that the physical layout of your store dissuades potential shoplifters. That being said, follow these layout best practices:

  • Limit the number of entrances and exits at the store. However, make sure this setup remains compliant with building safety codes. Never allow customers to use fire exits unless it’s an actual emergency.
  • Attach a bell or sensor to all store entrances to help keep track of customers as they arrive at the premises.
  • Avoid placing merchandise by store entrances and exits. Doing so could attract shoplifters, giving them the opportunity to swiftly steal the merchandise and leave the premises before getting caught.
  • Keep high-priced merchandise either out of the direct reach of customers (e.g., in locked display cases) or near the checkout counter.
  • Place the checkout counter in a way that requires all customers to pass it before leaving the store.
  • Utilize shorter store shelving and displays to maintain visibility of customers while they shop.
  • Install proper lighting and convex mirrors throughout the store to avoid potential blind spots that shoplifters could take advantage of.
  • If applicable, keep dressing rooms locked while they are not being used to ensure customers have to consult an employee before entering them.

In addition to these layout methods, be sure to keep the store clean and organized at all times. Cluttered aisles and jumbled merchandise can make your store more attractive to shoplifters and lower your ability to quickly detect missing items.

shoplifting prevention

Ensure Adequate Security Measures

Utilizing robust security measures at your store can help discourage potential shoplifters, as well as catch such criminals in the act before it’s too late. Consider equipping your store with these top security features:

  • Security cameras—Installing security cameras across the store (with the exception of bathrooms and dressing rooms) will allow you and your staff to have eyes throughout the property and capture high-quality footage of shoplifting incidents.
  • Electronic article surveillance (EAS) systems—An EAS system has two components. First, individual tags that can only be removed with a special device after a secure purchase are placed on store merchandise. Second, sensors consisting of a transmitter and a receiver are installed at store exits. These sensors establish an electronic field that becomes unbalanced if a tagged item passes through them. If someone attempts to steal tagged merchandise, the sensors will trigger an alarm as soon as the shoplifter tries to exit the premises. EAS systems are a critical aspect of any shoplifting prevention program. In fact, several studies have found that EAS systems can help minimize shoplifting losses by as much as 75%.
  • Inventory management technology—Apart from EAS systems, various forms of inventory management technology can also help you better keep track of store merchandise and prevent shoplifting losses. For instance, point-of-sale systems are computerized software that you can utilize during the checkout process to help monitor store inventory, detect false returns or exchanges, and confirm customers’ identities. A wide range of mobile applications have also been created to help store owners conduct physical inventory counts more efficiently via digital barcode scanning.

Further, make sure to implement signage throughout the store to inform customers of the security measures you have in place. Place this signage at the entrances and exits of your store, as well as above any display areas. However, ensure this signage properly reflects your store’s brand and considers your customer base. After all, the goal of these signs is to dissuade shoplifters—not intimidate legitimate customers.

shoplifting prevention

Utilize Your Employees

It’s also important to include staff in your shoplifting prevention program. As such, there should be enough employees scheduled during each shift to monitor every section of the store. Designated employees should be responsible for greeting customers as they enter the store, following up with customers while they shop and assisting them when they want to use the dressing rooms (if applicable). If a customer starts carrying around a significant amount of store merchandise, employees should offer to hold items behind the counter for them until they check out. All employees should also be trained on how to detect potential shoplifting behaviors, such as:

  • Shopping in a large group of people
  • Not making direct eye contact with staff
  • Carefully watching employees’ movements but avoiding interaction with them
  • Acting nervous and appearing disinterested in store merchandise
  • Trying to use a dressing room without staff permission or taking a large number of items into the dressing room
  • Frequently glancing at store exits
  • Carrying numerous other shopping bags, purses or backpacks to easily place stolen merchandise into
  • Spending a significant amount of time in one particular area of the store
  • Fidgeting with items’ price markings or EAS tags

During the checkout process, employees should be instructed to carefully remove EAS tags from store merchandise, ensure smaller items aren’t being hidden within larger items and inspect each items’ price markings to make sure they are correct. Employees should be required to provide customers with a copy of their receipt for every purchase.

