Item 11: Franchisor’s Assistance, Advertising, Computer Systems, and Training

Consistent with the UFOC Guidelines, Item 11 of the amended Rule requires the
disclosure of the franchisor’s obligations under the franchise agreement to furnish assistance to
franchisees. The disclosure requirements encompass pre-opening assistance (e.g., site
selection), as well as any ongoing assistance, such as advertising and training, during the
operation of the franchise.

Another specific topic that must be covered under Item 11 is any mandatory computer or
software purchases and related costs that a franchisee will incur. In this regard, and as discussed
below, the amended Rule’s Item 11 requires less detailed disclosures about computer system
requirements than did the corresponding item in the UFOC Guidelines. The amended Rule’s Item 11 also follows the UFOC Guidelines in requiring either disclosure of the franchisor’s
operating manual table of contents or access to the operating manual itself.

For each assistance obligation disclosed in Item 11, franchisors must include a citation to
the specific section number of the franchisee agreement that imposes the obligation on the
franchisor.

Required Statement about the Limited Extent of the Franchisor’s Obligation to Furnish Assistance

Under the amended Rule, franchisors must begin their Item 11 disclosure with the
following prescribed statement, in bold type:

Except as listed below, [the franchisor] is not required to provide you with any assistance.

This warning is intended to alert prospective franchisees, and to counter any misrepresentations
to the contrary. It also serves to dispel any misconception on the prospective franchisee’s part
that a minimum degree of assistance is inherent in any franchise offer.

Pre-Opening Assistance

After the standard statement about the franchisor’s limited obligations to furnish
assistance, the first disclosure topic under Item 11 is the franchisor’s pre-opening obligations to
the franchisee, including any site location assistance, such as, for example, negotiation of the
purchase or lease of the site, site approval requirements, and the typical length of time it takes to
open a franchise.

Continuing Assistance

Following disclosure of the franchisor’s pre-opening assistance obligations, Item 11
requires disclosure of the franchisor’s obligation to provide continuing assistance to the
franchisee after the franchise is opened. Many different kinds of assistance must be disclosed,
although the specifics will vary depending on the type of franchise.
Except as listed below, [the franchisor] is not required to provide you with any assistance.

Optional Assistance

Some franchisors provide pre-opening assistance or ongoing assistance after the opening
of a franchise that they are not obligated by the franchise agreement to provide. Such assistance
may be included in the Item 11 disclosure, provided that it is set out separately and clearly
identified as assistance that is not required by the franchise agreement.

Advertising Assistance

One common and very important type of assistance is advertising. The information required to be disclosed regarding this type of assistance includes, for example:

• whether the franchisor is obligated to conduct advertising;
• the media used for any advertising (e.g., print, radio, television, or Internet);
• the source of the advertising;
• the geographical scope of the advertising (i.e., local, regional, or national); whether franchisees must contribute to an advertising fund or spend any specified amount on advertising in their local area; and
• the role of any advertising councils or cooperatives and how they operate.

For any advertising fund to which a franchisee must contribute, Item 11 requires
franchisors to disclose who contributes to the fund, whether other franchisees and franchisorowned
outlets contribute on the same basis, who administers the fund, whether the fund is
audited, whether its financial statements are available for review, whether franchisees receive a
periodic accounting of fund expenditures, and the percentage of the fund, if any, used
principally to solicit new franchise sales.

Multiple Brand Advertising

If a franchisor offers more than one branded or trademarked franchise for sale, it should,
as a general rule, segregate its disclosures for each brand. Nevertheless, it may be impractical or
unreasonable for the franchisor to segregate advertising funds by brand. In such circumstances,
a franchisor may aggregate its advertising fund disclosures across its brands, as long as the
disclosure makes clear that the advertising funds are aggregated across brands.

Allocation of Production and Administrative Expenses

Item 11 requires franchisors to disclose the use of advertising funds in the last fiscal
year, including percentages spent on production, media placement, administrative expenses, and
other described expenses. A franchisor’s internal costs associated with advertising production
(e.g., supplies, photography, and computer graphics) can be characterized as production
expenses. The franchisor, however, must have a reasonable basis for claiming the allocation of
production expenses at the time disclosure is made. Similarly, if an advertising fund pays all or
part of the salaries of franchisor personnel who are involved in the advertising of the franchise
system’s products or services, those costs – if reasonable – can be considered a production or
administrative expense if the allocation is explained in the Item 11.

