All posts tagged business

Have Plans in Place as Mega-quake Threat Level Is Raised


The risk for a massive earthquake of magnitude 8.0 or greater has increased, according to the U.S. Geological Survey.

The risk of that kind of mega-quake occurring in the next three decades is now 7%, according to the survey, which just last year released a report that increased the threat level from 4.7%.

It has raised the threat level again due to a better understanding that quakes are not limited to separate faults and that one can start on one fault and jump to others, resulting in a multiple faults snapping at once in a giant mega-quake.

The report says that past models generally assumed that earthquakes were confined to separate faults, or that long faults like the San Andreas ruptured in separate segments.

This newly discovered phenomenon has significantly increased the likelihood of a massive quake. Quakes dating back in the last 30 years reflect the new discovery.

  • 1987 The Whittier Narrows earthquake

Magnitude 5.9

Fallout: Three days later a 5.6 magnitude aftershock hit on a different fault. Damage reported in Whittier, Pico Rivera, Los Angeles and Alhambra.

  • 2010 California-Mexico border quake

Magnitude 7.2

Fallout: Scientists said the border quake directed tectonic stress toward and its aftershocks triggered movement on at least six faults, including the Elsinore and San Jacinto faults, which run close to heavily populated areas in eastern Los Angeles County and the Inland Empire.

  • 2011 Tohoku Japan earthquake

Magnitude 9.0

Fallout: The initial quake spread through multiple faults, resulting in two tectonic plates sliding against each other and moving the sea floor an astounding 165 feet westward, creating a massive tsunami that killed 15,000 people.


Another study released by a California State University at Northridge professional of geophysics, Julian Lozos, predicts the high likelihood that a major quake could start on the San Jacinto fault and continue on the San Andreas fault, California’s longest and most dangerous fault line.


Earthquakes and your business

Business owners must consider the potential impact of earthquakes and related hazards on buildings, employees and operations.

Planning for how you will respond during and after an earthquake, and taking steps now to reduce potential damage, is crucial to a successful and speedy recovery.

Here are some tips:

  • Develop a business continuity plan.
  • Conduct an audit of general earthquake vulnerability and a hazards risk assessment.
  • Establish an operations contingency plan.
  • Conduct a non-structural assessment of your business, including inventory.
  • Hold regular drop, cover and hold on drills for employee safety.
  • Encourage employees to have family plans and emergency kits.
  • Seismically retrofit buildings or occupy/rent buildings that are built to earthquake code.
  • When looking for a new site for your business, consider risks of liquefaction and proximity to faults, transportation, power and water.



If your business is operating in an area that is at risk of a quake, you should seriously consider earthquake insurance. Currently, premiums for coverage are the lowest they’ve been in years, while the risk of earthquakes has increased.

Earthquake coverage is purchased as an endorsement to the standard business owner’s policy. The endorsement covers damage caused by shaking during an earthquake, including structural damage and the damage to property.

Depending on the policy, lost business income caused by an earthquake may also be covered.

Coverage only begins when damage has exceeded your policy’s deductible – the amount you pay out of pocket before your insurance kicks in.

Earthquake insurance policies often have high deductibles – ranging from 2% to as high as 20% of the value of your building, depending on its location, age and condition.





Top 10 Laws and Regulations Affecting Business in 2016 (Part 1)

Top 10 gold

AS WITH every New Year, businesses are faced with a slew of new laws and regulations. We’ve condensed them into a list of the top 10 most likely to affect your operations.


  1. New teeth to gender equal pay laws

A new state law adds teeth to the laws on gender pay equality.

Before SB 358, employees seeking to prove pay discrimination had to demonstrate that they are not paid at the same rate as someone of the opposite sex at the same establishment for “equal work.”

Under the new law, the requirement of “same establishment” has been deleted, and the employee need only show he or she is not being paid at the same rate for “substantially similar work.”

Substantially similar work means a composite of skill, effort and responsibility, performed under similar working conditions.

Employment law attorneys say the employer has the burden to affirmatively demonstrate the pay difference being complained about is based on any or all of these specific factors:

  • A seniority system,
  • A merit system,
  • A system that measures earnings by quality or quantity of production, or
  • Another factor, such as education, training or experience.


  1. Minimum wage increase

On Jan. 1, the state minimum wage increased to $10 an hour, the last of two incremental increases since legislation was passed in 2013. The first came on July 1, 2014, which moved the rate up to $9 an hour, where it has been until now.


