Archives: 2016

Asbestos: Naturally occurring in the environment, asbestos is a group of minerals that exists as bundles of fibers, which can be separated into threads. Because of their durability and resistance to heat, fire, and chemicals, asbestos fibers have been widely used in many industries, including construction, shipbuilding, and automotive.

After heavy use in many products, asbestos was discovered to be a health hazard. Consequently, the use of asbestos has been greatly reduced. However, older products, especially older buildings, still contain asbestos. It is still legal to use asbestos in some applications, providing the product contains less than 1% asbestos.

Business insurance: Asbestos can prove costly to business owners whose employees use or regularly encounter it. Be aware of safety regulations, and implement them, using the help of employee education programs. Liability lawsuits are still being filed by individuals exposed to asbestos, and liability insurance is a must-have – not a should-have. Check with your insurance agent to ensure your coverage is appropriate for your level of risk.

Claims: The initial discovery of the harmful effects of asbestos resulted in a surge of claims. By the 1990s, it seemed this wave had passed. Recently, though, it has resurfaced. Business owners should be prepared with proper insurance and review of potential asbestos problems.  Contact your insurance professional with any questions.

Investing in tech companies may be risky, but if you succeed in finding a winner, the payoffs boggle the mind.

And these days, finding a winner doesn’t mean you have to be techy. It just means you’ll have to go back to school.

According to Kiplinger Wealth Creation: “Whether you’re looking for steady dividends from an established giant such as Apple or Microsoft or wanting to place a bet on a fast-growing upstart, opportunities abound.”

However, many angel investors simply aren’t tech-savvy. And that concerns the entrepreneurs.

Bloomberg News quotes tech entrepreneur Daniel Debow, who sold one of several start-ups for $227 million: “I’ve seen it multiple times with people who have good intentions but bad experience.”

Fortunately, where there’s a knowledge gap, there are people prepared to fill it.

As Bloomberg News reports: “Angel training courses have popped up in Silicon Valley to help prepare the dozens of employees who turn into millionaires when a major technology company like Facebook Inc. or Twitter Inc. goes public and want to make investments of their own.”

And while the United States, Europe, and China hold the top three spots for buying high tech, the craze circles the world. In Canada, National Angel Capital Organization (NACO) has developed a modular course to teach investors the ins and outs of investing in tech start-ups.

In fact, nontech investors may offer entrepreneurs something more than their cash.

While they may not be wise in the ways of technology, they may be very wise in the ways of business.

Entrepreneurs, for all their creativity and product knowledge, need to understand how businesses work to maximize their success. Their angels may be able to help with that.

“You don’t want to market to someone as a baby boomer. They don’t want to be in that category,” comments Christine Carlton, cofounder of online retailer TheSeptember.com.

Quoted in a recent article in the Globe & Mail, Carlton neatly summed up the problem retailers are having marketing to boomers – who don’t want to be marketed to as boomers.

Suggests Steve Olenski in Forbes: “They don’t want to be reminded of their age, but of their accomplishments and of their future.”

There are 76.4 million boomers in the United States, and they have money. As a Neilsen report indicates, they account for 70% of Americans’ disposable income, and the younger boomers stand to inherit a combined $13 trillion in the next 20 years.

While many retailers are targeting special products, such as antiaging creams, at boomers, their marketing is subtle, with older but beautiful (and often airbrushed) models and celebrities as spokespeople.

Also targeted to the 50-to-70 age group are home-related products, including furniture and decor items and raw materials for boomer DIYers.

Why? Many are getting ready to sell or have sold their old homes and are beautifying their new nest. As Olenski notes in Forbes: “70% of baby boomers think their current house is not the best they can get. They want to be out on their own, in a more luxurious place.”

Finally, boomers are Internet and social-media savvy; as marketer John Manrique points out in the Forbes article: “They do their homework online. Baby Boomers know their stuff…so you’d better too.”

ACORD certificate. The Association for Cooperative Operations Research and Development (ACORD) is the insurance industry’s standards’ developer. An ACORD certificate is simply a standardized certificate of insurance. If clients or customers ask for your ACORD certificate, they’re seeking to verify you’re insured.

