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Fair Employment Laws – Illinois Sexual Harassment Prevention Training

Effective Jan. 1, 2020, all employers in Illinois must provide annual employee training on workplace sexual harassment prevention. In addition, effective July 1, 2020, all provisions of the opens in a new windowIllinois Human Rights Act (IHRA) apply to every employer in the state, regardless of size (rather than just those with 15 or more employees).

These changes, among others, were made under new laws that the state enacted on opens in a new windowAug. 9opens PDF file , and opens in a new windowAug. 20, 2019, to expand existing protections against workplace discrimination and harassment. This document provides an overview of the law’s prohibitions and requirements related to sexual and other types of unlawful workplace harassment.

opens in a new windowIllinois Sexual Harassment Prevention Training FAQopens PDF file

Workers’ Compensation FAQ – NCCI COVID-19 Classification & Payroll Changes for Furloughed and Reassigned Workers

The National Council on Compensation Insurance (NCCI) has received numerous questions in the last few weeks regarding COVID-19 and the impact it may have on the workers’ compensation industry.  This FAQ speaks specifically to recent changes related to furloughed and reassigned workers. 

  1. What can a business owner expect when workers are furloughed but still being paid?

The NCCI has proposed a new classification code – 0012. This code will apply to payroll for workers who have been laid off (furloughed) from their jobs but are still being paid. This is a change from the existing NCCI rule concerning “idle time,” which requires payroll to be included in the employee’s usual classification.

This new 0012 classification would not be included in the premium calculation (effectively a $0.00 rate), but the employer would be required to track this payroll in their accounting records as a separate item.  The percentage allocation of payroll would not be allowed.  Consult your Crane Agency Broker if you are paying employees who are not working to determine if your current policy can be adjusted now, or if the new classification will be applied during the audit process at the end of the policy term.

  1. My business has limited operations due to COVID-19. As a result, employee job assignments and duties have been changed.  Does this affect how my payroll is classified on my current policy?

The answer to this question is, “it depends” on the specific circumstances. The first thing to remember is that it is the overall nature of the business’s operations that are classified, not the activities of individual employees (unless they are in one of the standard exceptions such as clerical, outside sales or drivers, etc.)  Therefore, it may be that the new duties are still within the scope of the original policy’s classifications.

If the business operations have changed substantially, then a new classification may apply. For example, if your business is making beer, but you are now making a hand sanitizer, that may require a new classification. The new classification would be effective on the date the change in operations was made. Your Crane broker can assist in determining if a new classification is needed.

Remember that it is the employer’s obligation to maintain payroll records in a manner that accurately tracks payroll for the different classifications.

  1. Many of our employees are now working remotely from their homes. Does this result in a change of classification?

As with many aspects of the unique situation caused by COVID-19, the answer again is, “it depends.” Clerical employees who are now performing their duties from home might be switched from class code 8810 “Clerical” to class code 8871 “Clerical Telecommuter.”  Other employees, such as drivers or outside salespeople, would remain in their existing classification, as would construction workers or repair service employees.

Note that if an employee’s residence is in a different state from their usual work location, the employer will want to add that state to section 3.A. of their workers’ compensation declarations page if it is not already shown in the policy declarations.

As with any rapidly changing topic, please visit the NCCI website for current guidance and the most recent updates related to COVID-19.  If you should have questions about your specific policy, please contact your Crane Agency Broker Unit to discuss the options available for your business.

Other Helpful Resources:

Edition Date:  04/20/2020

COVID-19 Stay-At-Home Guidance – Essential vs. Non-Essential Businesses FAQ

In late February, it became increasingly clear that community transmission of COVID-19 had already begun to take hold in communities throughout the United States.  Cities and counties on the West Coast were the first to take action by initially isolating more vulnerable groups, which included older citizens and those with underlying health conditions.  By mid-March, six counties in California became the first to enact “shelter-in-place” orders, and on March 19th, opens in a new windowGovernor Gavin Newsom mandated the countries first state-wide order.

To date, all but a handful of states have taken action to mitigate the spread of the virus.  On March 21st, opens in a new windowSt. Louis City and opens in a new windowSt. Louis Countyopens PDF file joined several other state and local municipalities to issue emergency orders to contain the spread of COVID-19.  opens in a new windowKansas City, Missouri, and opens in a new windowSpringfield, Missouri, have also released “Stay-At-Home” orders, which took effect on March 24th and March 26th, respectively.  On April 3rd, opens in a new windowGovernor Michael Parson issued a state-wide “ opens in a new windowStay Home Missouri” order that took effect on April 6th.

