Employers Vulnerable to Associational Discrimination Claims

Most employers are aware of the employee protections found in Title VII of the Civil Rights Act of 1964. Employers may not discriminate against employees on the basis of race, color, religion, sex or national origin. Also, they may not retaliate against employees who have protested against an illegal employment practice or who participated in an investigation or other activities against the employer for an illegal practice.

Further, recent court decisions have applied Title VII’s protections to an employee’s association with another person whose characteristics fall under those protections. The U.S. Supreme Court held in 2006 that employers cannot discriminate against someone closely related to or associated with a person who is exercising protections under Title VII. Two federal courts earlier this year ruled that employers violated the law by discriminating based on association. One allegedly fired a white basketball coach because his wife was African-American; the other allegedly fired an employee whose coworker’s fiancé filed a complaint with the Equal Employment Opportunity Commission.

All employers are vulnerable to these types of accusations, even those who strive to obey the law. Employment practices liability insurance (EPLI) policies cover many types of losses resulting from employee claims. How will they respond to association discrimination claims?

EPLI policies vary somewhat from one insurance company to another, but most provide coverage for acts such as discrimination, wrongful termination, harassment, retaliation, and inappropriate employment conduct. A typical policy covers discrimination against an employee for termination of the employment relationship, demotion, failure to promote, denial of an employment benefit or other adverse action based on a number of characteristics such as color, race, sex, ethnicity, age and religion. It also covers retaliation claims if the employee engaged in a protected activity, the employee suffered an adverse action, and the protected activity caused the adverse action. Because they specifically apply to employees who have these characteristics or who perform protected activities, these policy provisions do not appear to cover actions against employees because of their association with others.

However, the policies usually also cover “inappropriate employment conduct.” Among the acts that may fall within this category are coercion, wrongful demotion, wrongful discipline, retaliatory treatment, and others. The definition of “inappropriate employment conduct” will be different from one policy to another. One insurance company may cover association discrimination while another may not. As such, employers should discuss specific terms of coverage with their insurance agent.

The policies might cover the employer, but not the employee alleged to have committed the act, if a court determines the employee deliberately acted illegally or with intent to harm the other employee. For example, if a court ruled that a supervisor was acting maliciously when he fired an employee for marrying someone of a different race, the insurance might pay for the employer’s defense and liability but not for that of the supervisor.

In this era where job cuts and lawsuits are common, employers face a real exposure to actions against them for the decisions they make. Lawsuits can be costly even if they are groundless; the costs of defending them can mount rapidly. EPLI provided by a financially solid company is an important part of every employer’s risk management program.

EPLI, coupled with a well-executed loss prevention program, will help any employer survive employee accusations.

Tips for Evaluating Contractor’s All Risk Policies

Construction is a high risk industry. Personal injuries and property damage occur frequently, and these events ultimately cost the contractor money. Many times such claims could be covered under a Contractor’s All Risk (CAR) policy.

CAR policies, commonly referred to as Course of Construction or Builder’s Risk policies, insure against physical loss or property damage to works, plant, equipment and materials during the course of construction. Such policies can be complicated so contractors should take care to ensure that any coverage adequately covers the risks of the construction project to be undertaken. Many contractors can be caught short by failing to evaluate their potential liability risks in relation to the policy they are considering.

Here are some important rules to evaluate CAR policies:

* Conduct an insurance audit with a risk manager or broker to determine potential liability and any risk not covered by your current policy.
* Consult with your broker because many insurers can customize the coverage to match the needs of the project. The insurer needs time to do this effectively, so don’t wait till the last minute.
* Take note of exclusions because while most are expressly stated, others can be implied and can radically limit your protection. One frequently implied exclusion is consequential loss relating to loss of profits and expenses as an indirect result of the cause of the claim. Naturally occurring events such as deterioration due to mildew, rust, or obsolescence may also be deemed as implied exclusions.
* Confirm there are no unusual limitations on the measure of damages. The method in which your insurance carrier determines damages can significantly affect your bottom line.
* Carefully consider the period of coverage as it normally only extends to when the contractor is on site and ceases when the client takes possession. Ensure there is extended coverage should problems develop later on.
* Technological changes using business information technology opens many contactors to new risks if they incorporate design management in the construction project. Additionally, construction companies which use BIM also have to consider potential losses due to hacking or data corruption that would not likely be covered under a CAR policy.
* Review the excesses and deductibles to be applied by your insurer to determine if they are reasonable.
* Fully document your damages with the aid of an experienced consultant, as CAR carriers will strive to reduce the cost of damages. Costs stemming from prolongation of the claim may be restricted to maximum excess limitations.
* Use a legal consultant especially when preparing a major claim. They can guide you through any potential red tape and aid in negotiating a proper settlement.

Do You Have Coverage If You Damage a Customer’s Property?

A plumbing contractor’s employee is soldering two lengths of pipe together when a fellow employee asks him to assist with another task for a moment. The first employee lays the soldering torch on a ceiling joist, forgetting that it is still hot. While he is away, the joist begins to smolder, then small licks of flame form and ignite combustible material in the ceiling. By the time someone notices, fire is consuming the ceiling. Firefighters’ efforts to extinguish the blaze cause water damage to portions of the building and walls near the fire’s starting point suffer smoke damage.

The building owner will most likely hold the contractor responsible for the cost of repairing the damage. In turn, the contractor will look to his general liability insurance policy to cover that cost. Will the insurance company pay for the repairs?

The Insurance Services Office’s Commercial General Liability Coverage Form states, “This insurance does not apply to…’property damage’ to…(t)hat particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations…” What does this mean, and how does it apply to an incident like this one? What does the form mean by the phrase, “that particular part”? Several courts have weighed in on this question.

A Tennessee court in 1975 ruled against an electrical contractor whose employee, while installing circuit breakers in a switchboard, caused a short circuit that destroyed the entire switchboard. The court said that the employee was performing operations on the switchboard, not just the individual circuit, and therefore liability coverage did not apply. Similarly, a Massachusetts court ruled against a cleaning contractor in 1989. The contractor was cleaning the bottom of an underground oil storage tank when an explosion occurred, destroying the entire tank. The contractor argued that the insurance should cover all of the damage except that to the bottom of the tank, but the court ruled that the entire tank was “that particular part” on which the contractor was performing operations.

Conversely, a Minnesota court granted coverage for a contractor that had been hired to clear trees and brush from a construction site but that also cut down trees on an adjoining property. The court said that, while the liability policy would not cover damage to property the contractor had been hired to work on, it did cover damage to the property of a third party. A New York court ruled in 1974 that a liability policy covered damage that occurred after the contractor had completed operations.

The courts have not established firm rules about what constitutes “that particular part” of property on which a contractor is performing operations. Case law will vary from one state to another. Because of this, contractors should discuss the exposure with their insurance agents. To reduce the chances of an uninsured loss occurring, an agent may recommend the purchase of a builders risk or installation floater policy. These policies cover property that the contractor is installing on a construction site while it’s in storage, in transit, on the job site and during installation. They also usually cover property of others for which the contractor may be liable. Unlike the general liability policy, there are no standard versions of these policies, so contractors must review them carefully and ask their agents questions about anything that is unclear.

The law of averages suggests that most contractors will accidentally damage a customer’s property at some point. Now is the time to make sure that there will be no insurance surprises when it happens.

