Nikki Johnson No Comments

Lifestyle Planning Tips

You have until March 2, 2020 to contribute to your RRSP (Registered Retirement Savings Plan), assuming your contribution is intended to reduce your tax obligations owing for 2019, or generate a bigger refund, come April 30th.  The question, however:  is an RRSP the right instrument for you? 

An individual RRSP is one of the most common types of personal savings plans. Individuals—as well as their spouses or common-law partners—can contribute to these plans up to an annual limit using a mix of investments, including stocks and mutual funds.

What’s more, individual RRSPs have two tax benefits that help you save for your retirement:

  1. Tax-sheltered growth—Investment income in your RRSP isn’t taxed while within the plan. In most cases, investors won’t have to pay any tax until funds are withdrawn. Because you may be in a lower tax bracket once you’re ready for retirement, your total savings can be significant.  However, if you have pension income and/or income from other sources it may be combined with the funds withdrawn from the RRSP for the purposes of calculating your income tax due.  It is possible to create a tax liability for yourself.  Careful planning is essential to minimize tax implications.
  2. Tax deductions—Individual RRSPs can be used to reduce your income tax, as contributions are deductible within specified limits.

In addition, investors can withdraw funds from their individual RRSPs without being penalized, provided the money is repaid by a specified time. This can be particularly useful for large purchases, like buying your first home or paying for your education. That said, if the withdraw is not repaid within the specified time frame, the amount withdrawn will be added to the income earned in the year and the tax assessed on the total income earned.  The penalties can be significant.  Best not to withdraw if you don’t have the capacity to repay the amount in full within the required time frame. 

There are a number of qualifications you must meet in order to open an individual RRSP. Simply put, if you have earned income and file an income tax return in Canada, you can contribute to an RRSP until Dec. 31 of the year you turn 71. You must also have contribution room available, which will be stated on your annual Notice of Assessment sent by the Canada Revenue Agency.

One need also consider the benefits of a TFSA (Tax Free Savings Account) For Canadians 18 years of age or older, TFSAs are a great investment tool. Unlike traditional savings accounts, TFSAs allow you to increase your savings without having to pay tax on the growth within the account. In addition, TFSAs have the following benefits:

  • TFSAs provide flexibility, account owners can use them to save for a variety of uses like home improvements, vehicles, vacations and emergencies. You can withdraw money at any time, for any purpose. Many Canadians invest in a mix of cash, stocks, bonds and mutual funds.
  • TFSAs can be used as an alternative source of income following retirement. What’s more, TFSAs do not need to be converted to income, which provides retirees with a tax-free way to save throughout retirement.
  • TFSAs are a good substitute for registered education savings plans if you’re not sure your child will pursue a post-secondary education but still want to set aside money for them.
  • Income from a TFSA does not affect an individual’s eligibility to receive:
    • Old age security
    • Guaranteed income supplement
    • Goods and services tax credit
    • Other income-tested benefits and tax credits
  • Account owners can contribute up to $5,500 a year. In addition, you can re-contribute any amount you withdraw. In the event that you can’t make your full contribution in one year, you can make up the difference in future years.
  • In the event that the account holder dies, funds from TFSAs can be transferred to a spouse. This can be done without affecting the spouse’s existing TFSA or contribution allowance.

Let us not forget the benefits of a RESP (Registered Education Savings Plan).  An RESP is an investment option sponsored by the Canadian government that helps individuals save for their child’s, grandchild’s, niece’s, nephew’s and similar beneficiary’s post-secondary education. Plan subscribers—those that open an RESP and make contributions into it—designate a beneficiary who can then use the funds to cover expenses related to apprenticeships, trade schools, colleges and universities.

Subscribers can enrol in RESPs simply by opening an account with a bank, credit union or other financial institution. The first $2,500 you contribute each year gets a 20 per cent matching contribution from the federal government using what’s called a Canada Education Savings Grant (CESG). Under CESGs, beneficiaries are entitled to $7,200 of government contributions.