In the event of a confirmed shoplifting incident, staff should know how to safely respond. This may include contacting the police for assistance. If you are particularly concerned about the risk of shoplifting or your store has been frequently targeted by shoplifters in the past, you may want to consider hiring specialized security personnel in addition to your regular staff.

Implement Effective Shoplifting Prevention Store Policies

Lastly, it’s critical to develop and enforce various store policies aimed at preventing and responding to shoplifting incidents. Policy topics may include:

  • How merchandise should be organized and displayed within the store
  • How prices are marked on merchandise and what measures are in place to prevent price tampering (e.g., securely attaching price tags with string or staples to minimize tag switching)
  • What the protocols are for managing store inventory
  • Whether customers are permitted to bring shopping bags, purses, strollers or backpacks into dressing rooms (if applicable)
  • How many items customers can have in a dressing room at one time (if applicable)
  • How employees should respond to suspected shoplifters
  • How store evidence (e.g., security camera footage, the triggering of the EAS system and store receipts) will be used to implicate a shoplifter
  • What the process is for prosecuting confirmed shoplifters

For more industry-specific risk management guidance, contact us today.

California’s Leader in Insurance and Risk Management

As one of the fastest-growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more. The GDI team has developed an “insurance cost reduction” quoting plan, that provides you with the best coverage at the best rate!

We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business.

Contact us today 1-209-634-2929 for your comprehensive small business insurance quote!

5 HR Trends to Monitor in 2021

5 HR Trends to Monitor in 2021

5 HR Trends to Monitor in 2021

HR departments are given more and more responsibility each year, oftentimes with budgets that don’t match. This means HR teams must constantly seek ways to innovate and stay on top of trends if they want to compete in the marketplace, particularly amid the COVID-19 pandemic. To that end, here are five HR trends to watch for in 2021. When reviewing them, employers should consider how their organizations may benefit by implementing similar strategies.

HR Trends

1. Employee Well-being

The COVID-19 pandemic drastically changed the perception of what qualifies as a “safe and healthy” work environment. A couple years ago, any business with a wellness program may have fit that definition. And, even then, a company lacking those qualities wasn’t always a deal breaker for some employees.

Now, “safe and healthy” means something much different. In 2021, expect an increased focus on more rounded employee well-being. Baseline efforts will include safeguards against COVID-19, but many employers will likely go beyond illness prevention.

Already, some organizations have transitioned to a more holistic well-being approach, and others will undoubtedly follow suit. These initiatives examine the larger picture and aim to help employees better themselves, even outside the workplace. Efforts include mental health programs, dependent care assistance and flexible scheduling. Focusing on these areas can lead to healthier, happier and more productive employees.

2. Greater Inclusivity

While much of last year was defined by the COVID-19 pandemic, a significant portion was also devoted to stemming racial inequity. Months-long protests forced a national conversation about diversity in the workplace and beyond. This prompted many businesses to make statements about committing to more diverse representation in their ranks.

While public statements and private company actions don’t always align, some workplaces are keeping good on their word. Notable efforts include consciously trying to diversify leadership, scrutinizing hiring processes to identify barriers to diversity and developing training to foster greater cultural and racial inclusivity. Employers can expect an uptick in these types of efforts in the new year.

Learn About the GDI Philosophy

3. Expanded Remote Work

Many businesses were forced to shut down or migrate to remote work during the pandemic. Now, even with a vaccine in sight, a large number of those employers will likely continue offering remote work opportunities. In fact, some tech giants like Twitter and Google have indicated workers may not be required to return to the office ever again.

This suggests remote work, at least part time, will remain for the foreseeable future. As such, employers should consider expanding their own remote opportunities, as applicable. This won’t be feasible in all situations, but it might be for some positions. Doing so will not only provide a safeguard against COVID-19, but it can also serve as a tantalizing recruitment perk. Moreover, remote positions give employers greater hiring flexibility, allowing them to expand talent pools to any area with an internet connection.