Primary and Noncontributory: What Does It Mean?

Construction contracts often require a subcontractor’s general liability insurance policy to name the owner or general contractor as an additional insured on a “primary and noncontributory” basis. This seemingly simple requirement can cause a lot of difficulty and may hamper the sub’s ability to start the project. The International Risk Management Institute recommends that risk managers not include this requirement in contracts. Insurance agents can add wording to a certificate of insurance only if the insurance company approves it. Insurance companies tend to resist adding this language to their policies and certificates. Why are the words “primary and noncontributory” such a problem?

In liability insurance claims, when two policies cover the same loss, one usually applies on a primary basis and the other on an excess basis. This means that one will pay first (the primary policy), and the other will pay only if the primary policy either does not cover the loss at all or if the amount of insurance is not enough to pay for the entire loss. For example, if the primary policy has a limit of $1,000,000 each occurrence and the amount of the loss is $1,500,000, the primary will pay its limit of $1,000,000 and the other policy, which applies on an excess basis, pays the remaining $500,000.

If both the general contractor and the subcontractor have bought modern editions of the Insurance Services Office’s Commercial General Liability Coverage Form, the subcontractor’s policy is automatically primary. The form’s wording makes the insured’s coverage excess over any policy that has added the insured as an additional insured by endorsement. Therefore, the “primary” part of the requirement is a minor issue.

The “noncontributory” requirement is more of a problem. Most contracts do not define the term’s meaning, and most insurance policies and endorsements do not include it at all. The GC may believe it means that its policy will not pay even on excess basis; if the sub’s limit of insurance is not large enough to cover the loss, the GC may expect the sub to pay the remainder out of pocket.

The standard additional insured endorsement to a general liability policy covers the additional insured with respect to liability for injury or damage caused at least in part by the sub’s acts or omissions. It also covers liability for acts or omissions of those working for the sub. Coverage lasts as long as the sub has ongoing operations for the additional insured. It does not say anything about the additional insured’s coverage being noncontributory. This is the problem: It is not standard insurance industry practice to cover additional insureds on a noncontributory basis. Insurance companies are reluctant to change that, as they want the additional insured’s coverage to contribute toward paying for the loss. A GC has less incentive to prevent losses when it knows that its own insurance will not be needed.

A contractor who runs into this requirement should notify his insurance agent immediately and ask the insurance company to provide the coverage. If it won’t, he must notify the GC and negotiate alternative terms in order to avoid breaching the contract. The GC may agree to accept the standard endorsement with a promise not to reduce its coverage. He should also consider asking the agent to seek this coverage at the next policy renewal. Most importantly, he must understand what the contract requires and ask questions about provisions that are unclear. No one wants to find out after an insured loss that he must pay part of it with his own money.

Five Ways to Control Workers’ Comp Costs

Most businesses are required by law to provide workers’ compensation insurance. It protects employees, providing income and medical care if they’re injured on the job. It also protects employers; the liability portion provides coverage for lawsuits filed as a result of a work-related injury.

As an employer, the amount you pay for workers’ compensation coverage varies according to your industry and claim history. Workers’ compensation insurance for companies that engage in office-based work is generally much less expensive than insurance for industries like construction or trucking.

Regardless of your industry, there are proactive steps you can take to keep workers’ compensation costs under control. Here are some tips:

Thoroughly train new employees: Surveys show that nearly a third of workers’ compensation claims result from accidents involving newly hired employees. Take a look at your orientation program and see if you can improve overall safety by beefing up new employee training.

Make safety a top priority: The best way to keep costs down is to not incur claims in the first place. Create a safety culture throughout the company, and engage employees directly in the effort. For example, you could establish safety councils and solicit ideas from employees on how to create a safer workplace.

Pre-screen employees: Another preventive action you can take is to make sure you hire the right employees in the first place. Statistics show that workers who are substance abusers are far more likely to have an on-the-job accident. An investment in pre-employment drug screening can save a significant amount in claims down the road.

Manage claims proactively: When an employee is injured, make sure you keep tabs on the worker’s condition and plan for their return to work as quickly as possible. In some cases, injured employees can rejoin your workforce on light duty, which can reduce the amount of the claim.

Make sure employees are classified properly: There are hundreds of classification codes used to determine the appropriate level of workers’ compensation coverage. If employees are misclassified, you may not have the coverage you need, and misclassifications can result in fines.

Workers’ compensation is essential to protect your employees ― and your company. To sharpen your company’s competitive edge, it’s important to control costs. Take 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.

Driving Risk: When Employees Run Business Errands

Have you ever sent an employee out to pick up needed supplies? Offered to buy lunch for the crew and asked an employee to pick it up? Unless you only send employees who are insured to drive your company vehicles, you may be putting your business at risk. Your business may also incur liability if you travel on company business and have an accident in a rented car while traveling to meet a client or for other business-related purposes.

Why would your business be at risk? Because if there is an accident that causes damage to a third party and the driver’s insurance doesn’t cover the full costs, your company may be sued to recover the excess amount. Employees who use their personal cars are generally required by law to have insurance. But unless you hire them as drivers, you probably have no idea how much insurance coverage employees actually carry ― or even if they have insurance at all.

If you’re traveling on company business in a rental car, you’re probably covered by your personal insurance or by a policy purchased through the rental agency. But if you’re in an accident and cause damage that exceeds the amount of personal coverage you have, an attorney for the injured party would almost certainly seek damages from your company.

The Solution

The good news is that there’s a simple and relatively inexpensive solution: a non-owned auto insurance policy. This type of policy protects your business if an employee gets in an accident and causes damage while running a company errand. It also protects your company if you cause damage in an accident while driving a rental car on company business.

Keep in mind that non-owned auto insurance generally doesn’t cover drivers ― its purpose is to protect the organization. Non-owned auto insurance generally does not function as primary insurance; it is designed as excess liability protection. In other words, if your employee causes damage in an accident while driving a personal car on company business, the employee’s insurance would generally pay first. But if the liability exceeds the amount of the employee’s coverage, non-owned auto insurance would protect your business from being responsible for damage costs not covered by the employee’s coverage.

The Bottom Line

Liability claims caused by vehicular damage can run into the millions of dollars. Your business could be at risk if an employee has an accident while traveling on company business. Your company could also be at risk if you or an employee has an accident while driving a rental car on business. Non-owner auto insurance can provide peace of mind ― and vital protection.

Traffic Accidents May Be Biggest Risk to Employee Safety

The International Association of Industrial Accident Boards and Commissions (IAIABC) discovered that not only are highway vehicles the biggest risk of serious injury to employees, but they are also associated with some of the most costly workers’ compensation claims.

The researchers analyzed injury data from the National Council on Compensation Insurance (NCCI) and the National Institute on Occupational Safety and Health (NIOSH). Their findings revealed that only work in construction, agriculture, and certain natural resource industries caused more employee injuries than vehicle accidents. The data also showed that traffic accidents were the source of a large portion of the total number of serious disabilities and fatalities.

The study categorized injuries by industry and occupation. As an occupational class, truck drivers were found to have a substantially high risk of fatalities; however, they had significantly fewer non-serious injuries. The reverse was true for passenger cars. They were found to have fewer fatalities, but almost double the number of non-serious injuries. The researchers concluded that the size and weight of trucks protect occupants in slower-moving collisions with other vehicles. However, because trucks are prone to jackknifing and overturning, truck drivers are more likely to experience a fatal injury. Besides the high fatality rates, trucker drivers were discovered to have workers’ compensation claims of longer duration and higher average cost.

