Commercial Insurance Newsletter

Spring 2012

2012-03-30T15:18:00.000-07:00

Implementing a return to work program for your company will result in benefits to both your company and your employees. The following is a brief outline of some of the benefits of an effectively implemented return to work program:

Benefits for Employers

• Minimizes accident costs thus keeping workers compensation costs as low as possible

• Reduces employee turnover and costs for hiring and training new employees

• Reduces the number of lost work days and increases overall productivity

• Reduces legal disputes

• Improves employee morale

• Promotes a positive company image

Benefits for Employees

• Less time away from work makes it easier to return to work

• Recovery of injured employees is expedited when they can focus on being productive rather than focus on their injury

• Helps employee maintain income and financial stability

• Employees are able to resume their normal activities sooner and maintain their job skills

• Employees are able to learn new transferable skills

• Helps employees maintain a positive sense of self worth and improves morale

Regardless of the number of individuals you employ, your company can benefit from a return to work program. While preventing injuries is the best way to control your workers compensation costs, when injuries occur you need a plan in place to ensure your employee gets prompt medical care and then is able to return to work as soon as medically possible. A return to work program can help you accomplish these goals. The following is a brief outline of how you can implement your own return to work program:

Establish a return to work team. It is recommended that your workers compensation coordinator serve as the coordinator of the return to work team. A well-rounded team should include members who represent each of the following groups: human resources, safety personnel, management, employees, medical staff, and the employee union.

Identify transitional productive work. Once you have completed a job assessment for each position, you can begin identifying transitional tasks that are appropriate for employees who have been injured and are unable to perform their regular duties for a period of time. Creating modified positions will allow employees to return to work sooner than they would have been able to otherwise. Ask employees and supervisors to assist in identifying tasks that are not physically demanding but that are safe, meaningful, and productive.

Create a written return to work program. Involve employees in the development of the program and communicate the final plan to the entire company and any others involved in ensuring its ultimate success. Your written program should include the following:

• Policy statement identifying your return to work philosophy and your commitment to the program. The policy statement should also stress the importance of injury prevention with safe operations, your goal to ensure immediate medical care, and the desire to return injured employees to work as soon as possible.

• Procedures your employees, supervisors, and return to work coordinator will need to employ from the time an employee is injured through the time they return back to work.

• Identification of responsibilities of the injured employee, the supervisor, the health care provider, your return to work coordinator, and your insurance company.

Conduct a job assessment. List each position at your company and identify the activities required by that position. Also list the physical demands and environmental conditions of each activity. One of the benefits of the job assessment is that it will help you identify unsafe aspects of the job so you can make modifications to prevent future injuries.

Create a written offer for employment and a written transitional productive work agreement. If you have an employee who is injured and who needs to return to work with modified duties, make a bona fide (valid) offer of employment and provide a written agreement that includes a description of their transitional work duties and an acknowledgement of their doctor’s medical restrictions

A well-planned and thoroughly-implemented return to work program can be very beneficial to both the company and the injured employee. If you have any questions about implementing a return to work program, please contact your Leavitt Group advisor.

Winter 2011

2011-12-29T14:37:00.002-08:00

In the year ahead businesses will face new and sophisticated cyber threats working to capture and exploit user data. The Georgia Tech Information Security Center and the Georgia Tech Research Institute recently reported three specific threats to watch for in the coming year:

Stolen Cyber Data Used for Marketing – The market for stolen cyber data will continue to evolve as private user information is captured and shared by social media platforms and sold directly to legitimate business channels for activities such as lead-generation and marketing.

Mobile Web-based Attacks – Expect increased attacks aimed specifically against mobile web browsers as the tension between usability and security, along with device constraints (including small screen size), make it difficult to solve mobile web browser security flaws.

Search Poisoning – Attackers will increasingly use SEO (search engine optimization) techniques to optimize malicious links among search results so that users are more likely to click on a URL because it ranks highly on Google or other search engines.

As cyber attacks continue to show up with unprecedented sophistication and reach, the ability to compromise and control millions of computers continues to be a serious threat. It is increasingly important to understand possible threats, make sure your policy includes cyberinsurance, and have a plan in place to recover if your data is compromised.