Computer Systems

Like Item 11 of the UFOC Guidelines, the amended Rule’s Item 11 mandates disclosure
of any requirements that franchisees purchase or use electronic cash registers or computer
systems, including their hardware and software components. The amended Rule’s Item 11
disclosures on this topic, however, are narrower than those in the UFOC Guidelines. Item 11 of
the UFOC Guidelines required franchisors to identify each component of hardware and software
by brand, type, and principal function, or to identify compatible equivalents and whether they
had been approved by the franchisor. By contrast, under the amended Rule, the franchisor need
not identify each and every piece of hardware and software by brand, type, and principal
function. Nor must the franchisor identify compatible equivalents and explain whether the
franchisor has approved them. It is sufficient for franchisors to describe generally:

• the cash register or computer systems to be used, if any;
• any obligation of the franchisor, an affiliate, or third party to provide ongoing maintenance, repairs, upgrades, or updates;
• the cost of purchasing or leasing the system, and the annual cost of any optional or required maintenance, upgrades, or support contracts;
• any obligation of the franchisee to upgrade or update any such system, and any contractual limits on the frequency and cost of that obligation; and
• whether the franchisor will have access to information contained in those systems.

This information about required computer systems is designed to enable prospects to weigh the
costs and benefits of purchasing a specific franchise. Further, it is designed to enable
prospective franchisees to assess readily whether they may be at a technological advantage or
disadvantage compared to franchisees of competing franchise systems.
The amended Rule recognizes that start-up franchisors may be uncertain about which
computer systems or software they will expect franchisees to use. Accordingly, Item 11 is
flexible. In its Item 11 disclosures, a start-up franchisor may indicate that computer
requirements are yet to be determined, if that is the case, or otherwise factually state its policy
concerning computer usage. The fact that a start-up franchisor has not finalized its plans for
electronic cash registers or computer systems is itself material information to disclose to
prospective franchisees.

Operating Manuals

Item 11 requires franchisors to disclose the table of contents of the system’s operating
manual that franchisees receive, and certain other information about the manual, as of the end of
the franchisor’s last fiscal year or a more recent date. The table of contents of the operating
manual can be included as one of the exhibits in Item 22 of the disclosure document.

The operating manual table of contents need not be disclosed if the franchisor offers the
prospective franchisee the opportunity to review the operating manual itself before buying the
franchise. It is important to note that merely asking a prospective franchisee to first sign a
confidentiality agreement before permitting access to the operating manual will not trigger the
disclosure requirement of the amended Rule. While the signing of a confidentiality agreement
is “in connection with the proposed franchise sale,” it does not bind the prospective franchisee
to purchase the franchise or to undertake other financial obligations, such as the signing of a
lease. This assumes, however, that the confidentiality agreement contains no other agreements
that, in the absence of the confidentiality agreement, would trigger the obligation to provide the
disclosures required by the amended Rule.

Training

Finally, Item 11 requires franchisors to disclose their training program as of the end of
their last fiscal year or a more recent date. Some of the training disclosures must be summarized
in a table titled, in bold, capital letters, “TRAINING PROGRAM.” The table must include a
listing of the subject matter of the training, the hours of classroom training on each subject,
hours of on-the-job training, and the location of the training. Other required information – such
as who may and who must attend training, whether successful completion of training is required,
the charges for the training, if any, who pays for any travel and living expenses, and whether
additional training or refresher course are required – may be disclosed after the table.

The amended Rule’s Item 11 also calls for disclosure of information about the staff who
provide the training. If the franchisor’s training staff is large or changes frequently, the
franchisor can use a general description of the background and experience of the staff providing
the training. Also, franchisors should disclose here (if not disclosed in Item 2) the corporate
officer in charge of training, if any, along with information about his or her experience.

This article is part of a series of articles on starting a franchise in Minnesota. 

Independent Contractors In The Construction Industry

Minn. Stat. 181.723, requires individuals (not corporations, LLCs or partnerships) who work as independent contractors in public or private commercial or residential building construction to obtain from the Minnesota Department of Labor and Industry an Independent Contractor Exemption Certificate (ICEC). For purposes of state’s workers compensation, unemployment insurance, wage and hour, and occupational safety and health laws, individuals doing building construction work without an ICEC will be employees of the contractor for whom they are working.