Aggregate limit. This is the maximum amount an insurance company will pay for claims. It’s often set up as an annual limit, meaning this is the maximum total the insurer will pay during one year of coverage for all claims made during that time period.

Business owner insurance. This covers the equipment you use to run your business. It may also include coverage for any business interruption and lost revenue that occurred while equipment was missing or damaged.

Certificate of insurance. This is simply proof you have insurance for your business. It details the types, limits, and deductibles of the policy, as well as the name of your business, the insurer, and policy dates.

Deductible. When you file a claim with your insurance company, the amount you pay before coverage kicks in is your deductible. (A $500 deductible requires you to pay the first $500 of damages.) You can obtain lower premiums by setting a higher deductible.

Endorsement. Also called a rider, this is added to your insurance policy to customize its terms and conditions. It may extend coverage or modify it to meet the unique needs of your business.

Fiduciary. You are a fiduciary if another person has placed trust in you to manage and protect property or money. Business owners make decisions about employee benefits. Because of this responsibility, it is wise to have fiduciary liability insurance. This covers any legal liability from claims relating to pensions, 401(k)s, or other benefit plans.

General liability insurance. A must for business owners, this is basic coverage to protect you from liability in cases of bodily injury and/or property damage to third parties.

Primary policy. Your primary policy is the first response to a claim. If you have secondary policies, they would be accessed once your primary policy limits are reached.

Professional liability insurance. Also called errors and omissions (E&O) insurance, this protects you in case of mistakes in the services you provide. This coverage should be tailored to your business.

Umbrella. Similar to the ones used on rainy days, umbrella insurance protects you from a downpour of claims. It extends your liability insurance to cover major claims and lawsuits.

Waiver of subrogation. A client may ask you to waive subrogation rights. Agreeing to this means that if you and that client are sued and your insurer pays, your insurance company cannot go after your client to recover its loss.

Under the U.S. tax code, unreimbursed property losses can be included in itemized deductions. So if a storm or vandal destroyed your truck or fire damaged your store, you may qualify for a deduction. If the loss is not completely covered by your insurance, it may be possible to deduct some of it on your federal income tax return.

Of course, various stipulations apply. Seek assistance for proper claims and deductions from your tax preparer. Generally, losses must be substantial to qualify. If an unreimbursed loss exceeds 10 percent of your gross income, it can usually be deducted. Different rules apply depending on whether the property is for business or personal use, so check with a professional to ensure that your filing adheres to proper regulations.

The year the deductions apply to may also vary. If your region has been declared a federal disaster area, you can file the deduction for the year in which the disaster occurred or the preceding year.

Whatever the situation, it’s essential to prepare documentation to support your deduction. You should collect all receipts, police reports, insurance claims, statements, and any other records involved. Keep these in an organized file for reference. This is a good practice to develop, even if you don’t think you qualify for a deduction. You never know.

It seems many a savvy entrepreneur will look to other industries for ideas and solutions in 2016. It’s time to “step outside your world.”

Or so says Paul Charron, former board chair of Campbell Soup Company, in an address to real estate agents. As he suggests, most of us suffer from tunnel vision, believing that our issues are unique to our industry. In fact, barriers and opportunities are often very similar in very different business sectors. Leaders need to look at those companies outside their industries who have faced similar challenges-and found a solution.

For example, says Charron, everyone is concerned about getting closer to the consumer. But successful companies may have already found the way. Look at how they do it and envision how similar initiatives could bring you closer to your own customers.

When there’s no mechanism in place to look outside for ideas, solutions, and inspiration, it may be time to institutionalize it. As quoted in an RISMedia article, Charron suggests the creation of an advisory board of smart people from other industries: “When you institutionalize external stimulation it guarantees that you’ll get that great idea from outside your world.”

Herminia Ibarra, professor of leadership and learning at global business school INSEAD, agrees. Quoted in a Forbes article, Ibarra suggests that executives should use “outsight”-getting out of their daily routines and into situations that will give them fresh perspective.

The result could be a surprising interaction between advisors and advisees: you learn from them; they learn from you.

Despite market volatility, 2015 was a good year for many investors.

As a result, you may find that the start of a new year is a good time to get together with your financial advisor to review your investments and make any necessary changes.