Have you ever thought about how much personal information your business stores from your clients and/or employees?

Do you acquire credit card information, driver’s license numbers, social security numbers, or medical record information? Where do you keep that information and how safe is it? How much would you have to pay your client or employee if their information was taken from your records and used to destroy their identity or access their financial assets?

The companies that are most at risk for a serious data breach are those who handle and store some of their clients’ and/or employees’ most personal information. These companies can include financial institutions, accounting offices, law offices, medical offices, municipalities, retail or restaurant organizations, and technology companies.

Studies show that your business will likely experience some type of attack, either electronic or paper, within the next 12 months. “Seventy-three percent of small-to-mid-sized companies experienced a cyber attack in 2010, and 30 percent of those attacks were extremely effective.”¹

In most states, if your business is responsible for the breached information, then your business is required by law to pay for three years of identity theft protection for each individual whose information was breached—no matter whether the breach resulted in damages or not. For reference purposes, the average cost per compromised record for this service is approximately $200 per year. This means your company could be responsible for approximately $600 per client and/or employee whose information is breached. You can visit www.databreachcalculator.com for a free risk analysis of your company’s data breach exposure.

After this cost, your business is still liable for financial damages, fines, restoring credit worthiness, and restoring your good name and reputation. Luckily, there is insurance coverage available to help.

A cyber/privacy liability insurance policy can mitigate this exposure on your behalf. Cyber/privacy liability coverage is not found, or may be very limited, under your current policies. This specific policy can cover your cyber/privacy liability exposure, your data breach notification costs, damage to your hardware/software systems (including web sites and intellectual data), public relations cost reimbursement, and business interruption coverage for the time that your business can not operate due to the breach.

If your company collects personal information and does not have this policy, please contact your Leavitt Group insurance consultant for more details.

¹ McConville, Jim. “Smaller Private Companies At Greater Risk of Cyber Attack.” Financial Advisor. December 12, 2011.
http://www.fa-mag.com/fa-news/9382-smaller-private-companies-at-greater-risk-of-cyber-attack-.html

² Ponemon Institute & Symantec Corporation. “Data Breach Risk Calculator.” https://databreachcalculator.com/

Fall 2011

2011-09-30T13:09:00.000-07:00

While allowing employees to work from home has added benefits for both the employee and the employer, there are workers compensation exposures related to at-home workers. As an employer, it is essential that you take a proactive approach to keep your employees safe and avoid potential liabilities.

First, consider which candidates are best suited to work from home. Employees who have been with the company for a period of time long enough to prove their work ethic and trustworthiness are better candidates for at-home work than new employees.
After approving an employee to work from home, assist in setting up their workspace to ensure a safe work area. Be sure to include an ergonomically-correct office arrangement. Once the workspace is set up, it is a good idea to take several photographs for proof that a safe area was established, should a workers compensation claim later arise.
Provide a computer program for tracking time at work and time off. If a workers compensation claim is made, an accurate tracking of the employee’s actual work time will aid in determining if an incident actually occurred during working hours.

To ensure your risk management is keeping pace with the changing trends in your workplace, contact your Leavitt Group insurance consultant.

Employers who supply their employees with company cell phones, laptops, BlackBerries, iPads and other portable devices could be in for a surprise if an employee is injured while using the device when off site or off the clock.

Insurance claims professionals say that claims made by workers who are injured, and the relation of the injury to their employment is unclear, are on the rise. The increasing use of mobile devices is challenging traditional notions of work-related injuries.

A few decades ago, when an employee’s work environment was easily defined by a physical location and time period, compensability was more easily determined. With mobile devices, people can, and increasingly do, work from many locations. Even if management does not encourage the behavior, they could still have some responsibility if it is happening, just as it might in harassment situations.

An employer can reduce the risk in offering these devices to employees by collaborating with their human resources department to establish a “best practices for mobile devices” policy. This policy should be communicated clearly and enforced with all employees.

Here are some sample statements you may use when creating a best practices for mobile devices policy:

Mobile devices are not to be used while driving a moving vehicle or operating moving machinery, as such distractions can cause accidents and injuries.

