world cup insurance
Nasir Pasha & Matt Staub

Ep 57: Company Scores with World Cup Insurance

Nasir and Matt get World Cup fever as they delve into insurance coverage for the big event.  The guys also answer the question, “I own a restaurant. Can I help get to the new minimum wage by giving them a $1 food credit each hour?”

Transcript:

NASIR: Welcome to Legally Sound Smart Business!
This is Nasir Pasha.
MATT: And this is Matt Staub.
NASIR: And welcome to our podcast where we cover business in the news with our legal twist and also answer some of your business legal questions that you, the listener, can send in to ask@legallysoundsmartbusiness.com. This is our Friday episode – my favorite.
MATT: Yeah, I think it’s what is it? Follow Fridays on Twitter so this is a good opportunity – if you’re listening to this on a Friday morning – I guess you can’t follow us because we don’t have a Twitter for the podcast but what’s the closest thing? You could subscribe on iTunes.
NASIR: Just follow us around where we go, you know, and that’s fine, too. Just stalk us.
MATT: Yeah, I take my gigantic mic with me everywhere I go, just in case I need to record something. So, it’ll be easier to spot me on the streets.
NASIR: And your computer, too, of course, it has to be connected somewhere.
So, just follow us around and you can listen in to our live recordings.
MATT: Always ready to record.
NASIR: All right, what have we got here? World Cup is well on its way by now even though we’re recording this early. I hope we’re covering the world Cup again, right?
MATT: Yeah, this is actually very pertinent to right now as we’re recording because there’s a match going on where it’s raining pretty heavily.
What we’re going to talk about today is insurance involved with the World Cup and one of the things is the weather – if there’s any sort of delay – you know, if they’re going to play in rain – but, if there’s lightning, for example, they can’t play, obviously. But what this gets to is they talk to the main insurance underwriter for the World Cup and, as you can imagine, this is a pretty big deal to be in this position. The World Cup happens once every four years and internationally is just a massively followed event. So, there’s obviously a lot of types of things that can go wrong and there’s a lot of insurance that’s going to be put into place in order to combat those issues that might arise.
I mentioned weather but, you know, soccer, the fans can get a little bit rowdy so there’s destruction concerns as well but there’s lots of other things.
NASIR: Yeah. Well, coupled with the fact that it’s in Brazil and I think everyone’s been listening about some of the issues surrounding the games there. You know, it’s a developing country. There’s a lot of poverty there and you have all these games being built up.
I remember, even when I went there, they were actually moving some of the shanty towns and basically the shanty towns that were next to the main streets, they were actually putting in nicer housing there. But then, behind, just leaving it just as is. Basically, when you drive through it, it looks better, but it’s just almost a façade. There’s that going on. Then, of course, some of these stadiums aren’t even completely built yet. There’s a game tomorrow which is the England game which I’ll be watching. This is tomorrow, Saturday. That’ll be fun. I heard that stadium is not up to standard yet but hopefully nothing happens.
MATT: Well, I did see that some of the fields there, there was just videos of people using green spray paint to spray paint the fields because it was just dead in areas. Kind of funny. I mean, it’s not like it’s the end of the world if there’s some dead spots. I mean, I guess it looks prettier on TV.
NASIR: That’s not as bad as if it’s like any kind of structural integrity issues which that’s what I thought they were implying. I mean, that’s fine. All they need is a field. They don’t need grass necessarily everywhere either. It is Brazil.
MATT: Yeah, and another thing too is this is one reason why they announced the venues for these huge venues so far in advance. The Olympics I think is even farther in advance but this is I think seven years it was named. The insurance underwriters pretty much started from day one – sent a team out and you have to cover so many risks. It’s just crazy how involved they are for a whole seven-year period. It’s nice.
Well, I guess they have the Olympics coming up too in a couple of years.
NASIR: Yeah, in two years.
MATT: It’s going to be pretty chaotic times. Hopefully the country’s okay after this because you hear so many stories of the Olympics and World Cup being in spots and just decimating the land and kind of ruining things.