With so many different emergency orders issued at the state and local level, some businesses and individuals are left struggling to determine what is considered an essential or non-essential business.  To provide additional insight on this topic, Crane Agency has created 3 FAQ documents that provide further guidance:

opens in a new windowSt. Louis City & St. Louis County Stay-At-Home FAQopens PDF file

opens in a new windowKansas City, Missouri Stay-At-Home FAQopens PDF file

opens in a new windowSpringfield, Missouri Stay at Home FAQopens PDF file

The opens in a new windowCDC has also provided Federal Social Distancing guidelines, which currently extend through at least April 30th.  To practice social or physical distancing:

  • Stay at least 6 feet (2 meters) from other people
  • Do not gather in groups
  • Stay out of crowded places and avoid mass gatherings

It’s still too soon to say if these measures and their staggered implementation within states and across the country will do enough to slow the spread of COVID-19 to a manageable level.

Additional Resources:

opens in a new windowCOVID-19 Coronavirus Tracker (KFF.org)

opens in a new windowState Data and Policy Actions to Address Coronavirus (KFF.org)
To date, states have taken a number of actions to mitigate the spread of the virus and reduce barriers to testing and treatment for those affected. This data tool provides state-level information on:

2019 Novel Coronavirus (COVID-19) FAQ UPDATED 3.24.2020

This UPDATED FAQ covers the general topic of COVID-19 virus to explain how various insurance policies could respond to claim scenarios related to the COVID-19 virus. If your business experiences a loss, we recommend you submit a claim to your insurer. They will give their position about coverage under your policy. No one can say for certain what might happen in the future, but we always recommend insureds should submit a claim.  As always, please contact your Crane Agency Service Team with any questions and check the opens in a new windowCrane Agency Blog frequently for updates.

opens in a new window2019 Novel Coronavirus (COVID-10) FAQ UPDATEDopens PDF file

2019 Novel Coronavirus (COVID-19) FAQ

opens in a new window03.24.2020 – Please see our updated FAQ for additional guidance, as it pertains to COVID-19.

As concerns about COVID-19 continue to rise, many are left wondering what they can do to protect their families, businesses and their workforce.  In order to help our clients plan and prepare, Crane Agency has created a opens in a new windowFAQ opens PDF file document to help explain how some commercial insurance policies may respond.

The CDC has also provided interim guidance for opens in a new windowBusinesses and opens in a new windowFamilies on their website.  Recommended strategies for employers to use now:

Actively encourage sick employees to stay home

  • Employees who have symptoms of acute respiratory illness are recommended to stay home and not come to work until they are free of fever (100.4° F [37.8° C] or greater using an oral thermometer), signs of a fever, and any other symptoms for at least 24 hours, without the use of fever-reducing or other symptom-altering medicines (e.g. cough suppressants). Employees should notify their supervisor and stay home if they are sick.
  • Ensure that your sick leave policies are flexible and consistent with public health guidance and that employees are aware of these policies.
  • Talk with companies that provide your business with contract or temporary employees about the importance of sick employees staying home and encourage them to develop non-punitive leave policies.
  • Do not require a healthcare provider’s note for employees who are sick with acute respiratory illness to validate their illness or to return to work, as healthcare provider offices and medical facilities may be extremely busy and not able to provide such documentation in a timely way.
  • Employers should maintain flexible policies that permit employees to stay home to care for a sick family member. Employers should be aware that more employees may need to stay at home to care for sick children or other sick family members than is usual.

Separate sick employees

  • CDC recommends that employees who appear to have acute respiratory illness symptoms (i.e. cough, shortness of breath) upon arrival to work or become sick during the day should be separated from other employees and be sent home immediately. Sick employees should cover their noses and mouths with a tissue when coughing or sneezing (or an elbow or shoulder if no tissue is available).

Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees

  • Place opens in a new windowposters that encourage staying home when sick, cough and sneeze etiquette, and hand hygiene at the entrance to your workplace and in other workplace areas where they are likely to be seen.
  • Provide tissues and no-touch disposal receptacles for use by employees.
  • Instruct employees to clean their hands often with an alcohol-based hand sanitizer that contains at least 60-95% alcohol, or wash their hands with soap and water for at least 20 seconds. Soap and water should be used preferentially if hands are visibly dirty.
  • Provide soap and water and alcohol-based hand rubs in the workplace. Ensure that adequate supplies are maintained. Place hand rubs in multiple locations or in conference rooms to encourage hand hygiene.
  • Visit the  opens in a new windowcoughing and sneezing etiquette and  opens in a new windowclean hands web page for more information.