All messaging, including typing or reading text messages or e-mail while operating any vehicle (employer-owned, rented, or personal) when conducting company business is prohibited.

Any violations of this policy will subject employees to disciplinary action, up to and including termination of employment.

If you have questions about any of the coverages discussed in this article, please contact your Leavitt Group agent.

Summer 2011

2011-06-30T14:00:00.000-07:00

Business Interruption Insurance

Business interruption insurance makes it possible for you to quickly resume business activities in the event of a disaster. There are typically three types of business interruption insurance.

Business Income Coverage. This coverage will compensate you for lost income if your business suffers a property loss or damage from a covered peril such as windstorm or fire. Your business will be covered, after a brief time deductible, until restoration of the lost or damaged property is complete. In addition, the policy will cover operating expenses, such as utilities, that continue even when your business has temporarily halted activity.

Extra Expense Coverage. During the restoration period following a loss, you may incur extra expenses to keep your business operating. Extra expense coverage reimburses your company for a reasonable sum of money that it spends over and above the normal operating expenses to avoid having to shut down during the restoration period. Extra expense coverage may also cover payroll to key employees so that you may retain them as employees.

Contingent Business Interruption Insurance. This policy will reimburse your company for its expenses and lost profits when it can’t operate because a disaster has struck a supplier or manufacturer. For example, the massive earthquake and tsunami that hit Japan in March 2011 led to supply chain disruptions around the world. Companies who were affected and who had contingent business interruption insurance were able to use this coverage to reimburse expenses and lost profits during the shipment delays.

Note: Damage due to flood is excluded from most property policies.

Is Your Business Properly Insured?
Four Questions to Determine How Well You Are Covered

Part of risk management involves not only having an insurance policy in place but making sure you have the right elements included in your policy. In addition, a regular review of your policy with your insurance agent will help ensure your policy is kept up-to-date with the changes in your business and industry. The following is an outline of four elements of your insurance policy that we recommend you review regularly with your agent.

A building and personal property (BPP) policy covers the building, your business personal property, and the personal property of others. Categories covered include furniture, fixtures, merchandise, personal property owned by you and used in your business, tenant improvements (if leasing/renting), etc. To ensure you have adequate coverage for all of these assets, the value of your property needs to be accurately reported and updated annually to reflect inflation and other changes in costs.

To protect the property of your employees, you will need personal effects and property of others coverage added to your policy. This coverage extends up to $2,500 worth of business personal property coverage to your personal effects as well as that which belongs to your officers, partners, and employees. This coverage also protects the personal property of others in your care, custody, or control. Limits higher than $2,500 can be purchased if needed for this policy.

Business interruption insurance is essential to ensuring a quick resumption of your business after a disaster. Without this coverage, your business may have to close down completely while the premises are being repaired, which may leave you susceptible to losing out to the competition. The policy limits you choose for this coverage should be sufficient to cover your company for more than a few days. There are three types of business interruption insurance: business income coverage, extra expense coverage, contingent business interruption insurance.

A commercial general liability (CGL) policy protects your business assets against many common liability claims, including bodily injury, property damage, personal injury (including slander or libel), and advertising injury (damage from slander or false advertising). A CGL policy will cover the cost of defending or settling claims. The two major forms of liability insurance policies are occurrence and claims made. An occurrence policy covers you for the policy amount you had in place when the actual injury occurred, not when the claim was made. A claims-made policy covers you for the policy amount you have in place when the claim is made.

The coverages discussed herein are for illustrative purposes only. The terms and conditions of your specific policy may differ from those described. Please consult the provisions of your policy for the terms, conditions, and exclusions that apply to your coverage.

Spring 2011

2011-03-31T14:00:00.000-07:00

Commercial auto insurance differs greatly from personal auto insurance. The type of coverage you need depends on a variety of factors. Here are a few tips to help determine if you need commercial auto insurance:

Whose name is the vehicle registered under? If it is registered in the name of the business, you need commercial auto insurance.