4. Increased Employee Monitoring

A natural counterpart to remote work is employee monitoring software. When a number of employees operate outside the workplace, employers sometimes need other ways to keep track of productivity. That’s where these tools come in.

Employee monitoring software is what it sounds like—software that tracks computer usage. Depending on the software, it might record and employee’s website traffic, app activity and time spent idle. Some solutions even give employers access to employees’ webcams.

While some of these monitoring capabilities may seem extreme, the demand for such tools has only increased amid the COVID-19 pandemic. That means employers with remote workers should consider whether monitoring software is right for them. Particularly, employers should weigh the need to manage workers against the consequences of infringing on employee privacy. In other words, a heavy hand in this area might actually breed more resentment than encourage productivity.

HR Trends

5. Reimagined Onboarding

Onboarding is yet another workplace facet that was disrupted by the COVID-19 pandemic. This critical process of hiring, training and welcoming new employees into an organization is one of the most important functions of HR. What was once a series of carefully outlined in-person meetings has now been upended.

Employers had to reimagine the onboarding process in 2020 and will likely continue adapting it in the new year. For many, this means transitioning to an entirely virtual onboarding process, while maintaining the same level of quality. Virtual onboarding may include remote meetings via webcams, online quizzes, video tutorials and other creative methods of educating new employees remotely. Even among employers that have reopened, developing these processes now will better position HR teams in the event of another COVID-19 wave and shutdowns.

Summary of HR Trends to Monitor in 2021

COVID-19 affected nearly every workplace function last year, and that influence will linger into 2021 and beyond. Entire functions are being reimagined and reevaluated. Employers will need to adapt quickly if they want to compete in this innovative landscape. Reach out for more guidance related to these and other workplace trends.

California’s Leader in Insurance and Risk Management

As one of the fastest-growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more. The GDI team has developed an “insurance cost reduction” quoting plan, that provides you with the best coverage at the best rate!

We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business.

Contact us today 1-209-634-2929 for your comprehensive business insurance quote!

Employer OSHA Liabilities for Remote Workers

Employer OSHA Liabilities for Remote Workers

Employer OSHA Liabilities for Remote Workers

Encouraging remote work has become a new normal for a variety of reasons. Whether it is to reduce costs of operating a physical place of business, address pandemic reasons or allow employees to have a better work-life balance, more and more workers are working from home. However, many organizations are not aware of how the Occupational Safety and Health Administration (OSHA) oversees injuries that occur at an employee’s home. OSHA has provided guidance on how to deal with remote worker injuries and inspections.

Home Offices vs. Home-based Worksites

To start, it is important to distinguish home offices from home-based worksites for the purposes of OSHA inspections.  Home offices are where an employee engages in office work activities. This consists of activities that use office equipment like computers and telephones.

In contrast, a home-based worksite is an area of an employee’s personal residence where the employee performs work of the employer (e.g., home manufacturing operations such as industrial sewing or woodworking).

The difference between the two is that one consists of office work and the other involves using an area of the home for employees to perform the work of the employer. This is important because the difference determines whether OSHA will perform an inspection.

OSHA Inspection Guidance for Remote Workers

OSHA has policies for both home offices and home-based worksites. The policy for home offices is that OSHA will not conduct inspections of an employee’s home office or hold employers liable for employees’ home offices. OSHA has never conducted inspections of home offices, but it will with certain types of home-based worksites that are dangerous or hazardous.

OSHA will only conduct inspections of other home-based worksites if it receives a complaint or referral that indicates one of the following:

  • There is a violation of a safety or health standard that threatens physical harm.
  • Imminent danger exists (including reports of a work-related fatality).

The inspection is limited only to the employee’s work activities since OSHA regulations do not apply to an employee’s house. For example, if a cabinet manufacturer sends home wood cutting tools for their employee to use for building cabinetry remotely, the inspection would be limited to the area in which the employee is working and would include the tools that were being used.

It is important for you to note as an employer that, in these situations, you are responsible for any hazards caused by materials, equipment or work processes that you provide or require to be used in the employee’s home.

