The media is filled with articles about legislation that’s designed to reduce the impact of environmental pollution.
Unfortunately, the media tends to focus on the impact on large corporations, leaving many small-business owners under the mistaken impression that environmental pollution risk is nothing they need to think about. However, the actual situation is much more complex.
Pollution liability is a growing concern for owners of businesses of all sizes. From contractors to industrial manufacturing, your business could be at greater liability risk than you ever imagined.
An environmental pollution policy helps protect against a wide range of potential issues, including bodily injury and property damage as well as remediation costs both on a primary site and off-site or non-owned locations.
Environmental pollution protection can be purchased as a primary policy, a rider on another policy, per project or on a multiyear basis. Other popular options include the ability to protect against completed projects or projects in operation as well as owner-controlled or prime contractor/sub-contractor options.
There are many situations – both known and unknown – where a small-business owner may need an environmental pollution policy. One example could be when a company-provided vehicle spills hazardous materials and contaminates the surrounding area. Another could be when a builder inadvertently installs toxin-containing materials in new construction, leading to serious illness or injury among the occupants. Whatever the source, environmental pollution insurance is increasingly viewed as a valuable addition for transportation providers, including truckers, shippers, air and sea cargo vendors, construction industry professionals, manufacturing plants both small and large, disposal vendors, chemical suppliers and service industry providers.
The advantages of obtaining an environmental pollution policy go beyond the obvious risk factors. It’s an increasingly common option used by owners of businesses of all sizes to help reduce risk when purchasing a new property or business, obtaining funding or even attracting top talent.
For example, in most instances the directors’ and officers’ liability insurance will not cover litigation arising from environmental conditions. The addition of pollution insurance can dramatically reduce the uncertainty surrounding serving on the board of a growing company. Likewise, the purchase of a new business property or concern is an exciting time, but it also requires a leap of faith as the buyer is usually required to assume the environmental concerns – both on-site and off-site – of the acquired company.
The addition of environmental pollution protection is a great sales tool and also provides an increased level of protection against financial uncertainty.
Finally, financial institutions and private venture capitalists alike are becoming increasingly aware of the risk of legislative changes that could cause a property or company to lose value or restrict use and development in the future.
Environmental pollution policies are increasingly used as proactive measures to decrease the risk of a business being negatively impacted by future legislative changes.
Most investors understand that the basic benefit of fixed annuities is that they offer the potential for a guaranteed payment. Regardless of whether the economy or markets are performing well or poorly, an annuity pays a minimum amount of income every month. But just how much money should you put in an annuity versus other investments?
When it comes to fixed annuity allocation, some financial advisors recommend that you put no more than a third of your assets into annuities. Others recommend that you limit it to three-fourths of your assets. But that’s a big difference.
The reason for the discrepancy is that some financial advisors feel they can get better returns for their clients by investing in a diversified portfolio of securities. But that’s a harder sell today than it used to be, given the huge losses the stock market has experienced in the past few years.
So how much money should you allocate to a fixed annuity? As is the case with any element of a portfolio, fixed annuities are best used in moderation. That’s because they’re a compelling way to guarantee a certain amount of fixed income in retirement. If overdone, however, they can rob a portfolio of flexibility.
No single answer fits every investor, but one guideline is to use an annuity to cover your basic living expenses. You may have to put a significant part of your nest egg into the annuity to receive the amount you need, but you’ll know it will be there, through good times and bad.
Businesses that treat workers as independent contractors face an increasing risk that state and federal agencies will contest the classification of some of these individuals. Although independent contractor relationships have long been an audit target, governments experiencing deep financial pressures are scrutinizing them with new fervor.
Latest example: In his fiscal 2011 budget, President Obama proposes to focus more on employers using independent contractors. For the next fiscal year, the budget allocates $25 million to the Department of Labor for a joint effort with the IRS that includes hiring investigators to find workers who can be re-categorized as employees.
The result for Uncle Sam will be increased revenue. The Obama budget states the initiative will bring in an additional $7 billion over 10 years.
The budget initiative is the latest government effort to reclassify workers (see below for more examples).
When employees are misclassified as independent contractors, it often results in failure of the workers and employers to correctly pay income taxes, Social Security, Medicare and unemployment insurance taxes. That means substantial lost revenue to the federal and state governments.
What’s a Business to Do?
There are several steps a business can take to increase the chance that workers are properly classified as independent contractors.
1.
Have written, signed contracts with workers classified as independent contractors, spelling out the terms and conditions of the relationship. Consult with your attorney in the preparation of contracts.
2.