How is the vehicle used? If you or your employees use the vehicle for business purposes, then you need a commercial policy. Even personal vehicles may also need commercial auto coverage if they are being frequently used for business purposes. Although your employees’ vehicles are covered by their own personal insurance policies, this coverage will take effect if an employee is involved in an automobile accident with damages that exceed the limits of their own private policy.

If you have employees who drive as part of their job, you should definitely have a written policy regarding cell phone use while driving to reduce your risks and liability. Should one of your employees be involved in an automobile accident, you may incur a workers compensation claim, expenses of hiring and training a replacement if the employee is unable to return to work, and related out-of-pocket expenses for repairing or replacing the vehicle and its contents.

Another substantial economic risk arises if an employee injures someone else in an accident. If an employee caused the accident due to the distraction of a cell phone, you will likely be liable for any injuries or damages caused by the accident. Additionally, if you do not have any policies or guidelines regulating cell phone use while driving, your liability could be even greater.

Understanding applicable state and federal laws pertaining to cell phone use while driving is critical when developing guidelines and a written policy. Here are some sample statements you may choose to include:

Cell phones are not to be used while driving a moving vehicle or operating moving machinery, as such distractions can cause accidents and injuries.

Employees are required to comply with all state and local laws regarding the use of cell phones while driving. If cell phone use is necessary while driving, all employees must use a hands-free device.

All text messaging, including typing or reading text messages, while operating any vehicle (employer-owned, rented, or personal) when conducting company business is prohibited.

Any violations of this policy will subject employees to disciplinary action, up to and including termination of employment.

The safest and most conservative policy would be to prohibit any use of a cell phone while driving. If you feel your employees need to have access to a phone while driving, you should implement policies that still keep usage with certain parameters (e.g. hands-free device). Doing so will lessen the potential liability for both your employees and your company.

Winter 2010

2010-12-31T16:00:00.000-08:00

Developing and Maintaining
An Effective Safety Culture

Focusing efforts on developing and maintaining an effective safety culture can help reduce workplace injuries and accidents and ultimately reduce your workers compensation premium. Here are a few key things you can do to improve your safety culture:

Establish a written safety program. Your safety program should include training on preventing workplace accidents and injuries as well as incentives for maintaining an accident-free environment. Getting commitment from management and employees is key.

Be selective in your hiring process. Choose new hires who share the same safety culture values. Provide accurate job descriptions to job applicants, obtain previous work references, and conduct criminal background checks. Also, conduct a pre-start post-offer drug test and obtain a motor vehicle report (MVR) for new hires.

Reduce human error. Ensure employees know the correct methods and procedures to accomplish their assigned tasks. Require employees to demonstrate skill proficiency before performing a particular task.

Prevent accident recurrences. Investigate and document every injury and near-miss. Identifying why and how the accident occurred and making proper corrections can help prevent future incidents.

There are several factors taken into consideration when calculating a workers compensation premium. It is a good idea to review these items with your insurance agent to ensure you aren’t paying more than you should for workers compensation. The following is a summary of some of the factors used in calculating these premiums and what you can do to ensure your premium is accurate.

Classification Codes
Employers are assigned classification codes based on their industry, and different codes are assigned to employees based on the type of labor in which they engage. These class codes are set by the National Council on Compensation Insurance (NCCI), and they are state specific.

You can affect the amount of premium you pay by conducting an audit of your employee classification codes on an annual basis to ensure accuracy. This can be done by reviewing current employee classification codes and identifying any employees who are not correctly classified. For example, if you have an employee who has moved from a job on the factory floor to the office, this employee may be assigned a less costly classification code to reflect the change in their work responsibilities to a job with less risk of injury. If you need to review a specific class code or request information from the NCCI Scopes Manual, you can call NCCI at 800-NCCI-123, or ask your insurance agent.

Payroll
The premium you pay for workers compensation insurance is generally based on the size of your payroll. If you have downsized your workforce and decreased the size of your payroll recently, these changes need to be communicated to your insurance agent. Making this simple update to your workers compensation records may have a significant effect on the amount of premium you pay going forward.

Claims Experience
The severity, type, and frequency of workers compensation claims you incur has a significant effect on your workers compensation premium. The more severe the claim and the more claims you incur, the higher your premium will be.

