Does My Commercial Motor Vehicle Need a USDOT Number?

Does My Commercial Motor Vehicle Need a USDOT Number?

Does My Commercial Motor Vehicle Need a USDOT Number?

Understanding when your company needs to register with the Department of Transportation (DOT) for a USDOT number is very important. For industries that have commercial motor vehicles (CMVs), it can be confusing to know when you need to register with the DOT. Not only do employers need to be concerned about when they need to register for a USDOT number, but they need to know if the states they operate in have specific laws that require them to register their intrastate carriers for USDOT numbers as well.

What Is a USDOT Number?

A USDOT number is a unique number that the DOT provides to an employer to identify its fleet vehicles and monitor its safety management controls. This number is how the DOT reports information obtained from roadside inspections, audits and crash investigations.

USDOT Number

Interstate vs. Intrastate

When employers are trying to determine whether they need a USDOT number, one of the areas they need to look at is whether their operations (e.g., trade, traffic or transportation) are performed in intrastate or interstate commerce.

Intrastate commerce is when an employer’s operations are exclusively performed within the state the company is domiciled (where the company has been registered or incorporated).

Interstate commerce is when an employer’s operations go outside the state it is domiciled in. For more specific information on interstate commerce, the Federal Motor Carrier Safety Administration (FMCSA) provides a detailed explanation here.

Does an Employer Need a USDOT Number?

A USDOT number is required for an employer using vehicles involved in interstate commerce and falling into one of the categories below:

  • Have a gross vehicle weight rating (GVWR), gross combination weight rating, gross vehicle weight or gross combination weight of 10,001 pounds or more;
  • Are designed or used to transport more than eight passengers (including the driver) for compensation; or
  • Are designed or used to transport more than 15 passengers (including the driver) and is not used for compensation.

In addition to the above requirements, employers are required to obtain a USDOT number when using vehicles to transport certain types and quantities of hazardous materials that require a safety permit in intrastate commerce and are involved in interstate commerce under FMCSA regulations. This means that an employer that is required to have a safety permit for transporting certain hazardous materials within their state, but also operate outside their state, must have a USDOT number.

If a motor carrier has any of those vehicle descriptions and is involved in interstate commerce, then a USDOT number is required as the vehicle is considered a commercial motor vehicle.

Employers can visit the FMCSA website for information pertaining to registration for a USDOT number. The FMCSA is part of the DOT. The FMCSA website provides an interactive tool that employers can use to determine whether they are required to have a USDOT number.

USDOT Number

Vehicles Weighing over 10,001 Pounds

Vehicles weighing over 10,001 pounds are the vehicles that confuse employers when it comes to DOT regulations. Vehicles or vehicle/trailer combinations that weigh more than 10,000 pounds but stay under 26,001 pounds are considered CMVs for FMCSA purposes. These CMVs are required to have a USDOT number if they are vehicles involved in interstate commerce and fall into one of the categories below:

  • Have a GVWR, gross combination weight rating, gross vehicle weight or gross combination weight of 10,001 pounds or more;
  • Are designed or used to transport more than eight passengers (including the driver) for compensation;
  • Are designed or used to transport more than 15 passengers (including the driver) and are not used for compensation; or
  • Are vehicles used to transport certain types and quantities of hazardous materials that require a safety permit in intrastate commerce and are involved in interstate commerce under FMCSA regulations.

Remember, just because an employer does not operate semi-trucks does not mean they do not fall under the FMCSA regulations.

CMVs that do not need a USDOT number under federal rules are those that are between 10,001 and 26,000 pounds, operate intrastate and do not carry any hazardous materials that require a safety permit. (Make sure to check state requirements.)

How to Determine the GVWR

The GVWR is the safety weight rating of a vehicle or a trailer. An employer must look at the vehicle, or the vehicle and trailer, to figure out what the total GVWR is for the setup they are running.

First, an employer should look at the GVWR of the vehicle, which is commonly located in the truck door jamb or inside of the door. This information is also located in the owner’s manual. This will give the employer the maximum weight of the vehicle. If it is over 10,001 pounds and falls within a category above, it needs a USDOT number.