Once contracts are in place, give outside workers leeway over how they perform their duties. Resist the urge to supervise them the way you oversee employees.
3.
Send each contractor a Form 1099 showing non-employee income if you pay $600 or more in a calendar year. The annual deadline for sending these forms is January 31.
4.
Consistently treat workers performing similar tasks as either independent contractors or employees. Don’t supply outside workers with services you give employees. Some companies run into trouble after they provide office space, computers, cars and other perks.
5.
Maintain good records. Obviously, you need to keep an independent contractor’s taxpayer ID number and other information required by the IRS, but you should also keep items that help prove the person is self-employed. For example, business cards, a letterhead, invoices and advertisements placed in newspapers. Keep copies of business licenses and print out a contractors’ Web site pages showing that services are offered to the public. A simple listing in the yellow pages of the phone book is sometimes enough to convince an IRS auditor that an independent contractor is in business for him or herself.
6.
Do a self-audit of each worker’s or each class of workers’ status before a federal or state agency conducts one.
7.
Have your tax adviser, attorney or HR professional familiar with employment law in your state conduct an audit of each worker’s status.
What Does the IRS Look For?
Unfortunately, no single factor determines a worker’s status by the IRS, other government agencies or the courts. Each situation is determined by the facts and circumstances involved.
Here are some of the factors the IRS considers to determine if a worker is an employee:
Behavioral Control – An employee generally is told when, where, and how to work, as well as what order or sequence to follow.
Tools – An employer usually gives tools, equipment and workspace to employees. In contrast, subcontractors often provide and invest their own money in equipment, tools and facilities.
·Assistants – Employees don’t hire and pay others to help them do their jobs (although they may be told to hire assistants for the company). In contrast, contractors often hire, supervise, and pay their own assistants.
Training – Employees are more likely to receive training from an organization than independent contractors.
Other Customers – Independent contractors generally make services available to the public and are able to work for two or more businesses.
Integral Role – An employer-employee relationship is supported when workers perform a service essential to the success of a business operation.
Financial Control and Risk – An employer has the right to control the financial aspects of a job, such as the business expenses the employee incurs and how staff members are paid. On the other hand, a worker’s opportunity to personally earn a profit and assume risk of loss may indicate a non-employee status.
An IRS determination that worker’s status is an independent contractor status doesn’t necessarily bind other agencies (such as the National Labor Relations Board) in making their decisions. However, the IRS tests for making its determination can help an employer avoid misclassifying a worker.
Conclusion: During recent tough economic times, many businesses increased their use of independent contractors to cut labor costs. However, employers that misclassify workers as independent contractors can end up with substantial tax bills as well as penalties for failing to pay employment taxes. They may also face employee benefit liability. In some cases, workers sue for benefits they claim they were eligible for, including overtime, health insurance and retirement plan contributions.
With the increased scrutiny coming from the federal and state governments, it’s a good time to examine your organization’s use of independent contractors to ensure you are in compliance with all applicable laws
How Governments Are Targeting Organizations Using Contractors
In addition to the new budget program targeting independent contractors, here are some other examples of initiatives at the federal and state level: Random Audits – Beginning in February 2010, the IRS launched a three-year program to randomly audit 6,000 employers. These examinations will delve into compliance with employment tax issues, including the misclassification of independent contractors, fringe benefits, reimbursed expenses and the compensation of owner-employees. Information Sharing – The IRS signed information-sharing agreements in 2008 with labor and workforce agencies in 29 states, to assist them in uncovering employment tax avoidance schemes” and ensure proper worker classification.” Questionnaires Sent – In 2009, California sent employment relationship questionnaires to workers identified as independent contractors. The purpose was to determine if the workers should be classified as employees. The state’s attorney general is taking action against a construction company, seeking more than $4 million. Last year, California won a $13 million court judgment from two firms that misclassified janitors. Construction Focus – A 2008 Illinois law targets the construction industry and sets out heavy fines for misclassification. In one case, the state’s Department of Labor levied penalties of more than $325,000 against a home improvement company for categorizing employees as independent contractors. Increased Policing – An Iowa task force issued a 2009 report stating that about 15 percent of employers wrongly classified workers. The task force called for increased policing of classification in the state. Exemptions Required – Last year, Minnesota started requiring certain individuals who want to work as independent contractors in the construction industry to obtain an exemption certificate from the state Department of Labor and Industry. Multi-Industry Effort – New York continues a crackdown that began in 2008 targeting the construction industry, restaurants, car washes, janitorial firms, and trucking companies. Nearly 2,500 investigations were conducted with teams converging on some employers’ premises to audit records. The effort reportedly found more than 31,000 misclassification cases and assessed $11 million in unpaid unemployment taxes and $14.5 million in unpaid wages.