Perform routine environmental cleaning

  • Routinely clean all frequently touched surfaces in the workplace, such as workstations, counter tops, and doorknobs. Use the cleaning agents that are usually used in these areas and follow the directions on the label.
  • No additional disinfection beyond routine cleaning is recommended at this time.
  • Provide disposable wipes so that commonly used surfaces (for example, doorknobs, keyboards, remote controls, desks) can be wiped down by employees before each use.

Advise employees before traveling to take certain steps

  • Check the opens in a new windowCDC’s Traveler’s Health Notices for the latest guidance and recommendations for each country to which you will travel. Specific travel information for travelers going to and returning from China, and information for aircrew, can be found at on the CDC website.
  • Advise employees to check themselves for symptoms of  opens in a new windowacute respiratory illness before starting travel and notify their supervisor and stay home if they are sick.
  • Ensure employees who become sick while traveling or on temporary assignment understand that they should notify their supervisor and should promptly call a healthcare provider for advice if needed.
  • If outside the United States, sick employees should follow your company’s policy for obtaining medical care or contact a healthcare provider or overseas medical assistance company to assist them with finding an appropriate healthcare provider in that country. A U.S. consular officer can help locate healthcare services. However, U.S. embassies, consulates, and military facilities do not have the legal authority, capability, and resources to evacuate or give medicines, vaccines, or medical care to private U.S. citizens overseas.

Additional Measures in Response to Currently Occurring Sporadic Importations of the COVID-19

  • Employees who are well but who have a sick family member at home with COVID-19 should notify their supervisor and refer to CDC guidance for opens in a new windowhow to conduct a risk assessment of their potential exposure.
  • If an employee is confirmed to have COVID-19, employers should inform fellow employees of their possible exposure to COVID-19 in the workplace but maintain confidentiality as required by the Americans with Disabilities Act (ADA). Employees exposed to a co-worker with confirmed COVID-19 should refer to CDC guidance for  opens in a new windowhow to conduct a risk assessment of their potential exposure.  Please visit the CDC website for more information.

Other helpful resources include:

opens in a new windowHR Insights – Coronavirusopens PDF file

opens in a new windowRisk Insights – Protecting Workers from Coronavirusopens PDF file

opens in a new windowOSHA Safety Cornerstones Q1 2020opens PDF file

opens in a new windowLive Well, Work Well – Coronavirusopens PDF file

Helpful Websites:

opens in a new windowNational Institutes of Health – COVID-19 Landing Page

opens in a new windowNational Retail Federation – Coronavirus Resources for Retailers

opens in a new windowOSHA COVID-19 Website Landing Page

opens in a new windowUS Department of Education COVID-19 Landing Page

opens in a new windowUS Food & Drug Coronavirus Disease 2019 (COVID-19) Landing Page

opens in a new windowWorld Health Organization Website

We will continue to monitor current events, but as with any developing situation, please consult local and governmental health agencies for the newest developments.

Frequently Asked Insurance Questions When Selling or Closing a Business

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Periodically clients will close or sell their business due to retirement or other reasons.  These situations can affect insurance coverage for both the buyer and seller after the sale is complete.

1. I’m retiring and going to sell (or close) my business. Do I need to worry about the potential of future law suits, once the sale is complete?

Yes. Just because you are no longer in business does not mean that your risk of a goes away completely.

2. How can I be sued if I’m no longer in operation?

This depends on the type of business entity and the nature of your operations. However, here are two examples:

First, consider a small electrical contractor that has been in business for many years. The wiring job he did six months before he closed up shop may contain a defect – say an improper connection that works loose over time. Six months after he retires – a year after he finished the job – the bad connection starts a fire in the home. Chances are good that, once the cause is identified, the homeowner will sue you for having caused the damage.

In the second example we have a CPA that did tax returns for many years. A year after he retires, a former client is audited by the IRS and it is discovered that an error by the CPA results in significant penalties being added to the back taxes now due, and the client also needs to hire an expensive tax attorney to defend him. He will likely make a claim against you.

3. I’m no longer in business, how can they sue me?

First, as a general rule, anyone can sue anyone for any reason. Even if completely frivolous, it can still be very expensive to hire an attorney to defend you and get you out of the situation.  Second, it also depends on what type of legal entity you were while in business. Sole proprietors and partners leave their personal assets completely exposed even after they sell or close the business. LLCs and corporations can offer some protection for your personal assets, but the corporate assets remain exposed. After a business is sold or closed there may be a period of time where assets remain in the corporation while details are wrapped up. It is during this period that you remain at risk.  You should review your situation with an attorney to determine the best way to handle things.