Second, for combination vehicles, an employer must determine the weight of the trailer they will be using. The trailer weight rating is found on a visibly displayed sticker on the trailer or in the owner’s manual (if one is provided). If neither of these are available to provide a weight, then the employer must weigh the trailer to figure out the weight.

Third, the employer will need to determine the gross combined vehicle weight rating (GCVWR) to figure out the total weight of the vehicle and trailer. This is found by adding the vehicle weight with the trailer weight.

The combination weight rating is particularly important because most employers do not understand when they should be following FMCSA regulations while using a half-ton or three-quarter-ton pickup truck. Employers that are using half-ton or three-quarter-ton pickups and attaching them to trailers are often putting the combined weight over the 10,001-pound mark. This makes the vehicle (with the trailer) subject to DOT regulations, and it will need a USDOT number.

If employers are not aware of the trailers’ weight or are unaware of the FMCSA requirements and are pulled over, they can be fined under the DOT for failure to be properly labeled as a commercial motor vehicle. This will have an impact on their safety fitness score.

States That Require a DOT Number

All states need to follow the FMCSA regulations, but some states also require intrastate CMVs to obtain a USDOT number. The FMCSA provides a list of those that require a USDOT number for intrastate CMV registrants. Employers must make sure to also check their state agency for those requirements

What Happens Next?

Once the employer determines whether they need a USDOT number by checking the FMCSA website and with their state agency, the employer will have to register with the FMCSA or state agency (depending on the requirements) to obtain the unique identifying number. This must be done prior to any CMV operations. 

Registration instructions can be found on the FMCSA website. If an employer uses the interactive tool to determine whether they need a USDOT number, it will direct them to the unified registration system portal to fill out the application to apply for the USDOT number. Follow the prompts on the screen to submit the application.

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 commercial auto 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.

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!

Privacy and Cyber Security

Privacy and Cyber Security

Privacy and Cyber Security

With the enormous amount of sensitive information stored digitally, companies need to take the proper measures to ensure this data is never compromised. Ultimately, it is the responsibility of business owners to protect their clients’ data with privacy and cyber security.

Failing to do so can result in a data breach, which costs companies billions of dollars every year. Understanding the risks involved with data security can help you prevent a privacy breach.

Know the Privacy and Cyber Security Risks

The first step in protecting your business is to recognize basic types of risk:

  • Hackers, attackers and intruders—These terms are applied to people who seek to exploit weaknesses in software and computer systems for their personal gain. Although their intentions are sometimes benign, their actions are typically in violation of the intended use of the systems that they are exploiting. The results of this cyber risk can range from minimal mischief (creating a virus with no negative impact) to malicious activity (stealing or altering a client’s information).
  • Malicious code—This is the term used to describe any code in any part of a software system or script that is intended to cause undesired effects, security breaches or damage to a system.
    • Viruses: This type of code requires that you actually do something before it infects your system, such as open an email attachment or go to a particular Web page.
    • Worms: This code propagates systems without user interventions. They typically start by exploiting a software flaw. Then, once the victim’s computer is infected, the worm will attempt to find and infect other computers.
    • Trojan horses: Trojans hide in otherwise harmless programs on a computer, and much like the Greek story, release themselves when you’re not expecting it and cause a lot of damage. For example, a program that claims to speed up your computer system but actually sends confidential information to a remote intruder is a popular type of Trojan.

IT Risk Management Practices

To reduce your cyber risks, it is wise to develop an IT Risk Management Plan at your organization. Risk management solutions utilize industry standards and best practices to assess hazards from unauthorized access, use, disclosure, disruption, modification or destruction of your organization’s information systems.

Consider the following when implementing risk management strategies at your organization:

  • Create a formal, documented risk management plan that addresses the scope, roles, responsibilities, compliance criteria and methodology for performing cyber risk assessments. This plan should include a characterization of all systems used at the organization based on their function, the data stored and processed and importance to the organization.
  • Review the cyber risk plan on an annual basis and update it whenever there are significant changes to your information systems, the facilities where systems are stored or other conditions that may affect the impact of risk to the organization.

Due Diligence When Selecting an ISP

In addition, your organization should take precautionary measures when selecting an internet service provider (ISP) for use for company business.