If an inspection does occur, OSHA regulations will apply as they normally would, and the inspection process will be completed according to the standards—except what has been modified by the OSHA guidance for worksites in employees’ homes.

OSHA Liabilities for Remote Workers: Injury and Illness Tracking

Under OSHA, there are injury and illness recordkeeping requirements. An injury or illness that occurs while the employee is working from home is considered a work-related injury or illness if it directly relates to the activities of the job rather than the activities in the home environment. An injury is recordable if it is a work-related:

  • Fatality
  • Injury or illness that results in the loss of consciousness, days away from work, restricted work or transfer to another job
  • Injury or illness requiring medical treatment beyond first aid
  • Needlestick or sharps injury, medical removal, hearing loss or tuberculosis

Employers must record work-related injuries that occur at home on the OSHA 300 logs like they would if employees were on-site and injured.

An example of a non-work-related injury is if an employee runs to pick up the work phone during work hours and trips, which results in an injury to the employee. Another example is when an employee hears their child crying, gets up to tend to their child and is injured in the process. Although both injuries occurred during work, they did not directly relate to the performance of the job. They occurred due to the general home environment.

While OSHA is not entering homes for inspections for home office complaints, you will still need to keep a record of those injuries or illnesses that are considered OSHA recordables. This will cause an increase in your incident rate that can be compared to industry standards under the North American Industry Classification System (NAICS). If your incident rate is high for the industry average, your organization can be flagged, alerting OSHA that there is an issue with your safety program. A high incident rate could likely initiate an audit at your facility.

Being Proactive

You can decrease the risk of recordable OSHA injuries by being proactive. Reducing these recordable injuries will lower your incident rate.

You should have a remote worker policy drafted and implemented so there is documentation of your expectations as an employer. The policy should define job tasks for each job description. This provides guidance to those working from home. It also helps provide documentation that may be needed to rebut a complaint from OSHA.

Job descriptions provide detailed information of what an employee should be doing for their job tasks. This is helpful because, if an employee is injured while performing an activity that is not within the job description, it does not have to be documented on the OSHA 300 logs.

You should also provide materials to assist employees in setting up their home office. Assisting employees with the setup of their home office to prevent any ergonomic issues is one way to reduce the risk of a remote office injury. This can be done by providing information to employees on:

  • How to set up their workstations
  • Proper posture
  • How often to take breaks
  • Stretches they can use during their shift
  • How exercise can help prevent injuries

A way to monitor the employee’s participation with proper setup of their workstation is to participate in virtual meetings where the employee can show the employer their workstation. This can be done by using a mobile webcam. Another option is to require employees to perform at home office inspections themselves (like a mini audit of their workstations) and have them submit them to you for review.

By providing training and assistance to your employees, it can help reduce the risk of having an OSHA recordable injury. Getting creative to drive safety initiatives without overstepping privacy boundaries of a person’s home can be challenging, but ultimately can be done. It can help prevent OSHA inspections and costly injuries, and reduce incident rates.

For more risk management guidance, contact GDI Insurance Agency, Inc. today.

California’s Leader in Insurance and Risk Management

As one of the fastest-growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more. The GDI team has developed an “insurance cost reduction” quoting plan, that provides you with the best coverage at the best rate!

We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business.

Contact us today 1-209-634-2929 for your comprehensive California workers compensation insurance quote!

Is Your Employee’s COVID-19 Case Work-Related?

Is Your Employee’s COVID-19 Case Work-Related?

Is Your Employee’s COVID-19 Case Work-Related?

The coronavirus (COVID-19) pandemic has created massive change and concern for employers and employees across the world. Even as businesses reopen and employees return to their new normal, the risk of becoming exposed to and ill with COVID-19 is still present. When an employee reports they have COVID-19, employers are faced with the difficult task of determining whether the employee’s illness is work-related. This HR Insights piece will provide an overview of how employers can determine when a COVID-19 case is work-related, OSHA requirements for reporting illness and best practices for responding to an employee’s positive COVID-19 test. As is the case with all inherently legal issues, employers are strongly recommended to seek the guidance of legal counsel when faced with any of the claims discussed herein. This article should not be considered legal advice.