In addition, RESPs have the following benefits:

  • RESPs are flexible, and anyone can open an account for a beneficiary. There are two basic types of RESPs—family and individual plans. The major difference between the two is that, with family plans, subscribers can name more than one beneficiary and funds do not need to be shared equally.
  • Subscribers can contribute any amount to an RESP. However, there is typically a lifetime contribution limit of $50,000 per beneficiary. There are no limits on the number of plans subscribers can establish or RESPs a beneficiary may have.
  • RESPs allow subscribers to get an early start on saving for their beneficiary’s education expenses. In fact, RESPs can be opened as soon as the beneficiary has a social insurance number.
  • Subscribers don’t pay taxes on contributions until the money is taken out. Account holders can make lump-sum contributions at any time or set up automatic payments.
  • Qualifying investments include savings deposits, guaranteed investment certificates and mutual funds.

At the end of the day, one or all of these tools may be right for you along with a mix of other investment vehicles.  The choice of which and the amount of money one invests in each is entirely dependant on what your lifestyle goals are. Many do try to go it alone and some can have success.  Ideally, find an investment adviser that shares your personal values, is a right-fit for you and take the time to listen to what they have to say, ask questions and participate in the development of a comprehensive, flexible and personalized plan that reflects your ability to finance today and that will be able to meet your future lifestyle goals and expectations.  Mistakes can cost you dearly in tax penalties and fees.    

Darren Reith BA,RIB(Ont),RFC,RCIS, CHS

Partner/Director-Financial Services

Reith & Associates Insurance and Financial Services Limited

Tel. 519-631-3862 x 224

Fax. 519-631-0386

Email: Darren@reithandassociates.com

Nikki Johnson No Comments

The 10 Most Common Life Insurance Myths

Life insurance. Just the term itself can put people on edge. People might think they are wasting time and money if they sign up for life insurance when they don’t consider it necessary.

However, you should purchase life insurance because it will be essential sometime in the future. Life insurance protects your loved ones in case something happens to you by designating beneficiaries who will collect financial benefits upon your death.

Term life insurance is generally the simplest and cheapest form—you buy coverage for a specific time period, and it can usually be renewed, but premiums will increase based on age and health factors. All other types of life insurance are permanent, but there are a few varieties—whole life, universal life and variable life. Each type is slightly different, making each one ideal for certain types of people.

The ten myths listed below are some of the largest misconceptions individuals have regarding the necessity of life insurance.  Read on to learn why life insurance is important to purchase.

Myth 1:  I just simply don’t see the need for life insurance.

No one is immune to having to pay back his or her financial obligations after death. If you have a vehicle to pay off, or credit card or student loan debt that has accumulated, life insurance is a very beneficial option for you. If you die unexpectedly, no one waves a magic wand and makes those responsibilities disappear—you have to make the preparations to take care of them, or your family members will be stuck with the bills.

Myth 2:  I’m young. Why would I start spending my money on life insurance now?

Being young also usually means you’re more active and probably putting yourself at risk more often than the older generation by travelling, clubbing, hiking, boating, driving longer distances and staying out later. Your body may be younger and less likely to break down on you, but your high-risk activities put you in the same boat as older, less healthy people.

Myth 3: I’m a stay-at-home parent.

There isn’t a need to replace my income, since there isn’t an income to replace. If you’re a stay-at-home parent and you pass away, your spouse may not be able to afford childcare for your kids. Or, if there is no partner in the picture, your relatives or friends might not be able to take care of your children in a way that allows them to attend the same school, with the same parenting style you used, etc. Also, when the time comes for college, you will want your children to have the option of affording the education they desire.

Not having an income and staying at home means you are saving money you would be spending from a spouse’s income (or from any other source of income) on childcare and even on tending to your home. When you’re gone, those things still need to be covered, and life insurance can do that for you.

Myth 4: My kids are all adults and my house has been paid off, so what do I need life insurance for?

Everyone has daily living expenses. Just because the home is paid off doesn’t mean there aren’t other financial obligations for which your spouse would be responsible, such as owning multiple cars, a boat, an RV or another large purchase you both made later on in your lives.

Also, consider this: If your spouse outlives you by 10, 20 or even 30 years, he or she might not be able to afford to stay in an assisted living centre when he or she can no longer take care of him- or herself. You need to ensure that your spouse continues living with the same financial security he or she has with you now. You don’t want your spouse to fear having to take care of daily expenses with only half the income.

Myth 5: I’m a smoker. Insurance companies won’t even consider me.