An ISP provides its customers with Internet access and other Web services. In addition, the company usually maintains Web servers, and most ISPs offer Web hosting capabilities. With this luxury, many companies perform backups of emails and files, and may implement firewalls to block some incoming traffic.

To select an ISP that will reduce your cyber risks, consider the following:

  • Security – Is the ISP concerned with security? Does it use encryption and SSL to protect any information that you submit?
  • Privacy – Does the ISP have a published privacy policy? Are you comfortable with who has access to your information, and how it is handled and used?
  • Services – Does your ISP offer the services that you want and do they meet your organization’s needs? Is there adequate support for the services provided?
  • Cost – Are the ISP’s costs affordable and are they reasonable for the number of services that you receive? Are you sacrificing quality and security to get a lower price?
  • Reliability – Are the services provided by the ISP reliable, or are they frequently unavailable due to maintenance, security problems and a high volume of users? If the ISP knows that their services will be unavailable, does it adequately communicate that information to its customers?
  • User supports – Are there any published methods for contacting customer service, and do you receive prompt and friendly service? Do their hours of availability accommodate your company’s needs?
  • Speed – How fast is your ISP’s connection, and is it sufficient for accessing your email or navigating the Web?
  • Recommendations – What have you heard from industry peers about the ISP? Were they trusted sources? Does the ISP serve your geographic area?

Government Regulation

There aren’t many federal regulations regarding cyber security, but the few that exist cover specific industries. The 1996 Health Insurance Portability and Accountability Act (HIPAA), the 1999 Gramm-Leach-Bliley (GLB) Act and the 2002 Homeland Security Act, which includes the Federal Information Security Management Act (FISMA) mandate that health care organizations, financial institutions and federal agencies, respectively, protect their computer systems and information. Language is often vague in these laws, which is why individual states have attempted to create more specific laws on cyber security.

California led the way in 2003 by mandating that any company that suffers a data breach must notify its customers of the details of the breach. Currently, all 50 states and the District of Columbia have data breach notification laws in place.

Protection is our Business

Your clients expect you to take proper care of their sensitive information. You can never see a data breach coming, but you can always plan for a potential breach. Contact GDI Insurance Agency, Inc. today—we have the tools necessary to ensure you have the proper coverage to protect your company against a data breach.

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 cyber liability insurance quote!

Employment Practices Liability Trends to Watch in 2021

Employment Practices Liability Trends to Watch in 2021

Employment Practices Liability Trends to Watch in 2021

As an employer, you care about making your workforce feel valued and managing your organization successfully. However, even if you do everything you can to ensure smooth relationships with your staff, employment practices liability (EPL) risks remain. That’s why it’s crucial for your organization to have EPL coverage. Such a policy can offer protection for claims that result from employees alleging various employment-related issues—such as discrimination, harassment and wrongful termination. Apart from securing EPL coverage, it’s important to stay up to date on the latest Employment Practices Liability trends. In doing so, your organization will have the information needed to respond appropriately and make any necessary coverage adjustments. Don’t let your organization fall behind in this evolving risk landscape. Review this guidance to learn more about EPL trends to watch in 2021.

Employment Practices Liability Trends

The COVID-19 Pandemic and Employment Practices Liability Trends

The ongoing COVID-19 pandemic has forced many organizations to make serious workplace changes—such as having employees work remotely, adjusting office setups or conducting significant staff layoffs or furloughs. And with these changes, EPL claims followed. Some of the most common, pandemic-related EPL claims include:

  • Allegations that unsafe working conditions or minimal precautionary measures (e.g., poor sanitation practices, a lack of social distancing protocols or inadequate personal protective equipment) contributed to employees getting sick or dying from COVID-19
  • Allegations of retaliation after an objection to unsafe working conditions or workplace exposure to individuals displaying COVID-19 symptoms
  • Allegations of disability discrimination related to remote working (e.g., failing to accommodate remote staff or denying employees the option to work remotely)
  • Allegations related to employee leave concerns (e.g., forcing staff to take leave, retaliating against employees that take leave due to COVID-19 or not allowing staff to take leave due to COVID-19 altogether)
  • Allegations of laying off or furloughing staff without providing proper employment notices
  • Allegations of discrimination related to laying off or furloughing employees

With these trends in mind, it’s crucial to fully document and review any organizational changes created by the COVID-19 pandemic. These changes should be reviewed to ensure they adequately consider the needs of your workforce and are compliant with employment law.