4. I’m the electrician in question #2 and am getting sued. Won’t my old insurance policy protect me? I didn’t renew it after I closed up shop since I wasn’t in business.

You likely have a problem. In our example above, the fire did not happen until after you let your policy expire. The standard general liability policy only covers occurrences that take place during the policy period. No policy in force when the fire happened? No coverage. (Note the standard GL policy will cover claims that happened during the policy period even if they are not reported until after expiration.)

5. If my old policy is no good for claims that happen after it expires, what can I do?

There are two approaches for this situation. First, you may consider renewing your policy or buying a specialty “discontinued products or operations” policy that covers at least the time period that assets will remain exposed. You’ll need to have your insurance broker check your available options.  Second, if you are selling your company, is to have the buyer add you to their policy as an insured or agree to indemnify you for the period during which you are at risk. If they will agree to this, it should be made part of your written buy/sell agreement.

For LLCs and corporations, once the legal entity is completely defunct and no longer has assets, you should be able to drop the insurance policies. You will want to review this with your attorney and also have him review how the statute of limitations or other laws may apply.

6. I’m the CPA in question #2 and am getting sued. Won’t my old insurance policy protect me?

I didn’t renew it after I closed up shop since I wasn’t in business.  You may have a problem if you didn’t take advantage of the opportunity to buy a “tail” (also known as an “extended reporting period”) when you canceled your accountant’s professional liability or let it expire. This is a special provision for most professional liability policies that allows you to receive continued coverage for claims that are later reported involving the work you did prior to quitting your business.

7. I’m not an electrician nor a CPA. I’m selling my business so I can retire. What do I need to do?

There are far too many different types of businesses to give recommendations for each in a short FAQ.  It also depends on how the buyer is purchasing your company. In general, the transaction will be one of two types: a stock acquisition or an asset-only purchase.

8. What is the general difference between the two?

A stock purchase is where you sell the entire company as it is currently structured. “XYZ, Inc.” will continue to operate as exactly the same company after your purchase. From an insurance perspective, the most important thing to understand is that the buyer has purchased XYZ’s liabilities along with their assets. They’ll be responsible for any claims that are discovered even if they took place prior to their purchase.

An asset purchase means that you have sold only the physical assets of the company, typically along with their customer list and goodwill. The responsibility for liabilities that were incurred prior to the purchase remain with you. This arrangement typically means the seller will need to change the name, even if slightly. “XYZ, Inc.” could become “XYZ, LLC” for example.

9. So, as seller, I want this to be a stock sale?

There are advantages for the seller when it comes to liability claims. However, keep in mind that just because the seller wants a stock sale or requests the buyer provide a certain type of insurance or  indemnification does not mean that the buyer will agree to it. The results of those business negotiations may increase the buyer’s risk in certain areas and thus they may be reluctant to agree to those provisions.  However, it is important that both the buyer and seller work closely with their respective attorneys, accountants and other advisors including insurance brokers. The types of insurance needed for various businesses can vary widely depending on the nature of their operations, products and business activities. Also, let your insurance broker review the indemnification and insurance sections of the buy/sell agreement. Who is required to indemnify who and under what circumstances can vary widely.

For the best possible outcome, it is most important to keep all of your advisors informed and working together as a team on your behalf.  If you would like more information on how Crane Agency can help protect you and your business, please contact us today.

Related – opens in a new windowFrequently Asked Questions When Buying A Business

Frequently Asked Insurance Questions When Buying A Business

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When buying a business, it is important to be aware of any potential insurance challenges a business owner may face depending on the type of purchase.  In this FAQ, Crane Agency will  examine the differences between a Stock Acquisition and an Asset-Only Purchase.

1. I’m going to buy someone else’s business. What insurance issues do I need to worry about?

This can be a complicated situation. Typically, the first question your insurance broker will ask you is what type of purchase – a stock acquisition or an asset-only purchase?

2. What is the general difference between the two?

A stock purchase is where you purchase the entire company as it is currently structured. “XYZ, Inc.” will continue to operate as exactly the same company after your purchase. From an insurance perspective, the most important thing to understand is that you have purchased XYZ’s liabilities along with their assets. You’ll be responsible for any claims that are discovered even if they took place prior to your purchase.  An asset purchase means that you have purchased only the physical assets of the company, typically along with their customer list and goodwill. The responsibility for liabilities that were incurred prior to the purchase remain with the seller. This arrangement typically means you will need to change the name, even if slightly. “XYZ, Inc.” could become “XYZ, LLC” for example.