Being a smoker doesn’t mean you can’t get coverage. Your premium will be a bit higher than the premium for someone who doesn’t smoke, but it is more affordable than you may think.

Myth 6: Even if I quit smoking, I’ll always be considered a smoker to insurance companies and be stuck paying a higher premium.

Most insurance companies consider you a non-smoker if you’ve stayed away from cigarettes for at least a year. Even if the first six months were an accident because your spouse hid your cigarette packs, you can most likely get your premium lowered after a year.

Myth 7: Life insurance seems too good to be true.

It can seem that way, but it’s not. Life insurance isn’t like one of those free vacation spam emails—it’s the real deal. As long as you keep paying the premium, you’re covered, whether that is until your kids move out or until your home is paid off.

Myth 8: It is too much of a hassle to obtain life insurance.

Finding life insurance isn’t as hard as you think. Getting a life insurance quote is quick and painless. All you need to do is provide basic information about yourself, including your height, weight, age and gender. Once you have a quote, you can choose the right coverage for you.

Myth 9: I get life insurance through my job.

Why would I need more? The life insurance you get through your job might not be adequate coverage. You should compare your family’s living expenses with your coverage to see if it’s sufficient to cover all of your family’s needs. You should be thinking about future responsibilities as well, like being able to pay for your children’s education after you’re gone.

Also keep in mind, like all good things, your employer-paid coverage ends when the coverage limit is met—which is the maximum amount your employer will pay out upon your death. Most experts suggest obtaining coverage five to eight times your yearly salary. If you are only covered for half of that amount, what will your family do when their living expenses exceed that amount?

Myth 10: My mortgage lender provides me with coverage. Isn’t that enough for me?

Your mortgage isn’t the only expense your spouse or children will have to take care of if you pass away—there are cars, college education, food, medical expenses, funeral costs—the list goes on. Life insurance can cover those for you.

By: Dan Reith BA(Hons) CAIB
President/Principal

Nikki Johnson No Comments

Insuring Your Intellectual Property

intellectual property concept

By:  Dan Reith BA(Hons) CAIB

        Principal Broker

        Reith & Associates Insurance and Financial Services Limited

As intellectual property becomes a vital part of more firms’ assets, businesses must consider the additional exposures they face. There are several types of intellectual property protected under federal law:  trademarks, copyrights, patents, trade dress and trade

secrets. To help protect your business, there are two types of intellectual property coverage available: the first protects a company sued for infringement by paying for legal defence, and the second helps pay the legal expenses of suing an alleged infringer.

If your company could be sued by a competitor for infringement or intellectual property theft, or you do not have the funds to cover legal fees associated with defending your patent or trademark, it is vital that you purchase coverage. Defending infringement litigation can cost hundreds of thousands of dollars, not including the cost of damages and prejudgment interest. In patent

infringement cases, attorney’s fees can easily top $1million.  Budgeting and planning for the protection of intellectual property rights may not only save your company a significant amount of capital; it may also help keep your business viable when legal bills accumulate rapidly. There are several options to cover these exposures: the “advertising injury” provision in the standard Commercial General Liability policy, endorsements to Errors and Omissions policies and specialized policies offered by

certain insurers specifically designed for the protection of intellectual property rights.

Commercial General Liability Policy – Advertising Injury

The Commercial General Liability Policy, or CGL, is a standard liability policy offering broad coverage. Coverage for an advertising injury often falls under Coverage B in a CGL. Any act by the insured that somehow violates or infringes on the rights of others

(referred to in the policy as an offence) is the subject of personal and advertising injury liability coverage, although only those acts that are specifically listed in the policy are covered. The coverage under the “advertising injury” provision is limited to those injuries that are directly related to the advertisement. Therefore, the policy covers debts owed by the insured party due to claims filed against it. Coverage B policyholders are sometimes covered in cases relating to trademark infringement; however, copyright

claims are only successful where they are directly related to advertising, and patent claims are rarely covered under the “advertising injury” provision. The cases which allow for coverage in a patent infringement case are generally limited to instances in which a court finds contributory infringement or inducement to infringe through an advertising medium. Since the “advertising injury” provision in a standard CGL is rather limited, many businesses consider additional coverage.