You can make a significant impact on your workers compensation premium over time by developing and maintaining a safety culture geared towards preventing accidents and injuries. In addition, regularly review your loss history and look for open claims that have been resolved but never closed. These outstanding claims can add unnecessary costs to your workers compensation premium.

Fall 2010

2010-09-30T15:59:00.000-07:00

With the increasing use of social media in the workplace, companies can take effective steps to manage the risks associated with these activities. Many businesses are finding clever ways to leverage Facebook, LinkedIn, Twitter, and other social networking websites to their advantage. While usage may be beneficial, high on the list of concerns should be the potential for employees posting information that could expose the company to legal liability, leak trade secrets, or damage the reputation of the company.

Although there is not absolute protection from lawsuits, companies that demonstrate a commitment to responsible use of social media are in a better position to defend themselves. The following steps can be very effective:

Create an internal social media business-use policy: Companies should notify employees that use of all forms of electronic communications in ways that are illegal, contrary to the company’s interests, or in violation of antidiscrimination policies will not be tolerated. This includes blogging, texting, and instant messaging.

Communicate the policy to employees and enforce it: Employees should be trained to follow the electronic-use policy and be aware that their activities are being monitored. Communicate established consequences for policy violations, and follow through when issues arise.

Consider cyber insurance: This new form of business insurance is designed to pay for losses associated with data compromise as well as media or web content liability. More information on cyber insurance is included below.

Source: Travelers.com

Your standard business owners policy may provide some coverage for damage to your physical computer equipment if caused by a covered loss. However, you may need additional insurance protection to insure your company’s operating data, your website, and private customer data. Cyber insurance can provide coverage for repairs, lost business, and lawsuits over loss of confidential data.

Types of cyber insurance coverage:

Privacy and security liability:
If private employee or customer data is compromised due to faults in your systems or theft by hackers or disgruntled employees, you will be held liable. This coverage protects you from liability exposures associated with this risk.

Crisis management:
This coverage generally provides reimbursement for expenses incurred to restore lost or corrupted data and to get your systems back up and running. The policy may also cover expenses for the use of consultants, public relations, and advertising to rebuild your reputation and restore consumer confidence after an incident.

Business interruption, denial of service attack, and lost income:
If your service provider (i.e. web host) has downtime due to a cyber attack, has a glitch, or goes out of business, this coverage will help cover resulting losses you may incur. This can include lost revenue, costs for restoring valuable data, and costs to repair systems.

Cyber extortion:
If you receive a threat of attack on your computer system or website coupled with a demand for money to avert or stop the attack, this is cyber extortion. Coverage for this risk will generally cover the settlement and the cost of hiring a security firm to track down the extortionist.

Media or web content liability:
This coverage protects you from claims of libel, slander, copyright, and trademark infringement for content, slogans, and photos on your website. It also protects you from liability exposures associated with banner ads on your website representing other businesses.

Here are some things you can do on your own to minimize the risk of data loss:

Back up your data regularly
Use off-site storage
Encrypt your data
Run a virus scan regularly
Use an uninterruptible power supply (UPS)
Keep your computer in a safe environment
Have a recovery plan in place

Source: Small Business Review

Summer 2010

2010-06-30T16:39:00.000-07:00

The loss of a key employee can be a major blow to any business if that person is the primary contact for customers and suppliers, or if he or she fills important management roles of the business. Loss of the key person may also decrease efficiencies in running the business and result in a loss of capital.

Losses caused by the death of a key employee are insurable through coverage called key employee life. Here are a few things you should know about this coverage:

Key employee life pays a death benefit to the company if the key employee dies.
The policies are normally owned by the company; thus the company pays the premiums and is the beneficiary.
Key employee life policies will compensate the business against covered losses that result from that person’s death or disability.
The amount and cost of insurance needed for a particular business depends on the situation as well as the age, health, and role of the key employee.

If you are interested in this coverage for your company, please contact us for a consultation.

Employee Benefits Update:

Directors and officers liability insurance (D&O) can protect directors and officers of a firm from liability due to negligent acts, omissions, or misleading statements that result in lawsuits against the company. This coverage is an effective tool in helping mitigate liabilities for an organization as well as protecting the personal assets of the directors and officers.