3. What potential insurance issues might I face with a stock purchase?

A stock purchase means you need to review the existing liability policies (general liability, auto liability, workers’ compensation, umbrella, professional and management liability) very carefully.  In liability claim situations, it can be months or even years before someone comes forward with their claim or lawsuit. For example, consider a company that sells small household appliances. A fire breaks out in a home and, months later, investigators determine the fire was caused by the faulty toaster purchased from the business that now belongs to you.  Since the fire started before you bought the company, the claim would be paid for by the general liability policy that was in force the day the fire happened. That means you will need to report the claim under the insurance policy in force prior to your purchase. If the prior owner had inadequate insurance, or none, that means you are responsible for an uninsured or underinsured claim.

4. What does potential insurance issues might I face with an asset purchase?

An asset purchase means that while you acquire the business assets of the company, the preexisting liabilities of all types – loan and contractual obligations, lawsuit liabilities, etc. – remain with the seller. This applies even if the prior liabilities are unknown at the time of the sale.  Generally speaking, this is good news for the buyer. However, this doesn’t automatically make all problems go away. The public at large is often unaware of the change of ownership (particularly if the company name or DBA doesn’t change much). If a lawsuit or claim arises, you stand a good chance of having those papers delivered to you. While the prior owner may still end up ultimately responsible for the claim, you may incur legal expenses to defend yourself and get dropped as a defendant.  Even that doesn’t necessarily guarantee that you’re out of the picture, especially if the prior owner had inadequate or no insurance. Plaintiff attorneys can be quite the bulldogs when looking for a deep pocket. From that perspective, it still behooves you to make sure the prior owner had appropriate coverage in place. You may even want them to purchase a specialty “tail” policy that continues to provide coverage for claims that happen after the sale, but which involve products sold or operations performed prior to that.

5. What about other policies such as those for property insurance, contractors’ equipment, crime, auto physical damage and others?

Prior to the purchase, these types of policies are primarily for the seller’s benefit. As “first-party” policies, they provide coverage for the physical loss of the seller’s own property. However, for both stock and asset purchase sales, a buyer still has a general interest in knowing that the property he is buying is fully insured prior to his purchase. What if there is a fire, auto accident or embezzlement discovered just days or weeks before the closing date of the sale? If underinsured (or no insurance at all), this could greatly complicate things, even to the point of canceling the purchase of the business. With proper coverage in place, both the seller and the buyer will know that the property will be repaired or replaced to its condition prior to the loss.

6. Can I simply keep the seller’s current policies in place with no changes?

The answer to that question is “it depends.” Most commercial insurance policies contain a condition that states the policy may not be transferred to another party without the insurance company’s written consent.  This means that if the acquisition is a stock purchase and the named insured will remain exactly as before, with only a change in the underlying ownership, you may be able to continue the existing policies as-is. Even then, many insurers will want to re-underwrite the policies once they find out the ownership has changed.  If the sale is an asset purchase, this will mean that the named insured will be changing. You will not be able to assume the prior owner’s policies unless the insurance company specifically approves the change and issues a policy endorsement. Often, even if the carrier is willing to continue writing coverage, they will want to cancel the current policies and issue new ones effective the date of the sale.  Either way, we recommend that you use this opportunity to completely review the insurance program. Often you will find that the insurance philosophy of the old owner is not the same as yours. The date of the sale is an excellent time to review and update coverages, whether you maintain the existing policies or not.

7. What other issues should be considered?

It is important that both the buyer and seller work closely with their respective attorneys, accountants and other advisors as well as their respective insurance brokers. The types of insurance needed for various businesses can vary widely depending on the nature of their operations, products and business activities.  For example, some businesses may have a serious need for pollution insurance, while that may be a relatively remote potential for loss for others. Pollution can be a big issue if you are buying a building or land that may have had hazardous operations in the past. Under the Federal Superfund law, you can find yourself responsible for the clean-up of that pollution and related claims even though you had no part in creating the problem.  Also let your insurance broker see at least the indemnification and insurance sections of the buy/sell agreement. Who is required to indemnify who and under what circumstances can vary widely. Also, keep in mind that just because the buyer requests the seller provide a certain type of insurance or indemnification does not mean that the seller will agree to it. The results of those business negotiations may increase the buyer’s risk in certain areas and therefore the need for certain types of insurance.

For the best possible outcome, it is most important to keep all of your advisors informed and working together as a team on your behalf.  If you would like more information on how Crane Agency can help protect your business, please contact us today.