Here are five questions to ask your advisor to help you start 2016 off right:

1. How can I make capital gains long term? The tax rate on long-term capital gains is lower than the tax rate on short-term capital gains, so your advisor may suggest you wait until you’ve held certain appreciated investments for a year before selling them.
2. Should I own more stocks? Stocks have more appreciation potential than bonds, but there are a variety of risks associated with investing in them; your advisor, who knows your situation, can help you decide if you can tolerate these risks before making an investment decision.
3. Should I contribute more to tax-deferred accounts? If you’re not yet retired, tax-deferred savings accounts are a great way to keep your assets growing tax free, potentially compounding their value year after year. Ask your advisor how best to participate; for example, by increasing your contributions to a company-sponsored retirement plan, a SEP IRA, a traditional IRA, or a Roth IRA.
4. Would giving the gift of stock or mutual fund shares benefit me?If your portfolio has appreciated and you don’t need the money, your advisor can explain some options. For example, you may want to consider gifting appreciated assets to charitable organizations, your children, or your grandchildren.
5. Am I subject to the alternative minimum tax (AMT)? The AMT applies to all people who take relatively large deductions, including deductions for state and local taxes. Ask your advisor if you are subject to it, and if so, he or she can help you plan ahead during the year to minimize your exposure.

The 100,000 volts of electricity that a lightning bolt can deliver is easily capable of destroying the costly electrical equipment you rely on for your operations. It doesn’t even have to strike your building. Lightning can travel up to three miles (4.8 km) through the ground and affect your systems. Resulting power surges can send up to 1,000 volts into lines designed to handle only 120 volts. The consequences are overloaded circuitry, lost data, and destroyed equipment. Power strips and electrical panels may even catch fire and spread further damage.

The end results of a lightning strike are lost income and costly expenses for your business. So how can you protect your business from lightning?

Insurance – Get the proper coverage for your business needs. Check with your insurance agent about the policy options available and which will be best for your business. Here are some suggestions:

• Business insurance – Standard business insurance policies cover damage caused by lightning. Some policies also provide coverage for power surges caused by lightning.
• Power surge insurance – That said, additional coverage is typically required for damage caused by power surges not related to lightning-a good investment.
• Equipment breakdown insurance – Specialized insurance policies, such as equipment breakdown insurance, can add protection to cover the cost of replacing expensive electronics.
• Insurance limits – Check with your insurance agent to find out what policies and coverage limits your business needs in order to thoroughly protect your investments. Specialized and costly equipment may need additional rider coverage to properly insure it against lightning damage.

Precautions – In addition to insurance, business owners can take some fairly simple precautions to protect their assets against lightning damage. While some cost is involved, it is minimal compared to the damage lightning can cause.

• Lightning protection system – This includes a lightning rod or air terminals at the top of the building and wires that carry the current to grounding rods at the bottom of the building. When lightning strikes a building with a protection system in place, the strike is directed into the ground, protecting the building and its contents from damage. To ensure proper installation, hire a licensed electrician to install a lightning protection system for your business.
• Surge protectors – Power strips do little to protect your equipment from power surges. For proper protection, business owners should use UL-listed surge arrestors. These are installed on electrical panels and incoming data and phone lines. Arresters prevent electrical fires and damaging electrical discharges. They can also be installed on specific pieces of equipment.
• Power removal – If a storm is approaching, unplug equipment. A few minutes of down time may be well worth it if it saves all your equipment from ruin.

• Over 1.7 million burglaries occurred in the U.S. in 2014.
• Burglar-proofing can prevent nine out of 10 break-ins.
• Insurance discounts of between 2 and 15 percent are typically available to homeowners who install security systems.

With these facts in mind, it’s small wonder many homeowners install systems to beef up their home security. It seems like a no-brainer, but there are several things you need to consider before signing on the dotted line for your new system.

Shady salesmen – Unfortunately, not all security system salespeople are trustworthy. Many homeowners have found themselves the victims of unethical business practices when it comes to their home security systems. Sales representatives have installed faulty systems, offered contracts based on false promises, misrepresented fees, failed to cancel contracts, and renewed contracts without consent. These and similar practices should make homeowners cautious when purchasing new systems.