  1. Employer mandate part II

At the end of 2015, the Affordable Care Act reprieve for business with 50 to 99 full-time or full-time equivalent employees ends.

Employers of this size are required to provide health insurance to at least 95% of their full-time employees and dependents up to age 26 starting this year.

For employers who don’t provide coverage, the fee is $2,000 per full-time employee (minus the first 30 full-time employees).

Companies with 100 or more full-time employees were required to cover their workers, starting in 2015.


  1. Health coverage reporting

Starting in 2016, employers with 50 or more full-time or full-time equivalent employees are required to make additional filings with the IRS, as well as supply their staff with forms.

Applicable large employers (with 50 or more full-time and full-time equivalent employees in the preceding calendar year) will use Form 1094-C and Form 1095-C to satisfy reporting requirements.

If filed on paper, these forms must be put in the mail no later than Feb. 28. If filing is done electronically, the due date is March 31.

You must provide 1095-C to your employees before the end of January, along with their W-2 forms


  1. Leeway to avoid frivolous lawsuits

AB 1506 gives employers 33 days to fix technical violations on an itemized wage statement before an employee can pursue civil litigation under the Private Attorneys General Act.

The California Chamber of Commerce championed the bill, which took effect on Oct. 2, 2015, saying it will greatly reduce frivolous litigation over an issue for which “injury” is hard to prove.


You can find out about the next five laws in our Thursday blog entry.

Business Umbrella, Excess Liability Insurance Essential as Costs Rise

As a responsible business owner you no doubt make sure that you are properly insured for any liabilities resulting from damage to other parties.

Imagine some of the following scenarios:

  • What if a visitor trips and falls at your business, breaking a leg and is unable to work for a few months while they recover?
  • What if a customer suspected of stealing later proves their innocence and sues for defamation of character?
  • What if one of your employees, driving a company truck, rams into a passenger car and severely injures some of the occupants?


The costs of a large financial settlement could surpass the primary liability limits of your existing insurance policies, leaving your business responsible for the rest of those costs. And a high-cost accident or lawsuit could potentially put your company out of business.

To avoid any of these scenarios, it’s wise to carry a commercial umbrella policy, which will essentially pick up where your primary insurance leaves off – or runs out.

All of your policies have limits. Once those limits have been breached, the other party can sue and go after your firm’s assets. Breaching those limits is getting easier due to the increasing prices of vehicles as well as health care costs, should the other party suffer physical injuries.

An umbrella policy will also cover you for liability for which there is no primary insurance, or when a primary policy includes an exclusion that the umbrella policy doesn’t.

An umbrella policy will kick after limits are breached for:

  • Commercial general liability (bodily injury, property damage, personal injury, defense costs and attorney fees, limited contractual liability)
  • Business owners liability
  • Business auto liability
  • Employers liability


Most umbrella insurers require you to purchase primary insurance coverage before selling you an umbrella policy. For example, general liability insurance, auto liability insurance, workers’ compensation or employers liability insurance.

Umbrella policy limits may range from $1 million to $10 million, depending on the policy and the insurance company underwriting the policy.



Excess liability

For companies that have potentially higher liabilities, an excess liability policy can be secured that kicks in after the umbrella policy is breached.

This coverage provides extra liability limits over an umbrella policy, and typically follows the terms of the first underlying insurance policy.

Higher limits may be necessary for businesses with high loss potential, high profile, sizable sales, numerous assets, large auto fleets, worldwide presence, and/or significant public exposure.


Protecting Your Business from Wildfire

As wildfires rage in California and elsewhere in tinder-dry areas of the US, now more than ever you need to make sure that your business is protected from the threat.

Whether you own or operate an apartment complex, convenience store, office, motel, restaurant or other retail establishment, the steps you take now will reduce the risk of costly repairs or rebuilding if a wildfire strikes.

If you are located in one of the many tinder-dry areas this year, you need to consider the possibilities that fires can start near your business – and, if so, are you prepared to deal with a fire and keep your business operating? In this article we look at how you can protect your structure in case of wildfire.


Surroundings most important

The goal of an effective wildfire protection plan is to keep the fire from coming dangerously close to any structure on the property. Wind-driven embers from a fire, not the flames, are the biggest threat to properties during a wildfire. Once these embers land on a combustible material, the potential for the wildfire to spread is significantly greater.

Inspect the premises around your building to see if there is anything around or attached to a structure that can be a potential wick that could allow the fire to come dangerously close to your premises.

This might include a storage shed, newspapers or product display rack, playground equipment or containers used to store cleaning products.