Independent Contractors Can Tip The IRS Off About Relationships
Be aware that the IRS has a couple ways for independent contractors to contact the agency about their employment status. In 2009, the IRS came out with new Form 8919 that allows workers who believe they have been misclassified as independent contractors to report half of the uncollected businesses Social Security and Medicare taxes due. Once the IRS has the information, it may contact the involved for the other half. In addition, IRS Form SS-8 allows workers or businesses to give the IRS information about a relationship and ask the agency to determine if an individual is an employee or independent contractor.
If you are in between jobs, one of the most important decisions you can make is how to obtain short-term insurance.
Many people make the mistake of thinking they can skip health insurance for a few months until landing another position. Unfortunately, it often makes a bad situation worse. Accidents, illness and other emergencies tend to crop up when you least expect them. Fortunately, short-term health insurance options are available if you know where to look. Compare Individual Coverage with COBRA: If you had health insurance through your employer, chances are you qualify for COBRA coverage. However, many people are surprised to find short-term health insurance for individuals to be more cost effective than COBRA, especially if they are in relatively good health without major pre-existing conditions. Don’t delay. Put in a call to my office right away to determine the most cost-effective policy for your needs. Select a Term: Short-term health insurance is typically sold in one-, three- and six-month increments, but there may be a limit on how many times you can renew the policy. It’s often a good idea to purchase for a longer period of time just to be on the safe side. You can always cancel the remainder of the policy if desired. HSA: Depending upon your situation, it may also benefit you to consider a HSA, or Health Savings Account policy. Although not specifically short-term health insurance, these high-deductible policies are often quite affordable. They tend to benefit those in relatively good health who are able to afford the large out-of-pocket deductibles, as well as those with chronic health conditions who would normally experience large annual co-payments. Additional Coverage: Don’t neglect add-on coverage just because you are in between jobs. In fact, it might be more important than ever to make sure that you are covered against accidents or have available vision, dental and prescription drug benefits to rely upon.
You can start off the New Year on the right foot by setting your goals in advance.
Many people find that establishing goals is more beneficial than setting resolutions.
Try the following simple starters to make sure that each goal you set is achievable and memorable and encompasses every aspect of your life:
Goals Rather Than Resolutions: By their very nature, goals tend to be positive and achievement oriented, but it’s still possible to take it a step further. Write down each goal and the benefit to be derived from reaching that goal. Keep it in a visible place as a constant reminder.
Round It Out: A healthy body leads to a healthy mind, but both are necessary for maximum performance. Take time to select at least one goal for your body, mind, spirit, finances and social life, and then share your goals with others. Don’t focus on the negative. Emphasize the positive instead. You’ll be surprised to learn how quickly each builds upon the success of the other and how willing others are to help you reach your goals once they know about them.
Reward Yourself: Make sure that you reward the small stepping stones of success along the way. Each goal should consist of smaller steps that are significant enough to garner recognition while remaining within reach for the allotted time. If you keep it up, it won’t be long before you begin to truly enjoy a New Year that transforms all your wishes into reality.
There are no insurance tips today. Today is about thanks. The past year has been difficult for many, both personally as well as business. Through my family, friends, and clients I have witnessed the strength and endurance of the human spirit in recent months and am thankful knowing that better times are ahead.
I’d like to wish everyone a happy holiday season and look forward to working with you next year.
Millions of dollars are spent each year for online insurance quote advertising. While shopping online for insurance is fast and convenient, there are a few dirty little secrets that might end up making it cost more than you realize. Find out why using an agent or broker beats shopping online for insurance.
Only advertisers: Online insurance quotes compare only the rates of companies that advertise on their website. Although it can be convenient to shop online for insurance, online insurance websites make money by selling advertising space. Insurance providers that don’t participate won’t show up in search results. Since brokers make money only when they sell policies – not when they sell advertising space – you can be sure to obtain the most competitive rates the broker has available.
No spam or solicitation: Not only do online insurance quote sites sell advertising space but many collect personal information for re-sell to other agents or companies. Carefully read the terms of use for the website prior to supplying personal information; in most instances you will discover the website requires users to “opt in” or release information in order to obtain a quote. Avoid spam and telephone solicitation by using a broker who provides an instant quote at your convenience rather than a website that makes money by selling contact information.
Personal service: Insurance is complex, so it should come as no surprise that terminology and other contractual situations can be confusing. Work with a broker who is able to inform you about available options that could impact your coverage or cost.