Other occupational categories that generated a high number of expensive workers’ compensation claims as a result of vehicle accidents were salespersons, messengers, and collectors. It is important to realize that these were actual claims, and not rates of injury per worker. This means that jobs that have traditionally been considered unlikely to cause worker injury carry more risk than originally believed.

The data also indicated that employees involved in vehicle accidents had a significantly higher rate of permanent total disability and workers’ compensation death claims than all other types of claims combined. The average severity of temporary total disability, permanent total disability, and fatality was greater for vehicle claims than for non-vehicle claims.

The predominant cause of injury in workers’ compensation claims resulting from vehicle accidents was neck sprain and neck pain, which accounted for 15 percent of all vehicle claims. However, these claims made up less than two percent of the overall number of workers’ compensation claims.

When examining the cost of vehicle accidents to employers, workers’ compensation payouts represent only a small part of the expense. The Network of Employers for Traffic Safety studied the combined cost of motor vehicle accidents to employers in 2000. The researchers found that medical expenses amounted to $7.7 billion, sick leave, life and disability insurance benefits totaled another $8.6 billion, while workers’ compensation claims costs approximately $2 billion for employers.

Vicarious Liability: Your Employees Could Cost You!

Respondeat superior” is a Latin phrase that translates “let the master answer.” This is legal jargon relating to the breadth of the employer’s responsibility for the actions of his employees. Literally, and in basic terms, any injurious or wrongful act of an employee within the course and scope of his employment creates liability for the employer (the master). This is commonly known as “vicarious liability.”

An employer’s liability for injury or damage caused by employees is considered “vicarious” because the act was not committed by the employer, but by individuals for whom the employer is responsible. Just like a parent is responsible for the actions of a child, even if the parent had no knowledge of what the child was doing, so too is the employer responsible for the employee’s actions.

When crews are spread over several job sites, the employer loses some direct control over the actions of the dispersed employees; however, he is not relieved of his responsibility for the actions or inactions of these workers. The “master” will be required to financially stand up and answer for any injury or damage caused, even though he may not have been aware of those actions.

Within the framework of construction operations, the employer is obviously responsible for any work done incorrectly or poorly. For example, if an employee of a plumbing contractor does not properly cement or solder a pipe, leading to severe water damage from a break at the connection point, the employer is expected to pay for the damages.

Beyond simply being vicariously liable, the employer has the potential to be accused of “negligent entrustment.” Negligent entrustment can be asserted when an employer allows an unqualified person to use a dangerous instrumentality. Construction sites teem with dangerous instrumentalities; from items as simple as nail guns and power saws, to man lifts, grading equipment, and trenching equipment. Employers owe a duty to the employee, others on the job site, and even the general public to affirm an employee’s ability to safely and correctly operate equipment necessary for their job.

To avoid breaching this duty and allegations of negligent entrustment, the employer must test employees to confirm they are adequately trained to operate the equipment they are expected to use. This can be accomplished by observing the employee’s use of the equipment and correcting misuse. Observation and training should be done by a highly trained supervisor or by the supplier. The training must include detailed safety instructions and “what-if” scenarios. Once the employee has been “cleared” to use the equipment, continued observation is necessary to ensure the employee doesn’t become careless.

A common response to recommended training and testing is, “We don’t have time for that.” This may be true, but if you don’t have time to train, do you have time to go to court? Also, do you have the funds to pay the damages? Successful negligent entrustment suits often involve punitive damages that could drastically increase the cost for that particular incident.

Vicarious liability and charges of negligent entrustment aren’t limited to your employees. You may also face liability for the actions of entities or individuals to whom you sub-contract work. Making sure you hire qualified and properly insured subcontractors is of vital importance.

You, as the saying goes, are your employee’s keeper. Not due to lack of trust, but because you are ultimately responsible for the results and consequences of their actions. Choosing, training, and monitoring your employees and subcontractors will allow you to avoid or at least minimize many of the potential problems.

Limiting Your Liability for Summer Employees

According to the U.S. Department of Labor, 2.3 million workers between the ages of 16-24 years of age were hired for summer employment. On average, one of these summer employees will be injured on the job every five seconds. Most of these work related injuries are both needless and costly to the employer.

The three main causes for the majority of these injuries are due to inexperience, lack of training and inadequate supervision. There are a number of proactive steps that employers can take to limit their exposure and reduce their liability.

Steps to Take Beforehand

Business owners would be wise to develop safe working practices for summer help. Here are some simple but practical steps you can employ to reduce your costs from job related injuries this summer:

  • Ask yourself what hazards the summer worker will be exposed to, including any pertinent risks outside the immediate working area.
  • Consider carefully the personnel who are to be involved in the training process and ensure they are well versed in the training procedures.
  • Always try to assign an experienced worker as a supervisor and ensure they keep a watchful eye on the summer worker over the first several days.
  • Make sure that any equipment to be used is examined and operational beforehand. Ensure that all legally required equipment safety guards are in place.

Take the Time to Give an Adequate Safety Orientation

Even before on the job training begins, give all your new staff a safety orientation. Here are some of the most important points to cover:

  • Appoint someone to act as a safety coordinator to explain the applicable federal and state safety laws.
  • The safety representative should stress and encourage new employees to ask questions about any aspect of the job they don’t understand.
  • Ensure that your summer workers do not hesitate to report unsafe conditions or hazards and to whom.
  • Stress that newly hired workers should not engage in any job activity where they haven’t been properly trained. Emphasize that they must always think safety first.
  • Inform new workers not to leave there work area unless they’ve been told to do so. Describe and show the locations of first aid kits, emergency alarms and exits, fire extinguishers, emergency alarms, eyewash stations, and how and where to obtain medical help.
  • Instruct all workers using hazardous equipment or processes to always use required protective gear such as gloves, hearing protectors, safety visors, and hard hat or safety shoes.

Provide Thorough Training

By taking the time to train your summer workers with good training techniques, you can dramatically reduce the risk of injuries. Here are few points to keep in mind:

  • Assign an experienced worker to give the worker their full attention until fully trained.
  • Provide detailed instructions on how to perform all aspects of the job and encourage them to ask questions.
  • Demonstrate how each task should be performed and repeat it until understood. Observe how the worker performs the task and correct any mistakes.
  • Teach the worker how to properly lift heavy items, use ladders safely and how to avoid injury from activities involving repetitive actions.
  • Monitor the worker’s progress in the first few days as this is the time when most injuries occur.

By being proactive in orienting your summer workers, you can greatly reduce your liability exposure to work related injuries. Training takes a little time but it’s time well spent.

Identifying Environmental Exposures Is Critical to Managing Risk

Environmental claims are often unpredictable and despite the fact that associated liabilities can easily cripple a business, most contractors underestimate their potential magnitude. Without sufficient insurance protection, the consequences of such claims can range from costly business interruption to bodily injury and/or property damage lawsuits. The best way to account for this unpredictability is to manage the risks that can lead to environmental claims.

The only way to develop an effective risk management strategy is by conducting a thorough site pollution assessment to determine the various levels of exposure.