Storage buildings, trash bins, equipment and other combustible items can allow fire to reach the building. When possible, relocate these at least 30 feet from the business and other structures on the property.

Relocate propane (LP) tanks at least 30 feet away from the building and other structures on the property. If relocation is not an option, create a 10-foot zone around a tank using low-combustible materials such as rock, gravel mulch or irrigated lawn. An alternative solution is to enclose the tank using noncombustible materials.

Also, make sure that you are taking care of areas around your building in three different zones:


Zone 1 (0-5 feet): This zone requires the most careful selection of vegetation and other materials. The objective is to reduce the chance that ignited vegetation or other combustible materials will be able to reach the building. Rock or gravel mulch and low-growing plants or lawns are good choices for this zone.

Avoid plants in this area that:

  • Generate ground litter from bark, leaves, or seeds that slough off.
  • Have (very low moisture content) dead material within the plant.
  • Have small branches and needles that can easily ignite.
  • Have a high resin or volatile content


Zone 2 (5-30 feet, or to the property line):

Consider having a vegetation island in this area, as it makes it difficult for fire to reach the building by burning through a continuous path of vegetation. Lower branches in trees should be pruned and nearby shrubs removed.

Doing this can slow down and reduce the energy of a wildfire, and reduce the risk that vegetation will ignite and generate embers that could be blown onto roofs or into vents.


Zone 3 (30-100 feet, or to the property line): While further away from the structure, this zone should still be kept tidy to prevent the spread of a wildfire. Thin out small vegetation between trees. Tree canopies should not touch, in order to prevent the fire traveling from tree to tree.


Exterior structure

Choose noncombustible building materials when rebuilding or renovating, and particularly if you are choosing new siding for your structure. You should also consider these most important flashpoints and conduits for fires:

  • Roofing – Choose a Class A fire-rated roof covering, and keep the roof and gutters clear of debris. Businesses that share a roof are particularly vulnerable if the entire building is not well maintained.
  • Vents – Attic and crawl space vents are vulnerable entry points for wind-driven embers. Cover with 1/8-inch metal mesh screens.
  • Attachments – Awnings, decks, patios and porches also can act as a wick, bringing flames to the building. Even if you have noncombustible siding like stucco, a burning deck or other ignited combustible items close to the wall will provide a direct flame exposure to the doors, windows or sliding glass doors.
  • Windows – Radiant heat from a wildfire can break single-pane windows. You should install dual-pane windows with tempered glass for increased protection.
    Also, open windows can be entry points for embers. Educate tenants and employees about the importance of closing all windows before evacuating if fires draw near.


Other considerations

  • Have plenty of fire extinguishers on location, and get them inspected regularly.
  • Back up important documents that could be destroyed.
  • Have an evacuation plan in place to safely exit the building in case of a wildfire.
  • Practice your evacuation plan, so each employee will know how to exit the building calmly and safely.
  • Follow local smoke detector and sprinkler system ordinances.
  • Have flashlights and extra batteries available in case your business loses electricity.



Your property insurance will generally cover damage from fires, but damage can also affect the operations of your business. Hence, it’s important that you also consider business interruption coverage, which will pay for any lost revenues that you may incur as a result of an interruption.


burning store

Clinton E-mail Scandal a Wake-up Call for Businesses

There are lessons for businesses in the scandal regarding former U.S. Secretary of State Hillary Clinton using her personal e-mail account to conduct government business.

And while the jury is still out on just how damaging this was (notwithstanding any legal issues) in Clinton’s case, there are clear and present dangers to any firm that allows its staff to use their own e-mail accounts to conduct the company’s business.

There are three reasons you should set a usage policy that bars your staff from using their personal e-mail for work:

  • The danger of your employee’s e-mail being infected by a virus, malware or similar attack that spreads into your own computer systems.
  • Hampering your records retention.
  • It makes it difficult to comply with electronic discovery if you are embroiled in a legal matter.


A portal to infection

Everyone likes to be able to access their personal e-mail account at work through web-based e-mail accounts such as Gmail or Hotmail.

When employees access their e-mail through websites, this can create a dangerous “back door” through your company’s security firewall so that viruses, trojans, worms and hackers can potentially exploit your network.

If you don’t already have an Internet usage policy in place, develop one now. And if you do have a policy that doesn’t forbid the use of webmail and web-based accounts, talk to your IT support staff about how to best implement such a policy.


Records retention

The Federal Records Act requires government officials to preserve e-mails on department servers rather than sift through personal correspondence to decide what to archive and what to trash.