To obtain an ICEC, individuals must complete and submit an application that establishes that they meet the conditions required to operate as an independent contractor. To operate as independent contractors, individuals must be able to meet the conditions set out in the new law’s nine-factor test.

An ICEC permits individuals to work as independent contractors. Certificate holders, however, may work as either independent contractors or as employees. Whether a certificate holder is working as an employee or an independent contractor will depend on the conditions of the particular work relationship. To be an independent contractor, in addition to having the ICEC, the conditions of the work relationship must also meet the nine-factor test:

1. maintains a separate business with the independent contractor’s own office, equipment, materials, and other facilities;
2. holds or has applied for a federal employer identification number or has filed business or self-employment income tax returns with the federal Internal Revenue Service based on that work or service in the previous year;
3. operates under contracts to perform specific services or work for specific amounts of money and under which the independent contractor controls the means of performing the services or work;
4. incurs the main expenses related to the service or work that the independent contractor performs under contract;
5. is responsible for the satisfactory completion of work or services that the independent contractor contracts to perform and is liable for a failure to complete the work or service;
6. receives compensation for work or service performed under a contract on a commission or per-job or competitive bid basis and not on any other basis;
7. may realize a profit or suffer a loss under contracts to perform work or service;
8. has continuing or recurring business liabilities; or
9. the success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures.

Applications for the ICEC are available from the Minnesota Department of Labor and Industry at www.dli.mn.gov/CCLD/ICEC.asp . The application and renewal fee for the certificate is $165. Independent contractors will be required to renew their certificate every two years.

Contractors are obligated to verify that the workers with whom they enter into agreements as independent contractors have a current exemption certificate. Contractors are required to maintain a copy of these certificates for five years. The DLI will maintain a list of certificate holders on its website, and certificates for those individuals will be available for download.

Contractors who employ individuals who do not have an ICEC will face penalties if they do not provide workers’ compensation and unemployment insurance to these individuals, and do not properly withhold state and federal taxes from their employee’s pay.

Independent Contractors

Persons who follow an independent trade, business or profession in which they offer their services to the general public usually are considered independent contractors and not employees. However, whether such persons are employees or independent contractors depends on the law and facts applicable to each case. For example, Minnesota law considers nonresidents who perform personal or professional services in Minnesota to be employees for certain purposes, such as income tax withholding. This is true even though under federal law they would be considered self-employed independent contractors. Similarly, certain individuals such as direct sellers and real estate agents are by statute considered independent contractors for federal tax purposes if certain conditions are met.

In general, the individual will be considered an independent contractor if the business entity obtaining the person’s services has the legal right to control the result of the work but does not have the legal right to control the manner and means of accomplishing the result.

Independent contractors offer their services to the public through the exercise of an independent business enterprise. An independent contractor is responsible for making his or her own estimated tax payments and paying self employment (Social Security and Medicare) tax. The business that obtains the independent contractor’s services generally is not required to obtain workers’ compensation insurance, withhold taxes or pay employment taxes on behalf of the independent contractor. Independent contractors generally do not receive benefits such as paid holidays, health insurance or sick pay from the business that obtains their services.

Statutory Employees

Even if a worker is not an employee under common law rules, he or she may be considered an employee for certain statutory purposes, such as FICA (Social Security and Medicare) tax, federal and state unemployment insurance taxes, workers’ compensation, Fair Labor Standards Act compliance, occupational safety and health requirements, and other statutory programs. Likewise, a federal or state statute may exempt certain employers or employees from its application.

Because both federal and state statutes define employees covered by their respective laws, both sources must be consulted before concluding a legal requirement is not applicable to a specific situation. Special rules apply to certain occupations, such as salespersons, and to special situations such as family owned businesses that employ family members.

The definition of “employee” often involves a legal determination. For this reason, particularly in unclear cases, it is important to consult an attorney before concluding an individual is not an employee.

Common Law Employees

Under common law rules, courts balance a number of factors to determine whether an employer- employee relationship exists. The employer‘s right to control the manner and means of performing the work is the most important factor distinguishing an employer-employee relationship. It does not matter that the employer gives the employee substantial discretion and freedom to act, so long as the employer has the legal right to control both the method and result of the service.