Time is a critical factor in this type of assessment. Exposures can exist from both past and future pollution release events. Of the two, past exposures can be more easily qualified and managed. Commonly referred to as “legacy exposures,” these previous events are the known/unknown issues associated with the history of a site. Some typical legacy exposures include:

  • ·         Accumulations of small discharges
  • ·         Inappropriate storage and handling practices
  • ·         Poor structural integrity
  • ·         Use of pesticides and herbicides

Legacy exposures may be currently dormant, but can re-emerge during site development, or operation expansion. They can even remain inactive on the property being developed while surfacing in neighboring properties. Such exposures could also be former release events that posed minimal risk initially, and required little remediation. However, now they require additional cleanup. Or the added remediation of these events could also be the result of a change in regulatory standards.

The second level of exposure results from the possible future occurrence of a pollution release event. Known as “operational exposures,” these risks can trigger a major cleanup effort, as well as bodily injury and property damage loss. These events can be sudden and easily identified, or they can be the outcome of a gradual process that has gone unnoticed.

The preferred way to manage these exposures is by transferring risk via an environmental insurance policy.  Environmental insurance should be part of the risk management strategy of real estate owners, facility operators, and any other party with a financial interest in a site. An environmental policy can be written to cover only legacy concerns for transactions where there is a risk transfer from seller to buyer. It can also be written to cover only operational risks for a leased location, or if the insured feels that the site history does not warrant coverage for legacy events. Additionally, policies can also be crafted to provide full coverage for a single site or multiple locations.

When Is It Sexual Harassment and What Can Be Done to Prevent It?

Most employers know that sexual harassment is a form of discrimination that violates Title VII of the Civil Rights Act of 1964. The legal definition of sexual harassment is “unwelcome verbal, visual, or physical conduct of a sexual nature that is severe or pervasive and affects working conditions or creates a hostile work environment.”

While this definition may seem clear cut, the issues surrounding what constitutes sexual harassment are not. One of the most difficult aspects of examining a sexual harassment charge is deciding whether or not the conduct in question was truly harassment, and not just an innocent exchange between consenting adults.

There are two scenarios, that when they exist, are a definitive sign of sexual harassment:

1. Hostile environment – This is the most prevalent type. A work environment becomes a hostile environment when an employee is made so uncomfortable by a pattern of repeated, unwanted behavior that they cannot perform their job.

2. Quid pro quo – This Latin phrase literally means “this for that.” Quid pro quo occurs when a supervisor, or other person acting with authority, withholds, demands, or promises a benefit if the employee submits to unwelcome sexual conduct.

Keep in mind when trying to determine if an employee’s/supervisor’s actions constitute harassment; you have to view the conduct in question from the victim’s perspective. The victim determines whether the conduct is severe and pervasive enough to create a hostile environment. The harasser’s intentions do not play a role in the matter.

If there are recurring incidences of employees making sexual harassment charges in your organization, it is probably not a question of supervisors being unaware of inappropriate behavior. Rather it’s a matter of supervisors not taking action when they see inappropriate behavior. Failure to act is far more common than you may think. It is usually the result of a supervisor feeling unsure as to whether the behavior was really unacceptable, or not knowing the proper way to confront the parties involved.

The best way to remove these hindrances is to:

· Establish a sexual harassment policy that sets forth what actions are acceptable, what actions are considered sexually threatening, and what steps will be taken if anyone is found to be in violation of company policy. Once you have clearly defined your policy, document it and provide a copy to each employee. All employees should sign a disclosure that says that not only have they read the policy and understood it, but they also understand the consequences for failing to uphold it.

· Provide training – Supervisors should be given appropriate training in the correct manner of investigating a charge of sexual harassment including the types of questions to ask, how to file a written report, and to whom the report should be given.

It is also a good idea to be proactive in avoiding formal confrontations by periodically walking around and talking with employees. Many times an informal conversation can tip you off to a potential powder keg.

Top Tips to Streamline the Premium Audit Process

Are you due for a workers’ compensation premium audit? Audits are how insurance rates are determined, and it’s possible that an audit will uncover information that can actually save you money. In any case, it pays to be prepared. These five tips can help you get ready.

  1. Let your broker know when there are changes in your staffing, payroll or areas of operation. This is important not just at audit time but all the time. Your rates are based on variable rating information, including the number of employees, job classifications, the states in which you operate, etc. Updated information results in more accurate premium assessments.
  2. Get your records ready. Your auditor will need to see records such as federal and state tax returns, ledgers, checkbooks, contracts and employee or contractor tax documents. If you prepare your records in advance, you’ll speed up the audit process.
  3. Make sure you break out various types of compensation in your records. For example, to set your premium, your broker considers pay but not contributions to employee benefits packages and other perks, so it’s important to make sure your records are clear on the various types of compensation. Also make sure overtime pay is clearly defined since it’s classified as regular pay for workers’ compensation insurance purposes.
  4. Ensure that contractors have their own insurance. This is important not only from an audit standpoint but from a liability prospective as well. If an uninsured contractor has an accident while performing work on your behalf, you can be held liable. If an audit identifies contractors for whom you don’t have certificates of coverage, you can be charged for their premiums.
  5. Remain on hand to answer questions. As your auditor reviews your material, he or she may have questions or need additional data. If you are available to provide answers, your audit will be completed more quickly.

By following these tips, you’ll be more prepared for your workers’ compensation premium audit. A fast, efficient audit process can save time for both you and your auditor, so it pays to be prepared.

Returning Employees to Work Has Legal Implications

When making the decision to return an injured employee to work, there are several significant legal issues that must be considered as a result of both state and federal law.

The first consideration is your state’s workers’ compensation laws. While a common objective of workers’ compensation laws is to facilitate the injured worker in returning to a productive job, not all states approach this goal in the same manner.

Your state’s approach probably falls into one of the following three categories:

  • States that provide for a specific number of weeks of rehabilitation and a limited amount for training for the injured worker. After training is complete, the worker is considered rehabilitated. This training component also limits the employer’s liability to find another job for the claimant.
  • States that are considered defined benefit states. A worker is paid for his temporary total disability. If disability reaches a predetermined percentage of body loss, however, the employer can issue a lump-sum payment and close the case, whether the worker can return to work or not. Rehabilitation is a minor part of this approach.
  • States that use loss of earning power as qualification for benefits. Once a worker is injured, his workers’ compensation benefits will continue for life unless he is proven to have an earning power. In these states, the employer at the time of injury must offer a job to the injured employee if one is available within the employee’s physical restrictions. If this is not possible, the law requires that rehabilitation efforts begin.

The Americans with Disabilities Act (ADA) also presents certain legal considerations concerning the manner in which an injured employee is returned to work. The first consideration is regarding the collection and maintenance of the injured employee’s medical information.

The ADA requires employers to collect this information to determine how to accommodate an employee’s disability and whether the employee is capably of performing a specific job. However, the ADA also mandates that employers:

  • Treat this information as a confidential medical record.
  • Maintain this information on separate forms and keep the forms in separate files.
  • Not use this information for any purpose that is inconsistent with the ADA.

There are also specific rules regarding the disclosure of such information. Supervisors and managers may be informed about necessary restrictions and accommodations arising from the disability. In addition, first aid and safety personnel can be informed if the employee’s condition may require emergency treatment.