While the act does not apply to the private sector, your company could still need your e-mail records at some point in the future. In this case, it’s obviously better to have all of those messages on a company account rather than having to sift through all of the conversations in your personal e-mail to locate the exchanges.

Worse than that, if you’ve deleted e-mails, it may appear as if you are conducting the electronic version of shredding documents.

You need to make sure that your important documents are properly preserved and archived so that they can be found quickly later when needed. You need to make sure that e-mails containing sensitive business information are secured and can be accessed only by those who have the authority to view them. Using a private e-mail account circumvents this entirely and is not in the best interest of your organization.

Also, if you’ve invested in developing your company’s records retention policy, your e-mail system and database, those efforts could be wasted if employees circumvent the system by using personal e-mail accounts and devices to create and store work-related information.


Electronic discovery

Storing work-related e-mails in a personal e-mail account can result in a significant and costly burden to your company in case of electronic discovery.

During litigation it’s common practice for attorneys to file discovery motions in order to produce relevant documentation. These days that includes searching through your computer systems and e-mails.

But if one of your employees or managers stored any potentially salient information in their personal e-mail accounts, your business could be required to search their personal e-mails, as well.

This can result in a challenge, since potentially important company information has been comingled with the employee’s personal information. Not only that, but the time involved and concerns about outsiders rifling through a personal e-mail account is not palatable for anybody.

Finally, the costs of performing e-discovery increase with each new data source. This can result in additional expenses and more time.


Violation of best practices

The Wall Street Journal noted in an article titled “Hillary Clinton’s Email-Risk Lessons for CEOs” that executives who employ the same practices as Clinton would do so at risk of legal and security best practices.

“If a [chief executive] of a corporation subject to Sarbanes-Oxley had conducted business affairs this way it would have most certainly been a violation of that legislation,” Bill Solms, CEO of Wave Systems, a data security firm, told the Wall Street Journal.

And Kevin Bocek, vice president of security strategy & threat intelligence at Venafi Inc., told the newspaper: “Control over executive communications, intellectual property, and financial data have been the hallmarks of corporate governance regulations passed over the last decade. Using a home e-mail server takes data outside of the corporations’ control and possibly exposes that data to compromise by hackers.”

email danger

Quake Preparedness: Avoiding Injuries from Falling Items, Debris

While earthquake safety training should be a part of any California employer’s safety program, it’s important from a workplace safety perspective to understand how your employees could be injured during a temblor.

While ducking and taking cover are good skills for your employees to reduce the likelihood of injury, one area that many employers overlook is the dangers of the workplace itself to employees during a quake.

Most earthquake-related injuries result from collapsing walls, flying glass and falling objects as a result of the ground shaking, or people trying to move more than a few feet during the shaking. Much of the damage in earthquakes is predictable and preventable.

Cal/OSHA many years ago actually contemplated creating new regulations that would have required employers to evaluate the hazard of objects falling or toppling during an earthquake, secure racks and protect workers with physical barriers.

In the end though, it opted against engaging in new rulemaking after concluding that existing regulations were enough, since they and the Injury and Illness Prevention Standard require employers to evaluate and mitigate workplace hazards.

Since those broad regulations could theoretically be construed as requiring certain earthquake preparedness procedures if you are located in a quake-prone area, you may want to consider these tips that were created by the Federal Emergency Management Agency and Cal/OSHA:

  • Check with your local building-regulatory agency to determine the seismic design provisions for your building, and whether it needs retrofitting.
  • Evaluate your workplace for non-structural weaknesses, which FEMA says can be more dangerous and costly than structural vulnerabilities. “Any non-structural items that are not effectively anchored, braced, reinforced, or otherwise secured could become safety hazards or property losses in an earthquake,” the federal agency warns.


Hazardous items can include items located six feet or more above the floor. Cal/OSHA recommends:

  • Locating employee work stations and exits away from such areas.
  • Anchoring, bracing, containing or restraining objects by using brackets, clips, latches, bolts, screws, tie-downs, braces and hook-and-loop material.
  • Using physical barriers, such as fencing, netting or barricades.
  • Restraining objects by methods designed by a California-licensed structural engineer.


Cal/OSHA requires employers to report all serious workplace injuries, including those that are the result of an earthquake.

And the main regulations governing workplace safety as it pertains to the risk of falling objects or debris during an earthquake are in Section 3241 of the California Code, which requires employers to store material in a manner that prevents it from tipping, falling, collapsing, rolling or spreading.

It also requires employers to secure merchandise on shelves higher than 12 feet in “working warehouses.”