Social Movements

Several social movements have led to an increase in Employment Practices Liability trends and claims in recent years, including the #MeToo movement and the Black Lives Matter movement.

The #MeToo movement—which is an anti-sexual harassment campaign that was originally founded in 2006 and has gained significant social media attention since 2017—largely contributed to a 50% rise in sexual harassment lawsuits against employers over the past few years, according to the U.S. Equal Employment Opportunity Commission (EEOC). This movement emphasizes how important it is for employers to implement effective sexual harassment prevention measures (e.g., a zero-tolerance policy and a sexual harassment awareness training program), reporting methods and response protocols.

The Black Lives Matter movement—which is a racial justice campaign that was originally founded in 2013 and resurged in 2020 in the form of nationwide protests—has the potential to become a driving factor in race-related workplace discrimination and harassment lawsuits. This movement makes it increasingly vital for your organization to take steps to promote diversity, acceptance and inclusion in the workplace, as well as take any accusations or reports of racism seriously.

LGBTQ+ Protections

Although the EEOC had previously released guidance stating that workplace discrimination and harassment based on sexual orientation, gender identity and gender expression violated Title VII of the Civil Rights Act of 1964, the U.S. Supreme Court just recently confirmed in 2020 that Title VII protects gay and transgender employees from such treatment. While this is a relatively new development, the Supreme Court’s decision highlights the need for your organization to ensure all LGBTQ+ employees feel properly supported in the workplace.

Employment Practices Liability Trends

Age Discrimination

According to the U.S. Bureau of Labor Statistics, the share of employees over the age of 55 in the labor force is expected to rise to nearly 25% by 2024 (up from 13% in 2001). This demographic shift makes it increasingly important for employers to take steps to minimize the potential for age discrimination issues within the workplace. After all, the Age Discrimination in Employment Act (ADEA) forbids age discrimination against employees and job applicants aged 40 and over.

Despite the ADEA; however, a recent Hiscox study found that 21% of U.S. employees have reported experiencing workplace discrimination based on their age. Such discrimination can lead to poor staff morale, a tarnished organizational reputation and an increase in EPL claims. With this in mind, it’s important to review your organization’s employment practices to ensure you are fostering a workplace culture that rejects ageism.

Wage, Leave and Salary History

As wage and hour laws continue to change across the country, it’s critical that your organization regularly reviews state-specific legislation related to minimum wage, employee classifications (e.g., hourly or salaried), overtime pay, sick leave and other paid time off. A failure to provide your staff with adequate wages or paid leave could lead to various EPL claims.

Employers’ ability to receive their employees’ prior salary history has also become a rising concern. In fact, in some states, recent legislation now prohibits employers from requesting or requiring salary history from a job applicant as a condition of being interviewed, hired or even considered for a position. In light of these changes, it’s best to speak with legal counsel for state-specific employee wage, leave and salary history guidance.

Employment Practices Liability Trends

Marijuana Legalization and Employment Practices Liability Trends

Following the 2020 election results, medical marijuana is now legal in 36 states and recreational marijuana is now legal in 15 states. As marijuana legalization becomes increasingly commonplace across the country, it’s crucial for your organization to review any state-specific legislation and adjust workplace policies and procedures accordingly.

Specifically, some states have enacted legislation that restricts an employers’ ability to conduct drug tests for marijuana. Further, several state court cases have ruled in favor of the employee in recent employment lawsuits related to marijuana usage. This includes a case in which a disabled employee sued their employer for alleged workplace discrimination due to medical marijuana usage, as well as a case in which an employee sued their employer for alleged wrongful termination due to a positive drug test for marijuana.

That being said, your organization may need to reconsider or revise procedures related to conducting workplace drug tests for marijuana or basing employment decisions on an employee’s marijuana usage, as these practices could potentially contribute to EPL claims. Be sure to consult legal counsel for state-specific compliance guidance on this topic.

We’re Here to Help

You don’t have to respond to this changing risk landscape alone. We’re here to help you navigate these EPL market trends with ease. For additional coverage guidance and solutions, contact us today.

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