Another key consideration under the ADA is whether or not the returning employee is eligible for a particular job. The law says that if an employee can perform the essential parts of a job, they are eligible, even if certain minor aspects of the job cannot be performed. Employers are required to make reasonable accommodations as necessary so that the employee can perform the job. This is what is commonly referred to as a “light-duty” assignment.

Decisions regarding necessary accommodations must be accomplished through a joint process involving the employer, employee, and the employee’s doctor. A company refusing to make reasonable accommodations is at risk for a lawsuit. A worker who refuses reasonable light-duty work risks having their benefits or employment terminated.

Control Workers’ Comp Costs by Lowering Your Experience Modifier

If you are looking for ways to keep your workers’ compensation insurance costs under control, it’s a good idea to take a look at your experience modifier. In fact, tackling your experience modifier is generally a far more effective method of lowering your costs than shopping around for cheaper workers’ compensation coverage. That’s because the experience modifier is used to calculate your individual rate.

However, many employers don’t fully understand how experience modifiers work. They don’t completely understand how lowering it can help them drastically reduce workers’ compensation costs. Let’s take a closer look.

What is an experience modifier?

The experience modifier is a formula insurance companies use to predict losses that an employer is likely to incur. To arrive at the experience modifier, the insurance company considers losses over a three-year period in history, not including the current policy period. It takes into account not only amounts actually paid as claims but also estimates of future payments for medical treatments or compensation that will be paid to make up for lost wages.

Your experience modifier compares your actual losses with the expected losses for employers operating similarly sized companies in your state and industry. If your experience modifier is 1.00, that means your losses match the average rate. A modifier that is higher than 1.00 reflects higher losses, while a modifier less than 1.00 means lower than expected losses.

Your experience modifier is used to calculate your workers’ compensation insurance premiums, so the lower your modifier, the less you’ll pay. Let’s take a look at ways to lower your experience modifier.

Toward a lower experience modifier

Here are a few tips on lowering your experience modifier:

Create a safer work environment. Since your experience modifier is derived from your workers’ compensation claims history over a three-year period, the most obvious first step is to create a safer work environment. A workplace focus on safety is a great way to improve morale and help keep costs down. Some companies form safety committees to find new ways to reduce workplace injuries and to provide training that helps employees stay safe.

Return employees to work as soon as possible. Another excellent way to keep costs down is to consider a return-to-work program for injured employees. Remember, workers’ compensation claims involve not only medical bills but also claims for lost wages. In many cases, injured employees who are not yet able to return to their former jobs can come back to perform light duty jobs while they complete their recovery. This helps lower claims costs. It’s a good idea to work closely with physicians who specialize in workplace injuries since they can more efficiently treat your employees and may have more experience authorizing returns to work for light duty assignments.

Hire the right people. Another long-term strategy for lowering your experience modifier is to implement good hiring practices. For example, you may want to consider a candidate background check and drug screening program. Employees who use drugs are far more likely to be injured on the job, lowering morale and driving up your costs. It’s always a good idea to be selective about whom you hire, and the likelihood of future on-the-job injuries is one more factor to consider.

The bottom line

When workers’ compensation insurance prices rise, it’s tempting for employers to shop around for new coverage. But the fact is, employers themselves control a major factor in determining rates: the experience modifier. Take control of your workers’ compensation costs by taking steps to create a safer work environment, return employees to work and hire the right people. Not only will you improve operations and employee morale, you’ll save money too.

Psychosocial Factors in Returning to Work

We all know that persistent pain from work-related injuries affects an employee’s attitude about returning to work. Unfortunately, the psychological ramifications of chronic pain can also result in prolonged legal action, increasing legal fees, large settlements, and ultimately, failure of the employee to return to work. So, how can we prevent chronic pain from escalating workers’ compensation costs?

In a study titled Integrating Psychosocial and Behavioral Interventions to Achieve Optimal Rehabilitation Outcomes that appeared in the December 2005 issue of the Journal of Occupational Rehabilitation, researchers studied the psychological factors that impede an injured worker in returning to work:

  • Obsession – The persistence of the pain becomes so overwhelming that it is the only thing the employee thinks about.
  • Fear – The employee fears the possibility of becoming re-injured, which increases their current pain. As a result, the possibility of another injury and resulting disability cripples the employee psychologically and causes them to put off returning to work.
  • Perception – When an injured worker has been on disability leave for an extended period, they may feel that co-workers believe they are faking their pain. This causes uneasiness about returning to work and facing co-workers.
  • Self-fulfillment – If an employee believes they are not physically capable of returning to work because of the severity of their pain, this can lead to a failed transition back to the workplace.

In addition to internal factors, researchers noted that there are external psychosocial issues that can impact the injured employee’s desire to return to work.

  • Co-worker support – When injured employees feel there is a lack of social support to help them transition back, they delay returning to work.
  • Job stress – Employees who believe that the stress level at work will intensify their physical pain tend to remain on disability.
  • Workplace attitudes toward disability – Injured employees who feel that the general attitude about disability is that it is a way to “milk the system” sometimes delay returning.

The researchers concluded that understanding the significance of the internal and external psychosocial factors on the employee’s successful transition back into the workplace is critical to the design of return to work programs. First-line supervisors should be trained to detect if an employee is experiencing any of the psychosocial risk factors, as well as how to eliminate or lessen the impact of those risk factors.

Proper Treatment of Injured Employees Is an Important Element of Successful Return-to-Work Programs

In a study titled It Pays To Be Nice: Employer-Worker Relationships and the Management of Back Pain Claims, published in the February 2007 edition of The Journal of Occupational and Environmental Medicine, Richard J. Butler PhD; William G. Johnson PhD; and Pierre Cote DC PhD discovered that workers’ satisfaction with their employer’s treatment of their disability claim is more important in explaining successful return-to-work outcomes than satisfaction with health care providers or expectations about recovery. The researchers added that dissatisfied workers have worse return-to-work outcomes because they are more likely to have lost time claims and multiple instances of joblessness.

The study found that the 64 percent of workers polled who were satisfied with their employer’s response had a medical claim only, while the 56 percent polled who expressed dissatisfaction had lost time claims in addition to the medical claims. For those workers who do have at least one lost time claim there is a lower likelihood of frequent injury-related absences. Only 32 percent of those satisfied with their employer’s response had multiple episodes of injury related absences, as opposed to 58 percent of those dissatisfied with their employer’s response who had multiple absences.

Maintaining a proper attitude toward injured workers is often a Catch-22 in most organizations. On the one hand, efforts to retain a skilled workforce are important because they give workers a greater sense of security, which is typically met with greater commitment to the success of the organization. However, there are concerns about how productivity is affected by reintegrating workers who are not yet fully recovered. That concern can result in instances where injured workers are treated with suspicion, and the validity of their claims questioned.

The pressure created by an injured worker on productivity and workflow is immediate. Although maintaining a good relationship with the injured employee will ultimately benefit the company, it can be difficult to keep this long-term goal in mind with the imminent demands of production looming. What usually happens is that the company ends up conveying to the injured worker that maximizing profits takes priority over their well-being.

This type of response on the part of their employers can alienate injured workers, and typically results in the worker extending the duration of the absence, or having more frequent reoccurrences. The overall outcome is increased workers’ compensation costs, not to mention the costs to train a new employee.