Some of the other factors examined by the courts in determining whether an employment relationship exists include:

• Mode of payment. Workers who are paid on a regular basis, e.g., hourly or bi-weekly, are more likely to be considered employees than are persons who are paid a fixed amount for a specific service, regardless of the amount of time taken to complete the task. Withholding for taxes and providing fringe benefits such as medical insurance are considered typical of an employer-employee relationship.
• Materials and tools. A person who furnishes his or her own materials and tools and equipment and has a significant investment in the tools and equipment used in connection with providing the service is less likely to be considered an employee than is a person who uses tools and materials furnished by the hiring entity.
• Control of the premises. An employer-employee relationship is more likely to be found where the hiring entity owns or controls the premises where the work is performed. Premises controlled by the service provider or by a third person are considered more characteristic of an independent contractor relationship.
• Right of discharge. The ability of the hiring entity to terminate or discharge the worker and/ or the ability of the worker to leave before the task is completed without becoming liable for nonperformance under the contract or agreement also are factors examined in determining whether an employment relationship exists.

It is important to note, however, that none of the above factors, standing alone, will determine whether an employment relationship exists. The most important factor is the hiring entity’s right to control the manner and means of completing the work. Doubtful situations generally are resolved by examining the facts of the specific case in light of all relevant factors.

If an employment relationship exists, the legal requirements placed on employers will apply regardless of what the parties call the worker, regardless of how payments are measured or made, and regardless of whether the person works part time or full time, unless a statutory exception applies to the situation.

In some cases, an employment relationship may exist between the employee and more than one employer, creating a situation of joint employment. A common example of this is when businesses obtain employees on contract from a temporary employment agency. It is important for employers to know that when they are in a situation of joint employment, both employers are jointly responsible to ensure that the employee is paid in accordance with the federal Fair Labor Standards Act as described in the Labor Standards section of this chapter. Note also that the Equal Employment Opportunity Commission (EEOC) has issued guidance on the application of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA) and the Equal Pay Act (EPA) to individuals placed in job assignments by temporary employment agencies and other staffing firms (the EEOC refers to such individuals as “contingent workers”). In that Guidance, the EEOC states that either the staffing firm or the client (i.e. the business to which the contingent workers have been supplied), or both, may properly be considered an employer. If either or both has “control” over the contingent worker’s work, that party will be an employer under Title VII, the ADA, the ADEA, and the EPA. Also, even if either lacks such “control”, it will be considered an employer of that contingent worker, if it has enough other employees so as to be subject to those laws.

Item 10: Financing

Like Item 10 of the UFOC Guidelines, Item 10 of the amended Rule requires franchisors
to disclose all material terms and conditions of any financing arrangements. The required
disclosures include:

• The rate of interest, plus finance charges, expressed on an annual basis;
• The number of payments;
• Penalties upon default; and
• Any consideration received by the franchisor for referring a prospective franchisee to a lender.

Franchisors may use the tabular format set forth in the Rule to summarize the financing
arrangement, but that format is not required. Disclosure of financing terms and conditions in

Item 10 does not prevent the parties from negotiating different terms and conditions after the
disclosure. As discussed above, however, prospective franchisees will have seven calendar days
to review any changes in financing terms or conditions if the changes were made unilaterally by
the franchisor, because such changes in financing terms or conditions are presumptively material
to the franchisee’s purchasing decision.

Financing Agreements

For purposes of Item 10, the term “financing agreement” includes any “leases and
installment contracts . . . that the franchisor, its agent, or affiliates offer directly or indirectly to
the franchisee.” Indirect offers of financing include a written arrangement between a franchisor
or its affiliates and a lender, where the lender offers financing to a franchisee. It also includes
instances where a franchisor or an affiliate receives a benefit from a lender in exchange for
financing a franchise purchase, as well as instances where the franchisor guarantees a note,
lease, or other obligation of the franchisee. If the franchisor or an affiliate receives a benefit
from the lender, the franchisor must disclose the amount or method of determining the payment,
the source of the payment, and the relationship of the source to the franchisor or its affiliate.
Sample copies of any financing agreements must be included in Item 22.

Interest Rate

Franchisors offering financing must disclose the rate of interest, plus finance charges,
expressed on an annual basis, consistent with consumer credit transactions. Indeed, the interest
rate disclosures are modeled on the disclosures lenders make under the Federal Reserve’s
Regulation M (Consumer Leasing), 12 C.F.R. Part 213, and Regulation Z (Truth in Lending), 12
C.F.R. Part 226. These regulations, however, cover personal property leases and credit
transactions that are “primarily for personal, family, or household purposes.” Accordingly, they
generally do not apply directly to lease and financing transactions undertaken in connection with
the purchase of a franchise. Nonetheless, franchisors may look to the Truth in Lending and
Consumer Leasing regulations for guidance in preparing their Item 10 interest rate disclosures.

