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EPLI and Trade Credit Insurance Solomon Agency Corp has dutifully carried out its commitment to server the Greater New York community for over a decade. Our endless diligence in approaching our profession has resulted in this company as one of the leaders in the insurance & Financial Services industry in the New York Metropolitan area. EPLI and Trade Credit Insurance Prepared For : KOCHAM Presented by : Christian Pak Dated On : July 13, 2017 DISCLAIMER : The contents throughout this report are only intended to provide generally accepted understanding about the subject and do not express any legal opinion as to the nature of the subject. The abbreviated highlights of this report do not outline all provisions of the insurance policies that might be written for you. In any discrepancy between the highlights and the master policy, the master policy will govern. All terms, provisions, conditions, limitations and exclusions shown in the master policy will apply. EPLI Insurance EPLI (Employment Practice Liability)는 종업원과 고용주 사이에서 발생하는 각종 고용관련 분쟁에 따른 소송으로부터 회사를 보호하는 보험입니다. 일반적으로 한국계 직원과 비한국계 직원이 동시에 근무할 경우 고용관련 Issue 발생빈도가 높은데 보험사에서는 고용관련 분쟁 발생시에 소송비용을 비롯 중재가 진행될 경우 중재비용까지도 보상하는 등 보상의 범위가 포괄적입니다. EPLI 보험에서 보상하는 손해는 다음과 같습니다. • Failure to promote (승진 누락) • Wrongful termination (부당한 해고) • Employment related Mis-presentation (채용 /고용 허위 진술) • Sexual Harassment (성희롱) • Negligent Evaluation (부주의한 평가) • Wrongful Discipline (부적절한 교육) • Defamation (명예훼손) • Discrimination (차별대우) • Invasion of privacy (사생활 침해) • Emotional Distress (정신적 고통) EPLI Insurance EPL Claim Procedure 1st Report Claim Attorney EEOC Court Adjuster (Mediation) Agent review In 48 hours, After reviewing EEOC will Case will be and files the claim adjuster claim, adjuster review and try forwarded to claim to the will assign and will hire to mediate the court. company. contact INSD. attorney for case. the case. Final He/She will Both attorney Settlement will review the (INSD can use must agree be decided by case with their favorable about the jury. INSD and attorney under settlement. collect the company If not, it goes information permission) to Court ================ Claim expense will be begun =========== • Defense Counsel with significant expertise and experience • Defense Costs Coverage • Indemnity Coverage EPLI Insurance Real Life Claim Scenario Korea based company: 130 employees over 8 locations in U.S. Date Type of Claim # of Employee Status Attorney Expense Settlement Total Claim Expense 2009 Wrongful Termination 3 Closed $33,382 $15,000 $48,382 2010 Defamation 1 Closed $26,010 $40,000 $66,010 2011 Age Discrimination 2 Open $36,483 $0 $36,483 2015 Racial Discrimination 5 Open $89,210 $500,000 $589,210 Total $185,085 $555,000 $740,085 EPLI 사고에서 많은 비용을 차지하는 부분은 변호사 고용 비용이며 이는 EPLI 보험으로 보상을 받으실수 있습니다. 고용주에게는 생소한 EPLI 사고를 대처할때 보험회사는 각 Case별로 뛰어난 변호사를 선임하여 Defense해줍니다. 또는 고용주가 원하는 변호사가 있을경우 보험사에서 검토 후 retain하실수도 있습니다. Case가 발생하게 되면 고용주와 종업원은 일단 EEOC(평등고용위원회)라는 정부 기관에서 Mitigation을 하게 됩니다. 고용주와 종업원은 본인을 대변하는 변호사를 고용하여 유리한 협상을 통해 이득을 보려 합니다. 이 과정에서 전문 변호사의 도움을 받아 현명한 Negotiation으로 조기에 Claim을 마무리 지어 자칫 큰 사고로 번지는 것을 미연에 방지 할수 있습니다. 또한, 법정으로 Case가 간다 하더라도 보험사에서는 Policy Limit ($1MIL)까지 변호사 비용 및 Settlement까지 보상을 받으시게 됩니다. EPLI사고는 일반 보험 담당자가 사고를 Follow Up 하기 보다는 Management에서 관리를 하게 되며 많은 스트레스를 받으시게 됩니다. EPLI 보험을 가입하여 보험사에게 사고 처리를 위임하여 Management는 본연의 업무에 매진 할수있도록 한다하여Management Liability 보험이라고도 불리웁니다. Trade Credit Insurance 공급자가 보험기간 중에 외상으로 공급한 물품 또는 용역대금을 구매자가 결제일에 결제하지 못함에 따라 공급자가 입게 되는 손해를 보상하는 상품 . 구미 선진국에서는 19세기부터 많은 기업들이 상업신용보험을 통하여 신용거래의 한계를 극복하고 거래를 활성화 . 대표적인 Credit 보험사: Euler Hermes, Coface, Atradius 그리고 AIG Co. AIG 보험사의 특징: Selected portfolio & Non-cancellable coverage Benefit of Credit Insurance 재무관리 . 현금흐름의 안정성 확보 . 재무제표(대차대조표)의 견실화 매출관리 . 매출신장에 따른 M/S 제고 . 매출채권관리의 효율성 제고 위험관리 . 신용위험에 대한 안전장치 . 신용위험 통제 Trade Credit Glossary Type Definition Insured 보험 계약자, 채권자, 가입자 겸 피 보험자 [물품 및 용역 공급자] Buyer 수요자, 채무자 Buyer’s Limit 신용한도, 구매자별로 신용도를 평가하여 신청한 한도 내 산출 Non-cancellable coverage Bankruptcy 나 Past due 90일 이상 이외에 보상한도는 일년 보험 가입기간 동안 유지 조항 Policy Period 통상 1년 Premium 통상 보험 가입대상 매출액의 0.25% (보험 종료 후 보험료 정산) Credit Check Fee 신용한도 확인 비용 (AIG: $75 US & Canada Buyers & $175 Foreign Buyers) Insured Percentage 보험금 지급액 (최종 손해액 X 통산 90%) Aggregate Deductible 자기 부담금 (통상 $10,000 로 시작) Policy Limit of Liability / Face 총 보상 한도 금액 Amount Trade Credit Glossary (Continued) Type Definition Insurable Interest 협의된 결제기간 (Terms of sale – Max 120 days)내의 물품 및 용역 공급 계약 Exclusion 면책 대상. 