What you should know about D&O coverage:

Coverage for directors and officers is only for non-bodily injury claims. This includes claims of financial loss resulting from mismanagement.
D&O coverage typically excludes intentional dishonest acts as well as property damage claims.
D&O policies may be broadened to include coverage for employment practices liability.
There are no “standard” D&O policies. Many versions are available, thus it is essential to review the policy wordings and endorsements with professional advisors, including legal counsel, to ensure the coverage you are acquiring is suitable for your needs.

There are a variety of D&O coverages available,
including the following:

Corporate reimbursement coverage indemnifies directors and officers of an organization for claims resulting from their acts on behalf of the organization. The corporate charter or by-laws usually state the obligation for the corporate organization to indemnify its directors and officers. In some cases it is mandated by state statute.

Side-A coverage provides D&O coverage for personal liability when directors and officers are not indemnified by the firm. This coverage is needed when the corporation is either financially unable to indemnify its directors and officers or when it is prohibited from doing so.

Entity coverage is designed to cover the organization directly in addition to its directors and officers.

Source: www.irmi.com

Spring 2010

2010-03-31T12:38:00.000-07:00

Have you considered how you would manage if a fire or other disaster damaged your business premises? To quickly resume business after a disaster, business interruption insurance is key. Here are a few things you should know about this essential coverage:

Business interruption typically covers loss of income and continued business operation expenses.

There is generally a 48-hour waiting period after the loss before coverage is effective

Think about the amount of time you will need to get your business up and running again, and consult with your agent to make sure your limits are sufficient.

Source: www.iii.org

In the event of a natural or man-made disaster, have a plan in place to execute the recovery of your business. Here are some tips for developing a plan:

• Client retention plan
Decide on a communications strategy to prevent loss of customers. Post notices outside your premises; contact clients by phone, e-mail, or regular mail; place a notice in local newspapers.

• Back-up resources
Consider the resources you may need during an emergency. Do you need a back-up source of power? Do you have a back-up communications system?

• Business-to-business coordination
Even if your business escapes the physical damage of a disaster, your operations may suffer significant losses due to the inability of suppliers to deliver goods or services, or from a reduction in customers. Businesses should communicate with their suppliers and markets (especially if they are selling to a business as a supplier) about their disaster preparedness and recovery plans so that everyone is prepared.

• Protect your building
Conduct regular inspections of your business property to identify potential hazards. Look for signs of defective electrical wiring, leaky gas connections, and structural defects. By identifying hazards ahead of time and making necessary repairs, you can reduce the threat of injury or death and minimize property damage in the event of a disaster.

• Continued business activity
Identify critical business activities and the resources needed to support them. If you cannot afford to shut down your operations, even temporarily, determine what you would require to run the business at another location.

For guidance on generating your business recovery plan, check out the Business Recovery Checklist at www.fema.gov.

Source: www.iii.org

WINTER 2009

2009-12-31T00:00:00.000-08:00

Warning Signs
of Workers Compensation Fraud

Employee or claimant fraud accounts for about 20 percent of all workers compensation claims paid.* Protect your company from costly claims by recognizing the following signs of insurance fraud:

There is no witnesses of the accident or it happened outside normal working hours.

It is difficult or impossible to reach the employee.

The accident wasn’t reported until days after it happened.

The employee changes his or her story about the accident.

The employee shows no interest in returning to work even when accommodations to the injury are made.

The employee frequently changes physicians.

The employee has a past history of workers compensation claims.

In times of economic uncertainty, many employers face the possibility of workforce reductions. Though increases in layoffs could lead to an increase in workers compensation costs, there are preventative measures that can be taken. These include preparation prior to the layoff, appropriate assistance for affected employees, and proper management of records. Careful planning and handling of workforce reductions can help alleviate the problems that may arise and assist employees with the transition to new employment.