Special Endorsements and Policies

Beyond the CGL, specialized policies can be better suited to a business’s unique exposures. These are Errors and Omissions liability policy endorsements that can vary in focus from media and communications to patent infringement. Note that these policies have not been the subject of much litigation, and therefore, judicial guidance on coverage determinations is comparatively limited. It is important to consider multiple carriers, since available coverage varies widely from carrier to carrier.

Infringement Defence and Abatement Insurance

A third option relates primarily to patents, though riders for copyrights and trademarks may be available. Carriers have developed policies specific to intellectual property, generally with patents in mind. In relation to patents, there are three basic policy types: defence and indemnity, defence only and offensive, or infringement, abatement insurance. A defence and indemnity policy provides defence coverage in a patent infringement suit and, if the party in question is found liable, pays for damages, including prejudgment interest. A defence only policy, much like it sounds, covers only the cost of defence and does not cover damages awarded to the successful party. In addition, an offensive policy covers only the costs of pursuing an infringer. Certain carriers will amend some of

the above-mentioned policies to include endorsements for trademark and copyright infringement for an additional premium.

Exclusions to Coverage

In addition to special exclusions, there is a general exclusion to the CGL stating that there is no coverage “for an offence committed by an insured whose business is advertising, broadcasting, publishing or telecasting.” With the increase in claims, many carriers are drafting exclusions that specifically omit coverage for copyrights that fall outside of infringement of copyrighted

advertising materials, patents, trademarks and the like.

It is important to be aware of the exclusions to any policy

that you purchase. The most common exclusions

specified in intellectual property policies are for wilful infringement, anti-trust violations, infringement existing or known on the effective date of the policy and criminal acts.

Asserting Coverage

To maximize coverage, there are a number of steps that your company should follow. Failure to investigate the existence of overage in a timely manner can absolve a carrier of liability and create grounds for a malpractice case against the intellectual property legal counsel. While courts have held outside intellectual property counsel liable for failure to pursue coverage determinations, companies should still proactively recognize and review the potential for insurance coverage for protection of their intellectual property assets.

1. If a claim has been asserted against your company, you have a duty to notify your carrier. In fact, notifying your carrier immediately is in your best interest because a delay could be grounds for denying coverage. In the case where a formal complaint has been served on the company, the following six steps are recommended.

2. The policy or policies should be analyzed by counsel to determine under which policies the claim may be covered. In this step, the complaint should be closely examined for types of issues raised and should be compared to the relevant policy clauses.

3. The company should promptly tender defence to the carrier. In the tender, all policies that may provide coverage should be identified, including the specific clauses.

4. Demand a prompt response to the tender. If a sufficient extension of the time to answer is not granted, it is possible that a response to the complaint will be due prior to the issue of coverage being resolved. If that is the case, then defence counsel should

be retained until the issue of coverage is determined.

5. Review the carrier’s response to the company’s tender. The carrier may accept defence; it may defend under a reservation of rights; the carrier or the policyholder may seek a declaratory judgment for a coverage determination; or it can reject tender.

6. If there is a conflict in the interests of the carrier and the policyholder, the policyholder should insist on the right to control the litigation and should further insist upon independent counsel.

7. Be diligent about which documents are shared with the carrier, especially in cases where the carrier has reserved its rights to deny coverage. While the policyholder has a duty to cooperate with the carrier, in a case where a reservation of rights to deny coverage

has been tendered, the production of certain documents to the carrier could result in the waiver of the attorney client privilege as to the subject matter of the produced documents.

Comparing Policies

Insuring your company’s intangible assets and its liability is a vital part of risk management. Insurance for both infringement of ntellectual property and for an assertion of infringement against your company can provide financial security and peace of mind.

Reith & Associates Insurance and Financial Services Limited will compare your desired coverage to the specifically named offences in policies based upon enumerated risks and will examine any exclusions that may weaken the coverage you seek. We are skilled at

identifying the perils associated with intellectual property and high-technology companies, and we can assist you in selecting the right policy. Let us help you protect your most precious assets. Contact us today to ensure that the coverage you buy meets your needs in today’s marketplace.

Nikki Johnson No Comments

The Staggering Costs of Workplace Bullying

According to the Workplace Bullying Institute, almost 40 per cent of workers report having been bullied. Bullying can cause emotional and physical damage to employees; such damage often includes feelings of inadequacy and low self-esteem, which can lead to problems like anxiety, depression, hypertension or migraine headaches.