NASIR: Yeah. Well, back to insurance, since this is not a World Cup podcast nor is it an insurance podcast but I think insurance is one of the things that most small businesses underappreciate and mainly because their level of risk is lower than the World Cup for example or bigger businesses. And so, you’re not going to appreciate it until you go through a loss. But people have to also remember, even the FIFA context, when you have all these vendors contracting with each other, each of these contracts usually have some requirements that that vendor is properly insured because, even if they make a mistake and they cause a lot of damage, are you going to go after them to get that money when it may be a small vendor or if you’re a small business for example? Some big loss like that can just kill your business. So, making sure that the people you’re contracting with is insured as well as you’re insured is just as important.
MATT: Right, and that’s something that sometimes gets overlooked. You know, we obviously look through a lot of contracts and sometimes it’s in there and sometimes it’s not but it’s a simple thing that you can request from the other side because, if there is any sort of issue, it is going to make things a lot easier than no insurance policy in place.
NASIR: Yeah, no doubt!
[MUSIC]
NASIR: Let’s get to our question of the day.
MATT: Question of the day.
NASIR: On our good Friday.
MATT: Here we are.
“I own a restaurant. Can I help get to the new minimum wage by giving them a one-dollar food credit each hour?” This is in Stockton, California.
It’s speaking to the minimum wage that’s going to get bumped up here in a couple of weeks in California from $8.00 to $9.00 an hour.
NASIR: Yeah. This is not as easy a question as I thought it was.
My first instinct was like, “Why would you do that?” Now, I’m wondering what kind of food they have and does it depend upon what it is because, if it’s really good food, then it’s like, “Okay, maybe that’s okay.”
Well, the general rule is that, for minimum wage laws, you have to pay in cash or something easily convertible to, but there is this weird exception that you can credit them in order to get to that minimum wage for lodging or food that is actually provided for. But what can’t be provided for is you can’t give them a coupon or a gift certificate for food. That’s a little bit different.
In this case, this person is giving them a food credit for each hour. I think there’s a better way to handle that. What do you think?
MATT: I don’t like the way that they’re handling it and just go with what you just said.
The employee still has to agree to it so they have to voluntarily accept this and definitely need to get it in writing, too. I want to make that little caveat. But, in this situation, it just seems like it’s so much easier just to pay them the extra one dollar an hour and then you can build the food credit in that way. If you still want to have it in there, you can still have that. Just pay them the full amount and deal with the food aspect of it later.
NASIR: I think we have to give a disclaimer on this one because this is general advice and this is a very specific question, obviously. I would work with an attorney to review California law again and also try to tailor your objectives in a way that is a little bit less… how do I put it? Ambiguous as to which way it goes. In other words, I think your objective is kind of up to interpretation a little bit. I think there’s a way to do it in a way that would reach the same objective but have it a little more clear.
MATT: That’s a good attorney answer.
NASIR: I know.
MATT: You should just consult an attorney.
NASIR: Yeah, I just don’t want to give the questioner a wrong impression.
MATT: No, it’s true.
NASIR: Obviously, we have that disclaimer every time but specifically in this case, too.
MATT: Yeah. Hopefully, people listen through the entire podcast episode because that’s when all the disclaimers that we have come into play so, if they don’t listen to the whole thing, I guess they never hear them.
NASIR: Yeah. Well, they better listen to it because embedded within that disclaimer has little tidbits about other things and little surprises, if you listen carefully.
MATT: Yeah. It’s like the credits of the Iron Man movies. People stick around just to see that because there’s always some little sneak peeks into what’s in the future. It’s usually just Samuel L. Jackson doing something but it’s still worth waiting around for.
NASIR: That’s the same case, we have Samuel L. Jackson usually at the end. You know, sometimes, yes; sometimes, no. You’ll have to listen to it and see if it goes well this time.
MATT: We should just insert some Samuel L. Jackson yelling in the middle of our disclaimer this week.
NASIR: Ah, we’ll have to get the rights to do that, but we’ll try our best.
MATT: I’m not going to try and do an impression but…
NASIR: I was waiting for that.
All right. Well, that’s our Friday episode.
Thank you for joining us.
MATT: Yeah, keep it sound and keep it smart.

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