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Posts Tagged ‘business protection’

by Jill Johnson, Vice President, The Corundum Group

As 2012 rolls on, we continue to watch the economy with rapt attention. This election and the handling of the pending “fiscal cliff” will both be very telling as to where markets and the global economy will head in coming years.

Congress is operating in an almost continual state of gridlock, and one of the most severe impacts of the stalemate will be felt when and if a series of planned tax increases and spending cuts go into effect the first day of 2013.

Few would argue that the shock of going off this fiscal cliff, as it is being called, would be easy for our economy to absorb.  Among the changes are the expiration of the Bush-era tax cuts, the Obama payroll-tax holiday, emergency unemployment benefits, and the reversion of exemption levels for gift and estate taxes.  The New Year will also see the introduction of new taxes to support the recently passed healthcare law.  When you look at all these factors you can’t help but hope for teamwork in Washington. Election outcomes will impact this whole scene as well as the following chart shows.

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The uncertainty around the fiscal cliff causes us to remain wary and has likely contributed to the sluggish pace of recovery we experienced during the second quarter.  According to a survey of small business leaders conducted by the US Chamber of Commerce, 90% are concerned about the impact the fiscal cliff will have on their business growth. Nearly three-fourths of the respondents believe the recent healthcare law makes it harder to hire more employees. Global factors are also contributing to a fear of the unknown, fueled by economic challenges that continue to impair most of Europe and a slowdown in China.

Chart Source: RBC Global Asset Management, CBO, GS, RenMac, BoAML, DB, Eurasia Group, ISI. Note: Figures and scenarios are rough estimates. * Bush tax cuts for households with <$250K in income, Alternative Minimum Tax patch, tax extenders package. ** Original targeted debt ceiling cuts, old stimulus expiration, overseas military draw-down.

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Contributed by Steve Schneider, President, CB Insurance

ImageThe hail storm has passed…now what? It is difficult to determine from the ground whether roof damage has occurred. Most times, a professional roofing contractor is required to make that determination. The roofer will look for “bruising” of the asphalt shingle, granule loss or damage to the edges of the shingle, and actual penetration or holes. For tile and wood shake roofs, the contractor will look for splitting or cracks, and can often repair the individual shingles, rather than a full roof replacement. You may find shingles lying around your property, which is a good indicator that a more in-depth inspection is needed.

Damage to automobiles is easier to spot and—in many cases—easy to fix. Should you have damage to your car, contact your insurance agent to discuss the next steps. This will usually entail taking the vehicle to two or three reputable auto body repair facilities for estimates. Be patient, as your insurance carrier will be swamped with storm-related calls and may take up to 48 hours to contact you. Your agent should be there to assist you if your insurance carrier becomes unresponsive.

Finally, large hail storms will attract “storm chaser” roofing contractors. Be very careful here because most are not experienced roofers and will be very difficult to track down should their workmanship be poor. Most are uninsured, creating additional liability exposures for you as a homeowner. Always work with your agent and insurance carrier to find reputable roofing contractors.

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Contributed by Steve Schneider, President, CB Insurance

ImageEntrepreneurs invest their personal capital to start and build businesses. They write personal checks to make payroll, to fund equipment expenditures, and pay operating costs. They put their own money at risk in hopes of an acceptable return on their capital. Historically, investment risk taken by the successful entrepreneur has been rewarded by increased profits and a long-standing business venture. Those who opened businesses were lauded for their propensity and willingness to incur risk and for their commitment to community and growth.  

Not so much today. In this political season, entrepreneurs are painted as greedy or labeled as Wall Street “fat cats” In reality, most entrepreneurs across the USA are Main Streeters, like you and me. They sit across from friends and neighbors in local churches and restaurants. They get up each morning to work another day–to make a product or provide a service, train or manage staff, attempt to smartly grow a business, and to participate in and enrich a community. Each day across our country, entrepreneurs incur risk and employ others with no guaranty; only the hope of their own success.

On January 1, 2013, the financial success these entrepreneurs seek–the economic reward they pursue by putting personal capital at risk—will be severely diminished. Ordinary income tax rates for many small business owners in the highest tax bracket will increase by over 10%. A new 3.8% Medicare Tax (Obamacare) will be applied to certain investment income, such as dividends and interest income. Capital gains on investments will be taxed at a rate 30% higher than in 2012. Income derived from stock dividends will be taxed as ordinary income, rather than the current 15% tax rate – a whopping +400% increase for those in the highest tax bracket.  All this after the company itself has paid up to 35% of its income in corporate taxes. 

So what’s the big deal? Those doing well should “pay their fair share,” right? We can always debate whether tax rates of 40% income, 35% corporate, 23.8% capital gains, 40% dividend income, and 55% estate (death) are “fair.” The question today is: “Would you write a personal check to start a business, knowing that almost half of what you earn over time will go to the federal government in the form of taxes?”  Or stated another way, “Would you invest your own money to grow a business and employ more people and take more risk, knowing that upon the sale of your business the increased value derived from your investment and sweat equity will be substantially taxed, and, to add further insult, that upon your death more than half of the remaining value might also go to Washington, rather than to your heirs?” 