Bullying can also financially damage your company. You may end up with legal fees if a victim makes a legal claim against the bully or your company. You may need to send a victim to counseling to help with anxiety, stress or depression. Or you may need to send your employees to classes for anger management, leadership training or sensitivity training to encourage a bullying-free workplace. But bullying can cost you a lot more than legal fees or employee counseling. The following are more ways workplace bullying can affect your company financially.

Decreased Productivity

Bullying directly affects a victim’s confidence and is likely to decrease his or her productivity at work. Victims may also experience high anxiety, which can be very distracting and even debilitating.

Reduced productivity is bad for business and can lead you to discipline the employee, take away responsibilities or possibly terminate him or her. You may not realize the employee is being bullied, and therefore do not have the chance to offer any counseling or other assistance.

Increased Absenteeism

A bullied employee may go to great lengths to avoid a high-stress situation at work. Calling in sick or using a large amount of paid time off at once are common tactics used to avoid a bully.

Other employees may have to make up the extra work, possibly resulting in overtime, complaints or even more bullying behaviour. An excessive number of lost working days benefits no one.

High Employee Turnover

A 2014 survey by the Workplace Bullying Institute found that for 25 per cent of respondents, the best solution to stop bullying was to quit their jobs. Nineteen per cent of the respondents felt forced to quit when circumstances were made deliberately worse.

Each time an employee leaves the workplace, you have to recruit, hire and train a new employee. An unstable work environment like that is expensive and time-consuming, and can be exhausting to existing employees.

Workplace bullying also causes a decline in morale for employees who are not victims of bullying. These employees may be less likely to interact with others out of fear of being bullied themselves, and this may create a hostile or uncomfortable work environment. This could cause the workplace to have a higher turnover rate as employees throughout the company suffer the effects of a not-so-happy work environment.

Negative Impact on Company’s Reputation

Victims of bullying are likely to talk to friends or family about what is going on and how they feel about it. This information can spread quickly and sour your company’s public image.

A poor public image is especially destructive to a company that depends on the public for patronage, such as a restaurant or a landscaping company. A negative image can also deter jobseekers from applying to your company, making it more difficult to recruit new employees.

Bullying Prevention

You can control the risk of bullying in your workplace by following these tips:

  • Develop a workplace bullying policy (and follow it). Use clear language to define what behaviour your company considers to be bullying.
    • Include information on how to report bullying.
    • Document, investigate and follow up on every report of bullying.
    • Make it clear that employees will not be retaliated against for reporting bullying.
  • Establish expectations of appropriate behaviour and the consequences for employees who fail to comply with those expectations.
  • Provide training, education, information and awareness on workplace bullying for all employees.
  • Provide clear job descriptions that include an outline of the specific roles and responsibilities for each position within the workplace.

We Can Help

Reith & Associates Insurance and Financial Services Limited is your resource for handling workplace bullying and minimizing the effects it can have on your business. Contact us today at (519) 631-3862 to learn more.

Nikki Johnson No Comments

Cyber Risks & Liabilities

By:  Dan Reith  BA(Hons) CAIB
President/Principal

3 Ways to Protect Yourself From Credential Stuffing

Credential stuffing attacks occur when a malicious party takes a stolen username and password, and tries them on a variety of different websites. For example, a hacker may have purchased a Google username and password from the dark web. Assuming that you use the same password for multiple accounts, the hacker would test these credentials on other platforms (e.g., banking or social media websites) using botnets (groups of computers tasked with various commands).

Essentially, by using information from one account, criminals can potentially access data from a variety of platforms, draining bank accounts or gathering information they can sell to other malicious parties.

Credential stuffing can affect anyone, from individual users to the biggest companies. Thankfully, because credential stuffing relies on victims having the same password for multiple accounts, there are some simple ways to protect yourself:

  1. Avoid using the same password for multiple accounts—Credential stuffing only works because many people use the same password for multiple accounts. Change your passwords often and use a unique password for each account.
  2. Use two-factor authentication—Complex passwords can deter cyber criminals, they can still be cracked. To prevent access to your accounts, two-factor authentication is key. Through this method, users must confirm their identity by providing extra information (e.g., a phone number or unique security code) when attempting to access corporate or personal applications, networks and servers. This additional login hurdle means that would-be cyber criminals won’t easily unlock an account.
  3. Create strong password policies—For employers, ongoing password management can help prevent attackers from compromising your organization’s password-protected information. Create a password policy that requires employees to change their password on a regular basis, avoid using the same password for multiple accounts and use special characters. Long passphrases are becoming increasingly popular.