Variable Rates

Interest rates or finance charges may fluctuate between the time when the prospective
purchaser receives the disclosure document and the time when he or she actually executes the
financing agreement. Anticipating such a situation, the amended Rule provides disclosure of
what the rate of interest, plus finance charges, expressed on an annual basis, was on a specified
recent date. A franchisor may include a footnote stating that the interest rate may vary or state a
formula by which the rate may change until the financing agreement is signed. Where the rate
may change during the life of the loan, disclosure of that fact is required under the Item 10
“catch-all” requirement, which calls for disclosure of “other material financing terms.”

Issues for Employers

Who Is An Employee?

The next several posts will discuss different types of workers, including:

• Common Law Employees
• Statutory Employees
• Independent Contractors
• Independent Contractors In The Construction Industry
• Independent Contractors In The Trucking And Messenger/Courier Industries

In General

Many laws affecting the worker/employment relationship will require the business owner to first determine whether an individual who performs services for the business is an “employee” for purposes of the particular law. Business owners who use “independent contractors” may think they do not have employees and, therefore, employment laws do not apply to them. An individual’s status as an independent contractor, however, is not determined by agreement or by what he or she is called; the individual’s status is determined by what he or she does.

The relationship between the business and the individual may be that of:

• A common law employee.
• A statutory employee.
• An independent contractor.

If the individual is a common law employee, the business by law must obtain workers‘ compensation coverage, withhold FICA (Social Security and Medicare) and income taxes, pay the employer’s share of the FICA tax and pay federal and state unemployment taxes. Fair labor standards laws, occupational safety and health requirements and a variety of other federal and state laws also may apply.

If the individual is a statutory employee, the business does not withhold federal or state income tax. The employer should consult with an attorney or other competent tax advisor with respect to withholding Social Security and Medicare taxes and paying unemployment tax. Fair labor standards laws will probably apply.

An independent contractor is himself or herself a sole proprietor of a business, and not an employee of the firm who contracts with them. The tax requirements for sole proprietorships are discussed in the “Choosing the Form of Business Organization – Tax and Non-Tax Considerations” section of this Guide.

Click here for a video describing the differences between contractors and employees.

*A comprehensive discussion of employment issues is provided in the publication An Employer’s Guide to Employment Law Issues in Minnesota, available without charge from the Minnesota Small Business Assistance Office, 1st National Bank Building, 332 Minnesota St., Suite E200, St. Paul, MN 55101-1351. Another employment-related publication available from the Minnesota Small Business Assistance Office: Why and How to Conduct a Human Resources Audit in Minnesota. The text of each of these publications can be found at www.positivelyminnesota.com/sbao

The question of whether a worker is an independent contractor or an employee may be determined by common law rules (definitions fashioned by the courts based on specific cases) or by statute. An person may be an employee for certain purposes but not for others. If a question arises, the employer is strongly urged to seek professional advice.

Help For Businesses Unable To Obtain Liability Insurance

The availability and cost of business insurance, particularly professional liability and general commercial liability coverage, have attracted substantial recent attention. To help remedy this problem, two state programs assist businesses that are experiencing difficulty in obtaining liability insurance. These programs are the Joint Underwriting Association (JUA) and the Minnesota Market Assistance Plan (MMAP) program.

The JUA was created to provide liability insurance coverage only to persons or entities unable to obtain insurance through ordinary methods if the insurance is required by statute, ordinance or otherwise required by law, or is necessary to earn a livelihood or conduct a business and serves a public purpose. The legislature specifically authorized the JUA to provide insurance coverage to day care providers, foster parents, foster homes, developmental achievement centers, group homes, sheltered workshops for mentally, emotionally, or physically disabled persons and certain citizen participation groups. The eligibility of other classes of business for JUA coverage is determined on a class by class basis.

The JUA is specifically prohibited by statute from issuing either product liability coverage or environmental impairment coverage. Further, the JUA cannot issue coverage to any business which is conducted substantially outside the state of Minnesota unless the insurance is required by statute, ordinance, or otherwise required by law. The JUA may reject high risk clients and risks it deems hazardous.