OSHA Requirements

The Occupational Safety and Health Act (the Act) requires employers to report and record work-related injuries and illnesses. OSHA has indicated that COVID-19 infections are recordable injuries if they are work-related and they meet the Act’s recording criteria. Recording requirements apply only to employers with more than 10 employees who are not in an exempt, low-risk industry.

In addition, employers must report incidents that result in an employee’s fatality within eight hours. Incidents that result in inpatient hospitalization, amputation or loss of an eye must be reported within 24 hours.

COVID-19 Case Work-Related

OSHA Guidance on Work-relatedness

An injury or illness is work-related if an event or exposure in the work environment either caused or contributed to the resulting condition or significantly aggravated a preexisting injury or illness. Work-relatedness is presumed for events or exposures in the work environment.

Case-by-Case Evaluation

Unfortunately, because the coronavirus is so widespread, determining whether an employee’s illness is work-related can be difficult and should be evaluated on a case-by-case basis. Employers can conduct the following activities when an employee reports a positive COVID-19 diagnosis:

  • Ask how the employee believes they were exposed to the coronavirus.
  • Ask employees about their work-related activities.
  • Ask employees about their out-of-work activities, while being sure to respect their privacy.
  • Conduct a review of the employee’s work environment to identify potential COVID-19 exposure.
  • Review whether the employee’s co-workers have reported a COVID-19 diagnosis or symptoms.

After conducting a review, employers will hopefully have enough information to determine whether a COVID-19 case is work-related. Employers should consider that certain situations, including the following, make it more likely for a COVID-19 case to be work-related:

  • The employee is frequently and regularly exposed to the public.
  • There are other employees who have tested positive for COVID-19.
  • The employee works closely or has regular contact with someone who has tested positive for COVID-19.

Employers should consult legal counsel when evaluating whether an employee’s COVID-19 case is work-related to ensure compliance with all applicable federal, state and local laws.

COVID-19 Case Work-Related

Recording a Work-related COVID-19 Case

OSHA has clarified that COVID-19 can be a recordable illness if a worker is infected as a result of performing their work-related duties. However, employers are only responsible for recording cases of COVID-19 if all of the following are met:

OSHA’s definition of a recordable illness includes “both acute and chronic illnesses, such as, but not limited to, a skin disease, respiratory disorder or poisoning.” This definition is limited to abnormal conditions or disorders that exclude the common cold and the seasonal flu. This can make it difficult when employees show up to work with coronavirus-like symptoms, such as a high fever or coughing. For this reason, employers may hold off until they have a confirmed COVID-19 diagnosis before starting a recordability analysis. A confirmed case of COVID-19 means an individual with at least one respiratory specimen that tested positive for SARS-CoV-2, the virus that causes COVID-19.

Reporting a Work-related COVID-19 Case

COVID-19 cases must be reported if they are work-related and result in a fatality (within eight hours), inpatient hospitalization, amputation or loss of an eye (within 24 hours). The reporting periods begin as soon as the employer learns about the work-related incident, even if there is a delay between the time the incident takes place and the time the incident is reported to the employer.

If the OSHA area office is closed, employers are expected to report these incidents by phone at 1-800-321-OSHA (6742) or the reporting application located on OSHA’s public website at www.osha.gov.

Recordkeeping Requirements

Employers with more than 10 employees and whose establishments are not classified as a partially exempt industry must prepare and maintain records of serious occupational injuries and illnesses, using OSHA Forms 300, 300A and 301.

  • Form 300 (Log of Work-Related Injuries and Illnesses): Use to classify work-related injuries and illnesses and to note the extent and severity of each case. When an incident occurs, employers must use Form 300 to record specific details about what happened and how it happened.
  • Form 300A (Summary of Work-Related Injuries and Illnesses): Shows the total number of work-related injuries and illnesses for the year in each category. At the end of the year, employers must post the Form 300A in a visible location so that employees are aware of the injuries and illnesses occurring in their workplace. Employers must keep a log for each establishment or site. When an employer has more than one establishment, a separate log and summary must be kept at each physical location that is expected to be in operation for one year or longer.
  • Form 301 (Injury and Illness Incident Report): Must be filled out within seven calendar days after an employer receives information that a recordable work-related injury or illness occurred. This report includes information about the employee and the treating physician, and detailed information about the case. Employers must keep this report on file for five years following the year it pertains to.