Even the most robust and expensive data protection solutions can be compromised should an employee click a malicious link or download fraudulent software. As such, it’s critical for organizations to thoroughly train personnel on common cyber threats and how to respond.

Mobile Device Security

Gone are the days when the most sensitive information on an employee’s phone was the names and phone numbers of their contacts. Now, a smartphone or tablet can be used to gain access to anything, including emails, stored passwords and even proprietary company data. Depending on how your organization uses such devices, unauthorized access to the information on a smartphone or tablet could be just as damaging as a data breach involving a traditional computer system.

In order to protect your organization, there are a number of mobile device security measures to consider:

  • Establish a mobile device policy—Before issuing mobile phones or tablets to your employees, establish a device usage policy. Provide clear rules about what constitutes acceptable use as well as what actions will be taken if employees violate the policy. It is important that employees understand the security risks inherent to mobile device use and how they can mitigate those risks. Well-informed, responsible users are your first line of defence against cyber attacks.
  • Establish a bring your own device (BYOD) policy—If you allow employees to use their personal devices for company business, make sure you have a formal BYOD policy in place. Your BYOD security plan should also include the following practices:
    • Installing remote wiping software on any personal device used to store or access company data.
    • Educating and training employees on how to safeguard company data when they access it from their own devices.
    • Informing employees about the exact protocol they must follow if their device is lost or stolen.
  • Keep the devices updated with the most current software and anti-virus program—Software updates to mobile devices often include patches for various security holes, so it’s best practice to install the updates as soon as they’re available. There are many options to choose from when it comes to anti-virus software for mobile devices, so it comes down to preference. Some are free to use, while others charge a monthly or annual fee and often come with better support.
  • Back up device content regularly—Just like your computer data should be backed up regularly, so should the data on your company’s mobile devices. If a device is lost or stolen, you’ll have peace of mind knowing your valuable data is safe.

Because of their convenience, smartphones and tablet devices have become a universal presence in the modern business world. As usage soars, it becomes increasingly important to take steps to protect your company from mobile threats, both new and old.

Cyber Incidents Cost More Than You Might Think

As technology advances, companies are collecting, storing and transferring more personal information about their customers and employees than ever before. This not only opens organizations up to a cyber attack, but it also means that just one breach can affect thousands or even millions of individuals. Unfortunately, for organizations, cyber incidents cost more than just data:

  • Data breaches are becoming increasingly expensive. While cyber liability insurance can help offset the costs of a data breach and subsequent litigation, just one breach can be financially devastating. According to a survey conducted by the Ponemon Institute, the average cost of a data breach was $5.78 million, or $255 per lost or stolen record.
  • Regulatory costs can be significant. With the advent of Canada’s Digital Privacy Act (DPA), which amends the Personal Information Protection and Electronic Documents Act (PIPEDA), failing to handle a data breach properly can result in major fines. As part of PIPEDA, companies must comply with mandatory data breach notification and reporting requirements. Failing to do so can result in fines of $100,000 per violation.
  • Cyber incidents can lead to serious reputational damage, significantly impacting directors and officers. Reputational damages can easily reach six figures. According to Kaspersky Lab, a global cyber security company, a single cyber incident recently caused brand damage of $8,000 for small and medium-sized businesses and $200,000 for larger organizations. When wide-scale breaches occur, a company’s reputation can be tarnished, sometimes permanently. In addition, the public holds organizations accountable for major losses of personal data, and directors and officers are often the ones who take the blame.

For me assistance in reducing your exposure to cyber crime, contact our office, our development team is the only local insurance provider able to assist with strategies, workplace policies and training program.

Nikki Johnson No Comments

Business Beat: Common Loss Exposures for a Restaurant

Last month’s column looked at issues faced in the retail community. This month, I’m turning to another popular part of the local commercial community — the food and beverage industry.