전쟁, 기타의 변란으로 인하여 발생한 손해 이외에 피보험자의 고의 또는 법령에 위반하는 행위로 인하여 생긴 손해, 보험 개시전에 발생한 손해, 해약금, 손해 배상금, 법정 비용으로 인한 손해 등을 면책 사유로 정함 - Breach of Contract and/or Dispute Trade Credit Insurance WHAT IS CREDIT INSURANCE / ACCOUNTS RECEIVABLE INSURANCE / TRADE CREDIT INSURANCE? Benefits of Credit Insurance: Protection against insolvencies Protection against past-due write-offs Potential to increase sales safely thru information Better borrowing position with insured receivables Policy pays for itself/profit center Business Sales Cycle FUNDING RECEIVE MAKE PAYMENT PRODUCT SHIP GOODS TAKE ORDER CREDIT DECISION Credit Insurance Why Is Credit Insurance Important? . Few companies can compete without extending credit to their customers. Most companies insure their buildings, machinery, staff and inventory but not their A/R – which provides the cash flow for the business. Receivables are vulnerable to unexpected bad debt losses and fluctuations in business cycles. A company operating with a 10% margin would have to make an additional $1 million in sales to make up for a $100,000 credit loss. Ideal Candidates for Credit Insurance . Any company that sells to other businesses on short-term credit terms (up to 180 days) . Concentration of trade receivables . Thin profit margins . Growing sales due to market expansion &/or merger/acquisition . Export sales . Manufacturers, wholesalers, distributors, and service providers with annual domestic or export sales of $3 million or more. Broad range of target industries including, but not limited to: . Metals . Pharma . Food . Technology/Computers . Electronics . Chemicals . Machinery & Equipment . Energy/Oil & Gas . Transportation . Telecommunications . Packaging . Apparel . Consumer Goods Business Credit Insurance Indemnifies policyholder against unforeseen bad debt losses due to commercial and/or political risks. Part of Sound Risk Management Strategy Manage Expected Risk Manage Unexpected Risk GOOD DECISIONS PROTECTION Information Insurance Your Credit Expertise Self-insurance Companies use credit insurance for four primary reasons . Catastrophic Risk Protection . Sales Expansion . Bank Financing . General Loss Prevention “My Accounts Are as Good as Gold..?” ??? 14 14 © Copyright Euler Hermes EH Americas: Credit Insurance Overview Credit Lines continued Credit Lines PRODUCT TARGET CUSTOMER AIG brings unparalleled experience, heavyweight capacity, and abundant global expertise to SURETY political risk, trade credit, and surety lines. We have a decades-long track record of helping Commercial Bonds clients navigate the unpredictable global landscape, whether by providing the in-country Court or judicial bonds address a variety of court or appeal requirements. Contractors, multinationals, and other well established License, permit, customs, and miscellaneous bonds can cover license, companies with strong finances and ongoing bonding knowledge clients need to resolve problems before they escalate, online tools to efficiently permit or fixed and limited financial obligations, such as utility deposits, requirements. Market sectors include large industrial manage global credit risk, or surety solutions to address complex exposures quickly. which enable companies to operate in many state or local jurisdictions. and services companies, construction, infrastructure, engineering, support services, transport, FMCG, and alternative and renewable energy. WHY AIG Contract Bonds •Unparalleled local underwriting and policy servicing capabilities worldwide. Surety contract bond facilities can help clients meet requirements to post Investment grade, multinational companies with •Strength and commitment to address the most complex risk challenges long term. bid, performance, labor, material payment, and other contract bonds for ongoing bonding requirements. Market sectors specific construction or infrastructure projects. include construction, infrastructure, engineering, •More than 35 years of experience in trade credit and political risk insurance. support services, transport, FMCG, and alternative and renewable energy risks. •More than 70 years of experience providing surety worldwide. •Industry-leading political risk limits up to $150 million, with terms up to 15 years. TRADE CREDIT •Flexible, cost-effective trade credit coverage designed to ensure steady cash Domestic, Foreign, Global Accounts flow and mitigate risk of non-payment by key customers. Receivable Insurance •Credit management tools and debt collection services for trade credit clients: Covers loss arising from buyer non-payment whether due to buyer Any companies with trade receivables. Global Limits Manager enables companies to conveniently manage and monitor insolvency, protracted default, or failure of the exchange authority in the all customer credit limits in every market. buyer’s country to transfer foreign currency. •Access to local experts to mitigate political risk related losses worldwide — Medium Term Trade Credit from economists, to attorneys, to claims regulators. Protects manufacturers and lenders against losses arising from customer Capital equipment manufacturers and distributors.
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