If you are curious why the unemployment rate remains stubbornly high, why GDP growth is anemic, and why many of our best and brightest college graduates remain unemployed, you need only put yourself in the position of an entrepreneur and ask – “Would I write that check?”

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Contributed by Todd Morris, Vice President Commercial Division, CB Insurance

Whether you are a government contractor or small business owner, cyber security is becoming an increasingly complex topic—affecting not only the integrity of information technology systems, but the security of the information contained within. As we all know, when an organization—government or small business—experiences a security breach, there are long-term and possibly even permanent consequences.

As such, it’s wise for all businesses to take note of the recent amendments made to the General Services Administration Acquisition Regulation (GSAR).  These amendments will affect contracts awarded after January 6, 2012 that provide the GSA with technology supplies, services, and systems with security requirements. The amended acquisition rules are meant to strengthen the security of services procured via prime- and sub-government contractors.

Contractors are now required to produce IT security plans within 30 days of the contract award, and they are required to submit written proof of IT security authorization within six months after the award—along with verification that their IT security plan remains valid annually.

According to the GSA, the requirements for submission of an IT plan will be in solicitations that, again, include information technology supplies, services, or systems in which the contractor will have physical or electronic access to government information that directly supports the mission of the GSA.

While these amendments to the GSAR place a new responsibility on government contractors to provide IT security plans, it is a necessary and appropriately cautious step in the right direction to securing sensitive information.

 Contact Todd Morris at 719.477.4275 for information on an upcoming cyber security seminar to be held at Bancorp Plaza at 8:30 a.m. on Tuesday, February 7, 2012.

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Contributed by Todd Morris, VP Commercial Lines, CB Insurnace

In today’s economy it has become commonplace for companies to use independent contractors.  However, there is new legislation outlining the requirements to qualify as an independent.  It is critical that business owners correctly determine whether individuals providing services are employees or independent contractors and then have the correct documentation in place.

Colorado wage law defines an employee as any person, including a migratory laborer, performing labor or services for the benefit of an employer in which the employer may command when, where and how much labor or services shall be performed.  An individual primarily free from control and direction in the performance of contracted labor or services and who is customarily engaged in an independent trade, occupation, profession or business related to the service is not an employee.

Our current administration has begun to crack down on misclassified, independent contractors who they believe are actually employees.  The courts, U.S. Department of Labor, Internal Revenue Service, Colorado Division of Employment and Colorado Division of Labor may consider many different facts in making the determination of whether an individual is an independent contractor or an employee.  However, all these agencies will use three main categories in that determination:

  • Behavioral control
  • Financial control
  • Type of relationship

For more information on how to determine if an individual is an employee or an independent contractor go to www.irs.gov.   If, after searching for information to help with the determination, it is still unclear, then you can download and submit the SS-8 form.  The government will review the information and provide the correct status.

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Contributed by Todd Morris, Vice President Commercial Lines, CB Insurance

I had every intention of posting on a different topic than my last blog until I read this article.  To summarize, a couple in Colorado was in the process of refinancing their dream home and, as most of us would have, they expected everything to work smoothly.  However, when a cyber criminal stole the funds intended to pay off their existing mortgage, the couple was left facing the battle of fixing their credit and keeping their home. This situation makes it painfully clear that cyber crime is a real problem.

Our own president recently commented on the issue of cyber security.  The growing number of attacks on our cyber networks has become, in President Obama’s words, “one of the most serious economic and national security threats our nation faces.”  Long gone are the days when hackers would brag about the fact they were able to gain access to your systems or deface your website.  Today’s hackers are sophisticated criminals who want your money.

The Department of Homeland Security plays an important role in countering these threats.  Check out DHS tips on cyber security  so you can become more aware of how serious these threats are and can begin taking steps to protect yourself, your identity, and your hard-earned assets.

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Contributed by Todd Morris, Vice President Commercial Lines, CB Insurance

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With Thanksgiving around the corner, you are sure to be getting your camera ready to capture those special moments.  But be watchful next week when you receive an email from a friend who is sending you pictures from their Turkey Day in an attachment or through a photo-share website. Why?  You may open the attachment or click on the link only to have unknowingly downloaded malware that now allows someone unauthorized access to your computer.  Sounds a little more Halloween than Thanksgiving, huh?

The sophistication of cyber criminals today has greatly evolved from the days of experimentation to highly-profitable cyber crime.  Cyber criminals intend to use your machine (as part of their network of millions) for illegal activities and leave a trail so difficult to track that they are long gone before they are noticed.

These threats are real as I’ll explain more in future posts, but there are also many measures you can take to protect your business network and your personal computers. In the meantime, be safe, enjoy your turkey, and be sure to send me your favorite holiday photos too!

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