People who run restaurants are often some of the most passionate business owners, investing time and money to deliver a high-quality experience to their customers. However, the hospitality industry can be unforgiving, and it’s a constant challenge for owners to deliver exceptional food and service while maintaining profitability.

These challenges are magnified when you consider that risks related to property damage, equipment breakdowns or crime and liquor liability must also be addressed.

Property exposures in restaurants are substantial and can come from many sources, including equipment failures, food spoilage, natural disasters, customers, employees and other third parties.

When discussing property exposures, fire and water damage are of particular concern, and restaurants face an elevated level of risk due to things like open flames, the wide use of combustible items (e.g., tables, chairs and linens), complex HVAC systems, sewer backups and appliances connected to water lines (e.g., dishwashers).Restaurants depend on functioning equipment to service their customers effectively. In the face of an equipment breakdown (e.g., refrigeration unit leaks and cooking appliance malfunctions), restaurants can experience business interruptions or even prolonged closures.

What’s more, equipment breakdowns can even lead to major property damage should an appliance leak or start a fire.Crime can be a challenge for restaurant owners, especially because their operations often have a steady amount of cash flowing in and out. To make matters worse, thieves can strike at any time, leaving owners to recoup any lost funds or equipment. In this day and age, thieves (including your employees) do not need direct access to cash to steal from you. Merchandise, supplies and securities are all fair game. What’s more, the location of a restaurant as well as its hours of operation can have a significant impact on its level of crime risk.As a restaurant owner, you are responsible for property that may not be covered by traditional insurance. Inland marine coverage can fill these gaps in commercial property protection.

Without an inland marine policy, property that’s unique or valuable, in transit, in your temporary care, stored at fixed (but movable) locations or used to transfer information represent major exposures. Specifically for restaurateurs, inland marine insurance can provide much needed protection for accounts receivable, computer equipment, data and records, food transported to various locations and food trucks.

Premises liability exposures at restaurants can directly affect patron safety and, when injuries occur at your business, you could be held responsible. Accidents related to slips, trips and falls; burns and scalds; and cuts are common and a major source of concern. Something as simple as a hot plate, a spilled drink or an uneven surface can lead to costly insurance claims following an accident.Food safety is an important consideration for restaurant owners and a primary source of food and product liability. The potential for food poisoning, contamination, spoilage and allergic reactions is ever present. In the event that one of your customers becomes ill due to your food or accidentally ingests a foreign object found in one of your menu items, your restaurant could face legal ramifications and suffer irreversible reputational damage.Lawsuits related to liquor liability are filed each day, and it’s increasingly common for victims and their families to file suits against restaurants for their role in serving a customer who is then involved in an alcohol-related accident.

Making matters worse, all it takes is a single liquor liability claim to put your entire business at risk. Liquor liability exposures for restaurant owners can stem from selling liquor to underage individuals, over-serving patrons and non-compliance with applicable legislation.

Continuity is critical in business, and there are few things more important than continuous revenue and cash flow, particularly for small to medium-sized organizations. In fact, just one brief business interruption can be incredibly costly for an organization, often leading to serious reputational damages or long-term closures. Common interruptions for restaurants can include natural disasters, fires, food recalls, cyber events, staff shortages and supplier issues. Restaurants are a common target for cyber criminals, as these businesses often process a high volume of credit and debit card information. In addition, employees who are improperly trained on computer and data safety could put your organization at risk to ransomware, viruses, phishing scams and malware. Compounding your exposures, many restaurants offer guest Wi-Fi that, if improperly secured, can put you and your guests at risk of an attack. Depending on the services your restaurant offers, employees may be required to operate a vehicle on behalf of your business, creating automobile exposures in the process. While important for daily operations, the improper use of a vehicle can lead to potential accidents and major insurance claims. What’s more, if you allow employees to use their own vehicles for work, standard auto policies are often not enough.

Additionally, providing valet parking can also create unforeseen challenges should a customer’s vehicle get damaged.While the proper risk management practices can reduce certain exposures, no system is 100 per cent effective in ensuring an accident-free workplace. As a result, it’s all the more crucial to work with a qualified insurance broker to not only assess you exposures, but secure the appropriate coverage as well.

Talk to your broker soon. For a second opinion or to learn more, please feel welcome to contact me or any of our staff at Reith & Associates Insurance and Financial Services Limited.

By Dan Reith