Agent recommendations – Because of the risk homeowners face when dealing with security sales reps, it is wise to seek the counsel of your insurance agent. He or she may be able to recommend a specific company known for solid business practices, or at least steer you in the right direction. Your agent can also give you tips on avoiding shady online-based or door-to-door sales reps.

Discounts – Not every system qualifies you for a homeowners insurance discount. Check with your insurance agent before you purchase anything. Your agent can advise you about the types of systems that are eligible and explain the discount, so you can make an informed decision about what to install and if it will be worth the cost.

Other security measures – Your best deterrents to thieves are light and noise. Dead bolt locks, bars, window grates, and security lighting are additional options that offer defense and potential savings. Contact your insurance agent for information regarding your specific policy to discover the best options for your home.

The year has just begun, and your 2016 calendar is already booked. Each weekend is packed. Every day is filled. It’s another year of rush, rush and do, do.

Daily, we hit the ground running. We travel at breakneck speed through a dizzying list of appointments and commuting. We’re always checking our devices; sometimes without even taking in what we read.

This can’t be healthy. Why are we in such a hurry? Let’s…slow…down.

Just as we recognize the frenzied lifestyle we’ve created for ourselves, we also recognize the need for a few slowdowns. These may be drastic changes or simple daily pleasures. If you’re looking for a few ways to slow down, try the following, courtesy of www.Houzz.com:

• Adjust your commute. Ride your bike, work from home, take the train and read, listen to an audiobook in your car. Make a change that reduces commuting stress. Perhaps even consider changing jobs to be closer to home.
• Allow children unstructured time. Don’t schedule activity every moment of the week. Have available art supplies, building blocks, and the great outdoors; let kids find their own things to do.
• Take time for a hobby. One evening a week, remove all your screens. Instead of watching sitcoms or checking social media, spend time on something you are passionate about.
• Get bored. Now and then, be okay with a few moments when nothing happens. Simply sit. Take in your surroundings. Watch the clouds. Watch people. Resist the urge to constantly DO and just BE.

More baby boomers are reaching retirement age and, as one might expect, they’re not content to settle for their parents’ retirement; boomers are instead looking for retirement communities that will cater to their active lifestyles and foster their sense of community.

Developers are noticing this shift and tweaking their communities to better suit the needs of boomers, who now number some 75 million individuals-currently representing one-quarter of the U.S. population and exceeded only by millennials.

Retiring boomers are specifically looking for communities near city centers, in part because many are still choosing to work in some capacity after retiring-not for them the bucolic retirement communities miles from town that were so admired by their parents’ generation.

Personal fitness has emerged as another top priority for today’s seniors, with more of them opting for indoor group fitness classes and hiking rather than more leisurely activities like golf-their parents’ game.

Group fitness classes might be popular because the need for community is important to this demographic, especially for those who live alone. In fact, some baby boomers are creating their own retirement communities with an emphasis on mutual sharing and caring. Resident-created retirement solutions can take on many forms-from shared homes to co-housing communities, where people settle in one neighborhood and agree to care and watch out for each other.

Finding the home and community of your dreams isn’t easy, and for some it may take a lifetime. But with these new possibilities, baby boomers will have choices that fit their specific needs and lifestyles.

The house – Don’t wait until after the addition is complete to change your homeowners policy. You’ll want that space insured from damage even before the final touches are added. Before the project starts, contact your insurance agent and increase the value of your home to reflect the impending changes.

The stuff – If you add new furniture or equipment, be sure your personal possessions coverage is still sufficient. Also remember to add these items to your home inventory list.

The contractor – Ask your general contractor to show you a copy of the company’s workers’ compensation insurance. It’s essential that this coverage is in place and sufficient to protect you from having to pay for workers’ injuries yourself.

The subcontractor – Often the contractor will subcontract part of the work, such as electrical or plumbing. Verify whether or not the contractors’ workers’ compensation policy will cover these subcontractors, or whether the subs have insurance of their own.

If anyone completing work on your project is not sufficiently insured, you may be able to extend your own homeowners policy to provide coverage. Check with your agent for the best options, or search for another contractor with insurance that offers the protection you feel is necessary. Better safe than sorry.