Preparation Prior to the Layoff

Be familiar with state unemployment insurance laws, including the levels and durations of benefits.
Investigate state programs available to employees that may offset workers compensation costs.
Meet with your insurance broker to review pending claims and identify those that might become problems.
Backup employee records and store them in secure locations. Claim records should be updated with the latest available information.
Create a video record of conditions in the building prior to the layoff to easily demonstrate to a court what the work environment was like.
Use exit interviews to document employees’ physical condition at the time of termination.

Appropriate Assistance for Affected Employees

When layoffs occur, the company should handle them as sensitively as possible. Losing a job is a traumatic experience for anyone. Reduce the chances that a worker will seek retribution by helping affected employees:

Offer resume preparation or outplacement services.
Offer employee assistance programs for those who need emotional support.
If the company can afford the expense, offer severance payments to the employees in return for their written agreement to forego any future claims against the company.
Make sure contingency plans are in place should any of the employees become violent at the time of the layoff or later

Proper Record Management

Ask the broker and the insurance company to coordinate claims handling through one office and one senior claims adjuster.
Request that the insurer assign the defense of all cases to one law firm.
Relevant records should be made easily accessible to the attorneys and any medical specialists the firm may hire. Relevant records include videos, employee files, job descriptions, and exit questionnaires.
Identify key personnel who may be available to testify regarding job requirements and conditions. Have a list of their names and contact information available for the attorneys.

FALL 2009

2009-09-29T10:16:00.000-07:00

What is EPLI and What Does it Cover?

Employment Practices Liability Insurance, known as EPLI, can protect your business against claims made by potential hires, employees currently on your payroll, and terminated employees.

An EPLI policy will protect your company against claims of:

Wrongful termination
Employment-related emotional distress and invasion of privacy
Defamation
Retaliatory/constructive discharge
Sexual harassment and discrimination
Workplace torts such as slander

EPLI coverage generally includes the cost to defend against the charges plus any damages you are ordered to pay. Depending on your business needs, it might make sense to purchase EPLI coverage as part of your company officers’ liability insurance since company officials can be named in lawsuits against the business.

Risky Business
Why You Need Employment Practices Liability Insurance

Workplace discrimination claims can affect businesses of all types. For example:

Thirteen current or former computer company employees claimed employment discrimination on the basis of race and national origin. Employees claimed they were treated unequally and subjected to a hostile work environment. Amount of settlement: $635,000 (salary increases, enhanced promotional activities).

Eight employees filed a class action suit alleging sex discrimination by their employer in the handling of wages, promotions, pregnancy leaves, and other conditions of employment. Amount of settlement: $600,000 (plus $5 million in legal fees).

A senior regional attorney sued a securities dealer claiming age discrimination and retaliation. He claimed he was unfairly terminated for advice he gave to a co-worker regarding his employment rights. Amount of verdict: $443,000.

Up to half of all businesses will face a workplace discrimination lawsuit at some point. Is your business prepared?

Protect Your Business
As an employer, you do everything you can to treat your employees fairly. However, you can be held liable for the actions of your employees or even vendors and customers. And with new employment-related regulations being added to the books frequently, it can be difficult to understand exactly what you are expected to do.

It is important to make sure you remain in compliance with laws governing treatment of employees. But there is an added layer of protection you can obtain: Employment Practices Liability Insurance, or EPLI.

SUMMER 2009

2009-06-29T09:15:00.000-07:00

Are all your eggs in one basket?

While diversity may be the way to go when investing, it is not necessarily the most practical course of action when buying commercial property and casualty insurance.

The following is from firms who have combined multiple lines of insurance with one commercial carrier:
• 89 percent of the firms who saw savings were able to cut the overall cost of their risk management program by a minimum of 4 percent.
• Approximately 35 percent realized savings of 7 to 10 percent.

By combining all of your commercial insurance with one company, you receive a more cost-effective policy than if you were to purchase each product individually from different companies. Not only is it a matter of cost savings and convenience, but having your coverage with one company can also simplify the claims process should a loss occur. So, unlike an investment portfolio where it is better to spread the risk around, your commercial insurance policies are most effective when you keep them all in the same place. If some of your policies are not combined, work with your independent agent to evaluate all of your exposures and the most effective company for your business insurance needs.