To combat the problem of alienation, organizations need to train first line supervisors in the empathetic treatment of injured workers. Supervisors need to learn how to express to the injured worker how much they are missed without making it seem as though their absence is only regarded for its economic impact. If the worker truly feels that they are needed in the workplace because they are a vital part of the team, and not because someone else has to cover for them, they will be motivated to return as soon as possible. The best way to give the injured worker this sense of belonging is through frequent expressions of sincere regard and regular communication that keeps them in the loop. If the return-to-work program incorporates these two elements, it will accomplish the goal of reducing the probability of lengthy lost time.

Risky Business: Why You Need Employment Practices Liability Insurance

Running a company can be a risky business. According to the Department of Labor, the amount workers received from employers due to discrimination claims rose nearly 78% between 2001 and 2006. A total of more than $51 million dollars was awarded to employees who pursued claims in federal court.

You may have seen news stories about huge jury awards in workplace discrimination claims. It happens every day, and every business is vulnerable. Here are just a few examples:

·   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.

All businesses are at risk from issues related to employment practices. It can come up during hiring situations if you don’t hire someone who then assumes you were discriminating. It can happen if you terminate an employee who then decides he or she was treated unfairly. Employment-related lawsuits are filed every single day, and up to half of all businesses will face a lawsuit at some point. Is your business prepared?

How can you 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 other 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’s important to make sure you remain in compliance with laws governing treatment of employees. But there’s an added layer of protection you can obtain: employment practices liability insurance, or EPLI.

What EPLI covers

Employment practices liability insurance can protect your business against claims made by potential hires, employees currently on your payroll and terminated employees. With a good EPLI policy, your company is protected 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.

Learn more about EPLI

Your business insurance agent can answer your questions about EPLI and recommend the coverage that is right for you. Your agent can also discuss how employment-related lawsuits can affect your business by assessing the risk typically associated with your industry.

Remember, employment-related claims can affect businesses of all types. Even if you are just starting out, you could be the subject of a discrimination suit if someone you interview but fail to hire feels that he or she was treated unfairly. And even if you do everything right and comply with all federal, state and local regulations, you can still be held liable for the actions of your employees, vendors or customers. EPLI can provide much-needed protection – and welcome peace of mind.

Be Proactive to Minimize Risk of Employment-Related Lawsuits

If you own a business, the last thing you want to face is a lawsuit filed by a current or former employee. In addition to the obvious financial risk involved in defending a case, a lawsuit can result in lower employee morale and a damaged reputation in the community. Even if you win your case, you’ll lose time and money in the process.

For these and many other reasons, it’s a good idea to be proactive about avoiding employment-related lawsuits. How do you do it? A good approach is to familiarize yourself with situations that can prompt employees to file suit. When you understand the common legal pitfalls, you’ll be in a better position to avoid them and protect your business.

Understanding why employees sue

If you’re like most employers, you try to treat your employees fairly. But complicated situations can arise. And remember, your perceptions may not match your employees’. Here are some issues that can result in employment-related litigation:

  • Employees feel they have no voice: If you provide employees with a way to express opinions or address problems, you’ll generally have more motivated employees and may also reduce exposure to lawsuits.
  • Employees aren’t in the loop: If your business is going through changes, it’s a good idea to keep employees in the loop. Otherwise, their expectations may not match future business plans, which can result in hard feelings.
  • Managers don’t understand regulations: There are hundreds of employment-related regulations governing the relationship between employers and employees. Make sure you understand them and abide by them.
  • Employees are dissatisfied: When employees are unhappy, they aren’t as productive, and they may also be more likely to resort to litigation to express their unhappiness. Good morale can reduce exposure to litigation and improve business performance.

Avoiding situations that may create a lawsuit

Even employers with the best intentions can make mistakes that result in legal action. There are many regulations that can lead to legal pitfalls, especially in the areas of hiring, managing and firing employees. Employment-related regulations are not only numerous, they change from time to time, so keeping up with them can be challenging, but it’s vitally important. Here are some of the situations you should be aware of as an employer:

  • Promotion opportunities: Be sensitive to employee perceptions when you reward good performance or hold employees accountable for short-comings. If a court finds you created barriers to advancement for a protected class of employees, you could be held liable.
  • Compensation issues: Employee wage and hour regulations can be complex. Make sure you understand them and follow them to the letter. If you’re unsure, it’s a good idea to seek expert advice.
  • Harassment and discrimination: Employers have a responsibility to ensure a harassment and discrimination-free work environment. A sound harassment and discrimination prevention policy is essential.
  • Accommodation issues: Employees or potential hires who are disabled or who have accommodation needs due to religion are a protected class. It’s important to understand the regulations around accommodation.
  • Leaves of absence: Employers in certain locations and those who employee more than a specific number of employees should make sure they comply with state, local and federal regulations on leaves of absence.

How you can reduce legal exposure for your business

We’ve reviewed why employees might sue and some of the reasons employers get into trouble. The next step is to formulate a strategy to reduce risk for your business. A good first step is to formalize a method to address conflicts. If you have an employee handbook, outlining a way to address problems at work as a policy is a good idea. Another effective step is to implement harassment and discrimination prevention policies and outline how incidents will be addressed.

Taking steps to reduce your exposure to employment-related lawsuits takes some time and effort, but in the long run, it’s worth the effort. Not only will these steps help you stay out of court, you’ll improve morale at your company.

Protecting Your Business from Employee Identity Theft

Your business could face big problems if one of your employees becomes a victim of identity theft. That’s an alarming fact considering the rapid growth of this costly white-collar crime.

How does identity theft among your employees affect your business? One of the provisions of the Fair and Accurate Credit Transactions Act is that an employer whose action (or lack of action) results in the theft of an employee’s information can be sued. As an employer, you should keep in mind that the workplace is the biggest source of identity theft.

Businesses should be concerned with more than just the lawsuits associated with employee identity theft. Reoccurring identity thefts lead to negative publicity – which can impact sales and significantly damage employee recruiting and retention efforts.

How can you protect your employees and your business? There are two things you should seriously consider: Offer identity theft coverage as an employee benefit, and tell your employees what they can do to reduce their chances of becoming a victim.

What does identity theft coverage give employees?

  • Insurance coverage: To help them get back on their feet after they’ve been a victim.
  • Credit monitoring: That alerts them when unusual credit changes take place.
  • Computer protection: Such as anti-spyware and wireless security.
  • Protection of personal information: Such as assistance with opting out of marketing databases, as well as tracking data in Social Security databases and financial databases.

What can you tell your employees about protecting themselves from identity theft? Start with the following checklist of do’s and don’ts.

Identity theft prevention do’s

  • Always shred sensitive information rather than just throwing it in the trash. (This is wise advice whether you’re at home or at work.) Things to shred include any confidential information – like credit card pre-approvals, credit card receipts, bank statements, etc.
  • Review your credit report regularly. Take the time to make sure it’s accurate. It’s also important to carefully check your bank statements every month.
  • It may seem like a hassle, but it’s a smart idea to have your financial mail deposited in a post office box rather than in your home mailbox.
  • Remove the mail from your mailbox as soon as possible to afford less opportunity for someone to steal it. Also, be sure to pinpoint when all your bills are supposed to arrive.
  • As elementary as it may sound, it’s important to do whatever it takes to keep your personal identification numbers (PINs) secret.