I wanted to wish all my clients, friends and followers a Happy Thanksgiving. I have lubed up my treadmill in anticipation of needing it this weekend. Tradition has always been a part of the Thanksgiving festivities, but as the family gatherings have come and gone, I found myself needing to add a curveball to the menu. I want to share a couple of sites that offer atypical recipes:
Everyone with – or considering – an in-home business must read this blog! Make sure that you and your business are getting the right protection!
If you are not working at home yet, you may be soon. For more and more Americans, their “commute” to work is from the kitchen or living room to the den or study. By some estimates, there are as many as 36 million home-based businesses in the United States, and that number is expected to grow rapidly.
Unfortunately, many of these home-based businesses, perhaps even most, do not have adequate insurance coverage. One study found that 60% of those who work at home may not have insurance for their business activities.
The study also found that most of those without business-specific insurance believe they are protected by their homeowners insurance. Actually, a homeowners policy does offer some coverage for home-based business, but it is minimal. It is probably not enough coverage.
If you are sued because of your home-based business activities — the company that hired you as a consultant believes your advice was dead wrong; the computer equipment you “fixed” doesn’t work; the cookies you baked made someone ill — your homeowners policy won’t protect you.
Further, if you have to temporarily shut down your business for whatever reason, the homeowners policy won’t allow you to recover the income you lost because of the shutdown. There are insurance policies available to home-based businesses that do provide these coverages.
Important Question: What’s the Scope of Your Business
Some home-based businesses don’t need much insurance beyond a homeowners policy, particularly those businesses that have minimal equipment, don’t have visitors, don’t often visit clients or offer fairly straightforward products. It is possible to add coverage to your homeowners policy for your business.
Be aware that these additional coverages, known as endorsements, don’t protect you if you are sued as a result of your business activities. Also, the endorsements usually don’t cover income lost. I strongly believe that business-related endorsements to homeowners policies aren’t a good idea for any home-based operation.
One fairly inexpensive option for home-based business owners is a stand alone policy which can protect you for all your business related exposures. The policy provides the standard coverages for businesses including fire, theft as well as coverages for business property, commercial liability and loss of income.
You can purchase a policy that offers coverage for business property. Also, you can buy business liability coverage with limits of $300,000 to $1 million. (If this sounds like a lot of coverage, it really isn’t. Lawsuits occur everyday, and the only protection is to have proper liabilty coverage in place)
In addition, the home office/in-home business policy provides some coverage for loss of valuable papers and records, accounts receivable and business property not located in your home. You can also buy additional coverage for equipment breakdown and theft.
If you conduct a large amount of your business away from your home, the best option available is a seperate policy.
The most extensive coverage for home-based businesses is available in a business owner’s policy, which insurance people call a BOP. If you stock a lot of inventory, manufacture fairly complex products or provide professional services where there is a significant risk of being sued by disgruntled customers, a BOP probably is the best option.
No matter what type of coverage you choose — whether it’s an endorsement to your homeowners policy, or a BOP — you should evaluate on a regular basis, at least once a year, whether your insurance is adequate. As your business grows, it’s quite possible it will outgrow your insurance coverage. The bigger your business, the higher limits of property and liability coverage you need.
While it might seem counterintuitive to practice how to relax, research shows it is possible to dramatically reduce anxiety, lower blood pressure and even aid healing by learning a few simple techniques.
Remember to Laugh.
Scientists have found that laughter produces a cascade of chemical changes that can actually aid healing. Take time to laugh and smile at every opportunity. It’s good for the body and soul.
Get a Grip. Researchers investigating a new way to reduce G-force blackouts among pilots discovered it was possible to lower blood pressure simply by focusing upon one’s hand grip. The Zona Plus is a popular device, but similar systems are also available.
Schedule a Siesta. Establishing a regular routine of sleep is nearly as important as how many hours you rest. Rather than fighting fatigue with caffeine or other chemicals, schedule a power nap early in the afternoon.
Talk. Anxiety, anger and other emotional factors often undermine our ability to fully relax. Stop playing it all back in your mind, and learn how to constructively talk about your feelings. Psychologists report it’s the best way to facilitate emotional health and decrease stress.
Walk. Taking a 10-minute walk is a great way to stay in shape and reduce tension throughout the day.
Watch Your Diet. Avoid stimulants like sugar, caffeine and other chemicals. Give your body the nutrition it really needs to stay in shape.
Adopt a Pet. They make great companions and can help you relax. It’s difficult to feel anxious when greeted by the unconditional love and adoration of your favorite four-legged friend.