The information collected in these records enables OSHA to determine DART rates for employers and industries. DART stands for “days away, restricted and transferred” and is a safety metric that helps determine how many workplace injuries and illnesses caused employees to miss work, perform restricted work or be transferred to another job within a calendar year. OSHA uses data from a three-year sampling period to update the list of partially exempt industries. Industries with a DART rate lower than 75% of the average DART for the sampling period are allowed a partial exemption from recording requirements.

Following these reporting requirements is essential to protecting your organization from potential litigation and OSHA violations. These recordkeeping violations can quickly add up, with first-time violations ranging between $1,000 to $5,000 and willful violations carrying a penalty of $134,937 per violation.

Best Practices for Responding to a COVID-19 Test

When an employee notifies you that he or she is sick with COVID-19, you should respond calmly and empathetically. In these uncertain times, it can be easy to overreact, but you need to ensure that the infected employee is treated with compassion. Reassure the employee that their identity will remain confidential, and be sure to help them coordinate taking leave or paid time off until they’ve recovered.

Without disclosing the identity of the infected employee, directly notify any co-workers or customers with whom the ill employee had been in contact. Be sure to remain calm and let them know that someone they have been in contact with or have been in their physical work area has tested positive for COVID-19. Recommend that they should self-quarantine for the next 14 days and monitor themselves for the symptoms of COVID-19. If feasible, allow eligible employees to work from home during this time.

Be sure to notify the rest of the company by email or letter that an employee has tested positive for COVID-19. Remember to keep the employee’s identity protected and be transparent about your response. The communication should include what steps your company will be taking to protect the health of other employees. If you plan on having employees work from home for the next 14 days or closing the office, this information should be disclosed in the communication.

According to the CDC, COVID-19 can remain on hard surfaces for up to 12 hours, creating a potential risk of transmission. Depending on the size of your organization, you may want to consider closing the office for a few days so that it can be thoroughly cleaned and disinfected. All surfaces that the infected employee may have touched should be disinfected, as well as other high-touch surfaces, which include countertops, cabinets, doorknobs, handles and chairs.

Summary

The COVID-19 pandemic is widespread across the country, and it’s likely that employers may be faced with the difficult situation of responding to an employee’s positive diagnosis and determining whether their illness is work-related. Before making any decisions, employers should consult legal counsel to ensure compliance with all applicable laws. For additional resources on the COVID-19 pandemic, contact GDI Insurance Agency, Inc. today.

California’s Leader in Insurance and Risk Management

As one of the fastest-growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more. The GDI team has developed an “insurance cost reduction” quoting plan, that provides you with the best coverage at the best rate!

We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business.

Contact us today 1-209-634-2929 for your comprehensive workers compensation insurance quote!

Portal Opens for Second Round of PPP Loans

Portal Opens for Second Round of PPP Loans

Portal Opens for Second Round of PPP Loans

The U.S. Department of Treasury and the U.S. Small Business Administration (SBA) have announced that beginning Monday, Jan. 11, applications will be accepted for the second round of PPP loans in the SBA’s Payment Protection Program (PPP). This second round includes $284 billion in funding that was allocated for the PPP in the stimulus bill passed on Dec. 27, 2020. This round of funding will run through March 31, 2021.

The second round of PPP loans provides eligibility to new borrowers and certain existing PPP borrowers. As eligibility opens up, small businesses and lenders should prepare to adhere to the new requirements detailed below. 

Second Round of PPP Loans

Second Round of PPP Loans Application Schedule

Monday, Jan. 11, marks the opening of the portal. Initially, the portal will only be open to borrowers applying for their first PPP loan (known as “First Draw PPP Loans”) through “community financial institutions.” These “community financial institutions” are lenders that serve minority, underserved, veteran and women-owned businesses.