Identity theft prevention don’ts

  • ·  Obviously, you should never give personal information to anyone without a good reason for having it.
  • ·  Never carry your Social Security card or passport in your purse or wallet, and never keep them in their vehicle. Remember that thieves are very interested in your private information – just as they’re interested in your tangible valuables.
  • ·  Never put your address or driver’s license number on a credit card receipt.
  • ·  Never put your Social Security number or phone number on your personal checks.
  • ·  Never carry credit cards you don’t plan to use.

By helping employees keep their vital personal information from falling into the wrong hands, you’re doing your part to look after their financial health – and protect your business from a growing risk. Identity theft coverage as an employee benefit not only helps employees stay safer, it makes your business a more attractive place to work.

U R @ RISK for Employee’s Online Activities

Did you know your business is liable for how your employees use the internet while they’re on the job? Many business owners protect themselves by monitoring their employees’ email and internet usage, including instant messaging.

Some employers are reluctant to implement an email and internet oversight policy. But monitoring email communication and web surfing has become an important part of protecting your business.  

Suppose an employee at your business has been emailing inappropriate images or messages around the office, and these images make their way to a co-worker who finds them offensive. If that co-worker chooses to sue for harassment, your company could easily be held liable. Why? Because businesses can be held responsible for their employees’ activities while using company computers.

If your business had a monitoring policy in place that enabled you to review the emails going around the office (as well as your employees’ web surfing), you would have been able to take measures to stop the offensive email before it was sent.

Creating a monitoring program

Here are some useful tips to consider as you formulate your internet monitoring and usage policy:

·   Implement policies about what employees are allowed to send: Tell your employees never to write – or even forward – any material that could
be considered obscene, hateful, defamatory, offensive, harassing or otherwise inappropriate. This includes racist or sexist language and/or jokes.

·   Gain control over what can be accessed at your business: You have a right to ban questionable websites at your business. Forbid employees from viewing any sites containing sexually explicit messages or imagery, sites that are violent, or sites containing other content that may be considered inappropriate. Consider installing blocking software to stop access to these sites in the first place.

·    Disallow non-work-related web use while employees are on the job: It’s becoming increasingly common for employees to use the internet at work for non work-related purposes. This trend is only getting worse with the rise of social-networking sites like Facebook. Therefore, unless employees are on a break, it’s a good idea to insist that emails are being sent and web pages are being viewed for business purposes only.

·    Provide separate computers for off-the-clock purposes: Consider setting a few computers aside specifically for employee non-business use. Put them in a common area and allow employees to surf while on their lunch hour. Coupled with an internet monitoring program, this is an effective practice for many companies. (Just remind employees that your monitoring policy also applies to this non-business use.)

·    Communicate your monitoring policy to employees: A common pitfall of implementing an internet and email usage program is that many companies don’t tell employees about their policy. By not telling your employees, you’re actually increasing your exposure to employee lawsuits. Telling them you’ll monitor their email and internet use will help deter improper use.

·    Keep reminding your people about your internet policies: Once your policy has been communicated to employees, remind them about it regularly. It should be included in your company’s employee handbook. You might also want to consider having a reminder on your employees’ log in screen.

When you put effective internet and email policies in place, you’re taking a positive step toward protecting your company. It takes some time and effort, and communication must be ongoing, but it’s worth it to reduce liability exposure for your business.

Make Sure You’re Covered for On-The-Job Injury Claims By Temporary Workers

If you use workers from staffing or leasing agencies to supplement your workforce, how adequately do your current insurance policies protect your company in the event that one of these individuals is injured on the job?

If you’re covered under an Insurance Services Office, Inc. (ISO) commercial general liability (CGL) policy and your workers’ compensation and employers liability policies are written on National Council on Compensation Insurance (NCCI) forms with no additional coverage endorsements, you may not be as protected as you think. You should consider adding the Coverage for Injury to Leased Workers (CG 04 24) endorsement to your CGL policy.

A potential gap in coverage arises from the way the CGL policy defines “temporary” and “leased” workers. A leased worker is a person leased to your company through an agreement with an employee-leasing firm to perform duties related to the operation of your business. A temporary worker is a person furnished to you to fill in for a permanent employee on leave or to meet seasonal or short-term workload conditions. Under the terms of the CGL policy, “employee” includes a leased worker, but does not include a temporary worker. The distinction is important, because the CGL policy’s Exclusion e: employers liability, excludes from coverage bodily injury claims made by an employee of the insured.

Thus, if your CGL policy definitions consider the worker to be an “employee”-even though that worker is provided by a staffing agency-the policy will not cover any bodily injury claims by that worker. If the worker is not specifically substituting for a permanent employee who is on leave, or meeting a seasonal need or short-term workload conditions, the worker is not a “temporary worker” in the eyes of the insurer, and instead is considered your employee for purposes of Exclusion e. To be a “temporary worker,” that individual must have a specific end date to his or her employment with you. A temporary employee who is hired for an indefinite period of time simply does not meet the criteria stated above, and is therefore considered an employee, and subject to Exclusion e if they are injured on the job.

Adding the Coverage for Injury to Leased Workers (CG 04 24) endorsement to your CGL policy will help you fill this coverage gap. This endorsement states that the term “employee” does not include a “leased worker” or “temporary worker,” making the employers liability exclusion of the CGL policy inapplicable to the claims for injuries to a leased or temporary worker.

Another way to protect your company in lawsuits by injured temporary workers is to require the staffing agency that provides such workers to include the Alternate Employer Endorsement (WC 00 03 01 A) on its workers’ compensation and employers liability policy, and specifically schedule your company as the alternate employer. This endorsement will provide you with coverage as an alternate employer in the event the temporary worker files a tort suit.

Without the right coverage in place, on-the-job injuries to temporary workers can present a significant potential liability to your company. Examine your current CGL policy and arrangements with any staffing or leasing firms you use to make sure your company is protected.

Protecting Your Business from Workers’ Comp Fraud

Tempted to hire a private investigator to spy on employees claiming workers’ compensation? You’re not alone. Luckily, covert operations can be avoided by taking a proactive approach to preventing workers’ compensation fraud.

Here are some effective tips for shielding your business.

Watch for red flags

Knowing common signals of workers’ compensation fraud is an important step in protecting your business. Some red flags to watch out for are:

·   There are no witnesses of the accident (or the only witnesses are friends/family members of the injured employee).

·   It is difficult or impossible to reach the employee.

·   The employee changes his or her story about the accident.

·   The accident happened on a Friday afternoon but wasn’t reported until the following week.

·   The accident happened outside of the employee’s normal working hours.

Not all claims that occur under these circumstances are fraudulent, but it may be worth it to take a second look.

Make safety a priority at your business
Creating a safer work environment not only lowers the chance of accidents, it also reduces the opportunity for employees to fake an injury. Your business should frequently conduct safety inspections of all work areas and any equipment. Remove hazards immediately, and be sure to document the repairs you make.

Thoroughly investigate workplace injuries
Take the time to review any surveillance videos of the area where the incident allegedly took place. Also, be sure to interview all witnesses shortly after the accident happens – and take any rumors of dishonesty or fraud seriously.

Hire wisely
People who lie on rГ(c)sumГ(c)s are more likely to lie about workplace injuries. Make it a routine part of your hiring process to conduct background checks on all applicants. And don’t neglect to verify their references and any other information included on their applications and rГ(c)sumГ(c)s.