After having been unable to find an insurer willing to write the coverage sought, application may be made to the JUA. A copy of each application is forwarded to the Minnesota Market Assistance Program. MMAP has 30 business days to produce a quote for an applicant before the JUA can extend coverage. Upon receipt of an application, the JUA will make a determination whether the risk falls within a class for which the Association has already been activated to provide assistance. The Commissioner of the Minnesota Department of Commerce may publish notices of activation of the JUA for specified new classes of business each week in the State Register. The JUA has the authority to insure classes of business for 180 days from the time the notice is published. A public hearing may be held with each notice of activation in order to receive testimony from a class of business to determine whether statutory requirements for JUA coverage have been met.

The actual time frame for issuing a policy is dependent on several factors including whether:

• The appropriate policy form has been approved for use by the JUA Board of Directors;
• A rate schedule has been adopted for that class;
• The class or particular applicant requires committee or Board review prior to quoting;
• The 30-day MMAP period has expired and no quote for coverage has been offered;
• The applicant’s current coverage has expired;
• The MMAP has reported to the JUA that no market can be found; or
• The applicant is quoted by MMAP a premium rate ten percent or more in excess of the JUA‘s rates for similar coverage.

Item 9: Franchisee’s Obligations

Item 9 of the amended Rule requires the disclosure of a franchisee’s principal
obligations in the prescribed tabular format that references the franchise agreement or other
relevant contracts, and the disclosure document sections where more information about the
particular obligation can be found. If a particular obligation is not applicable, franchisors should
simply state “Not Applicable” at that place in the chart. Franchisors should include additional
obligations, as may be warranted for their particular franchise system, in the “other” section of
the chart.

This article is part of a series of articles on starting a franchise in Minnesota. 

Insurance

Before you begin your business, you should thoroughly investigate your business insurance needs. The insurance industry today can tailor an insurance package to meet the general and specialized needs of almost every business.

Because the insurance problems and needs of each business differ, no general insurance program can be outlined to fit every business. To be completely satisfactory, it should be tailored to fit the individual needs of each business. You should consult with an experienced insurance agent or broker.

Types Of Insurance

Business insurance is a matter of good business judgment. It is difficult to conceive of a sound business not carrying insurance custom-tailored to its individual needs. Among the basic kinds of coverage you should consider are:

Property Insurance.

This protects the owner of the property (or the mortgagee) against loss caused by the actual destruction of a part or all of the property by fire, windstorm, explosion, falling aircraft, riot and other perils.

Business Interruption Insurance (and Other Time Element Coverages).

These protect a business against loss of earnings resulting from an interruption caused by damage to or destruction of the physical property. Business interruption insurance will pay you approximately what you normally would have earned. The premiums, especially when part of a complete insurance package, are low. There is also similar insurance which provides coverage if you are hospitalized and have to shut down business.

Liability Insurance (Including Business Automobile).

This protects a business against loss arising out of legal liability for death, injury or damage to the person or property of others caused by negligence. Included are obligations to pay medical, hospital, surgical and disability benefits to injured persons, and funeral and death benefits to dependents, beneficiaries or personal representatives of persons who are killed, irrespective of legal liability.

Bonds.

Fidelity bonds guarantee against loss due to the dishonesty of employees. Surety bonds guarantee the performance of various types of obligations assumed by contract or imposed by law. Surety bonds are most often used in the construction industry and are often required on public construction projects.

Information on the Minnesota Bonding Program which provides individual fidelity bonds to employers for job applicants who may be denied coverage can be found earlier in this Guide in the section Business Licenses and Permits.

Workers’ Compensation Insurance.

This provides for payment of compensation benefits, as established by state law, to injured employees of a business. See the section in this Guide on Workers‘ Compensation for additional information.

Group Insurance for Employees.

. Group life insurance and group health insurance provided as employee benefits must conform to standards established by state and federal statute. These requirements are described in greater detail in the section of this Guide on Employee Benefits.

Product Liability.

This refers to insurance coverage for any product manufactured by the insured. Coverage applies to the product once it leaves the manufacturer’s hands and covers the manufacturer in case the ultimate user of the product sues for bodily injury or property damage.

Social Networking.

Technology continues to change the landscape of potential employer liability. With the increasing popularity of online social networking websites, organizations should be aware of how employees use such technologies, especially in the workplace. Networking can be valuable, but employers must realize the potential risks and weigh the costs and benefits of allowing access to websites like Facebook, Myspace, Twitter, etc. in the workplace. For assistance in navigating any of these issues, contact you insurance agent or legal counsel.