Taking a Closer Look at Business Insurance

There are many hazards businesses face that aren’t covered under a typical insurance policy. However, you can offset significant financial losses by securing extra protection through comprehensive business insurance. Consider the following coverages:

Company vehicle contents:
Do you operate a business with employees on the road making service calls to customers? Chances are there is valuable equipment contained in the company vehicles. A typical auto insurance policy would probably not cover the contents of a company vehicle if that valuable equipment is lost or stolen.

Tenant property improvement insurance:
Do you rent space to conduct your business? Have you made interior improvements to accommodate your business needs? Many property insurance policies don’t include the value of the improvements made by a tenant to the existing structure. If you’ve invested in improvements, it’s worth considering the coverage to protect your investment.

Home-based business equipment:
An increasing number of people are working from home at least part time, even if they maintain an office or site elsewhere. Homeowner’s insurance generally does not cover business equipment. If you have expensive business equipment at home, you may want to consider purchasing additional protection.

Key person insurance:
In many companies, the knowledge and skills of a single person or a top few are absolutely essential to the enterprise’s success. Key person insurance can help a company recover if an essential employee dies or becomes disabled for a lengthy time. The coverage can provide needed funds that allow the company to continue operating during a search for a successor or until the key employee returns.

Business interruption insurance:
Remember the series of hurricanes that hit Florida? The wild fires that damaged cities and towns in California? The flooding that disrupted life in the Midwest? These types of disasters can bring businesses to a standstill for weeks or even months. Business interruption insurance can provide a way to get back on your feet.

SPRING 2009

2009-03-30T15:44:00.000-07:00

FIVE Ways to Control Workers Compensation Costs

Workers compensation is essential to protect your employees and your company. To sharpen your company’s competitive edge, it’s important to control costs. By taking a fresh look at your company’s approach to safety, hiring, classification, and claims management, you may find new ways to keep costs under control. Here are some tips:

1. Thoroughly train new employees:
Nearly a third of workers compensation claims result from accidents with new employees. Evaluate your orientation program for ways to improve new employee training.

2. Make safety a top priority:
The best way to keep costs down is to not incur claims. Create a safety culture throughout the company, and engage employees directly in the effort. Solicit ideas from employees on how to create a safer workplace.

3. Pre-screen employees:
An investment in pre-employment drug screening can save a significant amount in claims down the road. Statistics show that workers who are substance abusers are far more likely to have an on-the-job accident.

4. Manage claims proactively:
Monitor an injured worker’s condition so they can return to work as quickly as possible. If an injured employee rejoins your workforce on light duty, you can reduce the claim amount.

5. Make sure employees are classified properly:
If employees are misclassified, you may not have the coverage you need, which can result in large audits.

Lower Workers Compensation Claims by Reducing Work-Related Stress

Proactive steps which employers can take to reduce stress in their work force include:

Improve employee communications - Make your workers feel involved by getting their feedback on management plans or decisions.

Give employees a sense of control – Give your employees as much independence in the operation of their jobs as is reasonable and responsible.

Keep employees in the loop – Eliminate the stress of uncertainty by telling your employees what changes are going on and how they may be affected.

Don’t label employees – It’s healthy for employees to vent their concerns and frustrations as opposed to bottling up the stress because they fear retaliation, so let them express themselves freely.

Don’t overload your employees – Do whatever possible to reduce excessive workloads that exceed an employee’s abilities. Spread the load.

Create realistic work schedules – Try to be flexible with your work schedules by considering the demands imposed on employees outside the job. Be as creative as possible and show you care. Be approachable.

Define their roles – Ensure employees clearly understand their responsibilities and what roles they play.

Give meaning to your employees’ skills – Try to design jobs so they stimulate and give meaning to your employees. Treat each employee as an asset and offer opportunities for advancement and cross-training. Try to incorporate all the skills they have to offer.

Socialize – Give your employees a venue in which they can interact socially, such as company picnics, sports or other activities.

Work-related stress affects the morale of your company. Stressed employees file more work-related claims resulting from physical injuries, health and mental conditions. You can reduce workers compensation claims simply by taking action and implementing positive stress-relieving measures.