On Wednesday, Jan. 13, borrowers applying for a second PPP Loan (known as “Second Draw PPP Loans”) also become eligible. Again, the SBA will only accept applications from lenders designated a “community financial institution.”

The PPP will open to all participating lenders “shortly thereafter,” according to the announcement. The SBA has yet to announce a specific date.

Second Round of PPP Loans

Information About the Second Round of PPP Loans

For the most part, the rules for this round are very similar to the initial round of PPP loans. However, there are updates to the first round of funding. According to the Treasury, key PPP updates include:

  • PPP borrowers can set their PPP loan’s covered period to be any length between eight and 24 weeks to best meet their business needs;
  • PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs and worker protection expenditures;
  • The program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives and direct marketing organizations, among other types of organizations;
  • The PPP provides greater flexibility for seasonal employees;
  • Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
  • Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

For more specifics about the second round of PPP funding, the SBA has provided additional details.

What’s Next?

Borrowers should review the criteria for this second round of PPP loans. Borrowers considering applying should prepare and have on hand all relevant documentation. Lastly, borrowers should direct any questions regarding PPP loans to their lender.

We will continue to monitor any additional developments regarding the PPP and deliver updates as necessary. For more information about the PPP, contact GDI Insurance Agency, Inc.

California’s Leader in Insurance and Risk Management

As one of the fastest-growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more. The GDI team has developed an “insurance cost reduction” quoting plan, that provides you with the best coverage at the best rate!

We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business.

Contact us today 1-209-634-2929 for your comprehensive business insurance quote!

Terrorism Risk Insurance and What You Need To Know

Terrorism Risk Insurance and What You Need To Know

Terrorism Risk Insurance and What You Need To Know

Terrorism has become an unfortunate fact of life. From the Nashville Christmas bombing, the Pittsburgh synagogue shooting to the Sandy Hook Elementary School tragedy to the Las Vegas Strip concert massacre, the news is filled with headlines related to acts of terrorism or thwarted attempts. These types of tragic events are changing how business owners are protecting their interests. You may want to consider a Terrorism Risk Insurance policy to protect your business.

“Commercial Property Insurance policies often contain exclusions for acts of terrorism,” said Carolyn Reiter, Associate Vice President, Global Excess Partners, New York, New York. “If the FBI determines the Nashville incident is an act of terrorism, those impacted may be denied coverage through their current Commercial Property Insurance policies.”

Terrorism Risk Insurance

Domestic and Foreign Terrorism

Terrorism differs from other catastrophes because it is not an aspect of weather or nature. However, it shares the same problem of insurability with its natural peers. There are two distinct types of terrorism: domestic and foreign. Domestic terrorism involves terrorist acts (or plans) by citizens of the same country where the act is committed. The reason for the act (or planned act) generally involves some domestic political agenda.

Foreign terrorism involves acts of individuals from one (or more countries) who wish to disrupt the lives of another country’s citizens in order to advance a particular cause.

The Real Risk to Your Business

The perpetrators of terrorist attacks and the methods they use continue to shift and relatively unprotected targets are becoming a greater focal point. Property damage and bodily injury are the primary risks associated with terrorism, yet there are liability factors that you should consider to best safeguard your business, including:

  • Business interruption loss
  • Fiduciary liability for corporate directors and officers
  • Pollution loss and liability
  • Privacy and network security liability

At least 45 businesses were da­­maged in the Christmas Day bombing in Nashville, Tennessee that decimated a block of downtown buildings. Local police and the Federal Bureau of Investigation (FBI) are still investigating why a 63-year-old Nashville area information technology consultant set off the explosion in his RV, killing himself and causing widespread destruction.

The bomb was detonated near an AT&T telecommunications hub, temporarily freezing mobile and internet systems in five states. As affected business owners assess the damage to their properties, they are also questioning whether their insurance policies will cover the repairs. If it is classified as terrorism, property owners without appropriate insurance coverage worry they may have to pay out of pocket for the damage.

Terrorism Risk Insurance

Types of Terrorism Risk Insurance Solutions

Domestic terrorism coverage is available in traditional policies and stand-alone terrorism risk insurance. Traditional policies, including commercial general liability and property policies, may provide some coverage for terrorism risk if not expressly excluded.

Workers’ compensation insurance is another traditional policy that may provide some form of terrorism coverage. Unlike property and casualty policies, workers’ compensation policies will not have terrorism (or war) exclusions.

You may also consider purchasing stand-alone terrorism coverage. Stand-alone policies typically exclude:

  • Political risks, including loss resulting from strikes, riots, civil commotion, rebellion, revolution, war and insurrection
  • Cyber-related loss and liability
  • Nuclear, biological, chemical and radiological hazards, like anthrax

Terrorism Insurance coverage is available through a standalone policy or the federally-backed Terrorism Risk Insurance Program (TRIP),1 authorized by the Terrorism Risk Insurance Act of 2002 (TRIA) in the wake of the September 11, 2001 attacks and extended through 2027 by the Terrorism Risk Insurance Program Reauthorization Act of 2019 (TRIPRA). Nevertheless, many business owners have no Terrorism Insurance coverage at all, leaving them vulnerable at a time when terrorism is an escalating concern and businesses are already struggling to survive in a pandemic-induced recession.

Many times people believe that if they aren’t right next to something like an NBA arena or a National Monument that they don’t need it. But in the case of the AT&T building in Turlock, that could have impacted nearly 1/4 – 1/3 of our downtown.

Terrorism Risk Insurance

Stand-alone Terrorism Risk Insurance Coverage

Terrorism Insurance can be purchased as a standalone policy—without a minimum loss requirement. Such policies include broader definitions of acts of terrorism that do not require government certification, Reiter said.

If you opt for stand-alone coverage, selecting the policy with the best terms involves more than just ensuring coverage extends beyond “certified acts of terrorism.” Valuation terms in stand-alone terrorism policies should be carefully reviewed to ensure you are appropriately compensated for loss and damage, even when actual repair or replacement isn’t possible or ideal.

It’s also important that specific terms are well defined, such as what constitutes an “occurrence” and how the number of occurrences associated with a given claim will be determined.

Coverage under a standalone Terrorism Insurance policy can also include loss of business income such as could occur during a forced closure due to property damage or to allow a criminal or forensic investigation to take place. Terrorism Liability Insurance is another important consideration, providing coverage for bodily injuries or deaths that may occur on a business’ premises due to terrorism.

 A standalone Terrorism Insurance policy could mean a faster recovery for business owners in the aftermath of a terror attack, Reiter said. “There is typically a significant lag time to process claims and issue payments under a government-backed program, especially compared to a general insurance claims transaction,” she explained. “Coverage under a standalone Terrorism Insurance policy could help a business start recovering from an attack much sooner.”

Other Policy Terms to Consider

Traditional policies or stand-alone terrorism risk insurance generally will include these terms:

  • Sue and labor. What property is reasonable to protect, recover or save after a general casualty loss may differ from what is appropriate following an act of terrorism. Avoid disputes by tailoring language in “sue and labor” provisions accordingly.
  • Expediting expenses. After an event, you want to be able to return to “business as usual” as quickly as possible. However, the costs incurred to sustain operations or expedite repairs in the wake of a terrorism incident may vary considerably from any other casualty loss. It may be appropriate to expand terms beyond “reasonable and necessary” costs to include security or healthcare-related expenses.
  • Increased construction cost. A terrorism incident may prompt legislative or other practical requirements that may increase the cost of demolition and compliant repair.
  • Pollution exclusion. The “act of terrorism” may prompt the release of hazardous substances — increasing the cost of the claim. Policies should not exclude the cost associated with a release of “pollutants” that is an indirect result of an otherwise covered “act of terrorism.”

For more clarity on how to protect your business from exposure to terrorism risk, reach out to your insurance professional and review the type of insurance coverage and policy terms that are right for your business.

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We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business.

Contact us today 1-209-634-2929 for your comprehensive business insurance quote!