Clearly communicate your workers’ compensation policies
It’s important to discuss your workers’ compensation policies with all employees. Tell them what to do when an injury occurs, and explain that insurance costs affect the amount of money available for raises and bonuses. Also, make sure you tell your employees that workers’ compensation fraud is a serious crime that will lead to termination and prosecution. Post fraud awareness posters in conspicuous locations explaining what fraud is and what its consequences are.

Implement a return-to-work program
Workers’ compensation fraud is less inviting when employers have transitional duty for injured employees. Make sure your employees know that if they get injured on the job, your business will work with the doctor to help them return to work as soon as possible.

Stay in touch
Don’t lose contact with employees who are off work because of an on-the-job injury. Injured workers who are hard to get a hold of might be committing workers’ compensation fraud. Contact them periodically, and document each contact (whether you were able to reach them or not).

Get signed statements when employees leave
In your exit interviews, obtain signed statements from exiting employees stating that they have or have not had any unreported injuries at work. This will go a long way in discouraging post-termination claims.

Workers’ compensation is a major expense for most businesses, and workers’ compensation fraud makes it more costly for everyone. It pays to take a proactive stance to reduce workers’ compensation fraud at your company.

Reducing the Risk of Workers’ Compensation Claims Begins with the Hiring Process

Workers’ compensation claims can occur in any workplace. While employers understand that solid safety protocol can reduce the incidence of these claims, many don’t realize that steps taken during the hiring process can also have some impact on managing this liability. Not taking the time to thoroughly interview applicants to determine if they are a good fit for the job and the company can result in hiring workers who might create problems later on, like filing too many workers’ compensation claims.

Although federal and state laws prohibit certain questions being asked during the interview process, there are techniques you can use that will help you decide if the applicant might be the type to file problem claims. Begin by reviewing the applicant’s resume prior to the interview. Pay careful attention to gaps in employment history. During the interview, ask the applicant to explain the reasons for these gaps. Also ask the applicant about his or her attendance record during previous jobs.

Follow up with open-ended questions to see what the applicant would do in certain situations, such as resolving conflicts with managers, subordinates or co-workers. Quiz the applicant as to what he or she perceives to be the procedures necessary to effectively perform the essential functions of the applied-for job in your company.

Inform the applicant that all new hires go through a fitness-for-duty physical, which includes questions about medical history. Watch for any signs of discomfort like a change in facial expression or body movement.

Administer a skill and/or personality test to assess competency and work ethic. Whatever screening tools you use, establish reasonable criteria and apply them uniformly for all applicants.

Obtain written consent from the applicant to conduct a complete background check. As part of this:

·   Verify past employment history and follow up with references.

·   Conduct a criminal background check. Use a public records service to uncover any criminal convictions.

·   Check on past job-related injuries, workers’ compensation claims, substance abuse and safety records.

·   Contact the schools and universities listed on the candidate’s job application or resume to verify education and certifications. If the applicant listed having a professional license, call the issuing organization to verify.

·   For candidates whose job duties would include driving a motor vehicle, compare the results of the applicant’s official motor vehicle report with the answers provided on the job application.

If you do extend a job offer, make it conditional, contingent upon the candidate’s ability to perform the functions of the job. You can withdraw a job offer, if in the opinion of a licensed medical doctor, the prospective employee poses a direct threat to their own, or others’, health and safety. However, in determining the suitability of an offered job, make sure you make all reasonable accommodations necessary for those candidates subject to the Americans with Disabilities Act.

Thorough job interviews not only help you to hire the right person for the job…they help you hire the right people for your company.

Avoid Unnecessary Legal Involvement in Workers’ Compensation Claims

The workers’ compensation system was designed to provide a method for efficiently returning injured workers to their jobs as soon as possible. Getting lawyers involved in this process when it isn’t necessary slows it down, makes it far more inefficient, and adds costs.

The best way to avoid the need for legal involvement is for the employer to take an active role in the workers’ compensation process. Here are a few ways to do that:

·   Tie managers’ performance evaluations to their concern for safety. The total quality management approach is to tie safety to a manager’s raise, bonus or promotion. In that way, it become financially advantageous for managers to be safety-conscious and reduce the possibility of workers’ compensation claims.

·   Designate an employee to call injured workers once a week. This helps you troubleshoot problems before they escalate. For example, this call might detect that an injured worker has been receiving collection notices for unpaid medical bills, indicating that the compensation claim may not have been processed properly, and alert you to the need to call your workers’ compensation insurance carrier.

·   Report all injuries. Even if an employee insists that he or she isn’t seriously injured, report the incident to your insurer anyway. There may not be any ramifications from the injury now, but there could be in the coming months. If you don’t report an injury when it happens, the claim could be rejected as fraudulent later on when you do report it. This could cause the employee to hire legal counsel.

·   Monitor the progress of claims. There are many points at which a claim can become bogged down-the employee delays the first doctor’s visit, there’s a lag time in getting a report from doctor, the employee has to wait to see a specialist, etc. These all have negative effects on the progress of the claim. An employer can improve the efficiency of the process by examining injury records, writing down dates and identifying excessive delays. Reducing delays and maintaining continuity in care will keep the process flowing and eliminate the need for the employee to find an attorney to intervene.

·   Don’t alienate employees. Many disgruntled employees file workers’ compensation claims because they feel the company owes them something, or to get even for poor treatment in the workplace. Most of these revenge claims result from conflicts that could have been avoided if a supervisor had spent more time empathizing with employees.

Some workers’ compensation claims will require the involvement of legal professionals, but if you can keep these occurrences to a minimum, you’ll help keep your workers’ compensation costs in check.

D&O Coverage Belongs in Your Company’s Insurance Portfolio

Does your current insurance portfolio adequately protect your company and its most key people against significant financial losses? All companies understand the importance of a general liability policy, for example, to cover customer injuries that occur on the business premises. And every business knows it’s important to protect the business premises and its contents against the risks of fire, flooding, vandalism, etc., through a comprehensive property and casualty policy. But many overlook an entire area of potential liability and loss that can result when claims are made that are based on the actions of its directors and officers.

Directors and officers (D&O) liability insurance protects against financial losses resulting from claims based on allegations of wrongdoing by these individuals when acting in their corporate capacities. Both publicly traded and privately held companies should consider the coverage.

What kinds of claims fall under the scope of such policies? Consider these-

• Claims by shareholders/investors alleging misrepresentations, inadequate disclosures, conflicts of interest, misdealing and mismanagement.

• Claims by competitors alleging bad faith in business dealings, appropriation of trade secrets, and unfair or deceptive trade practices.

• Claims by customers based on dishonesty, sales disputes, and the like.

• Employment practices liability claims, including failure to hire, termination, discrimination and sexual harassment.

• Suits by government agencies, including those involving tax laws, securities laws, labor laws, violation of applicable business regulations, etc.

When claims such as these include allegations of a company’s directors’ or officers’ wrongdoing, that can bring them within the coverage of a D&O policy. For publicly traded companies, in 2006, 49% of claims covered under D&O policies were brought by shareholders, according to a survey by professional services firm Towers Perrin. Think of the well-publicized cases involving corporate giants like Enron and Worldcom, which alleged financial misdealing and cover-ups by corporate officers.

Private companies can also be hit by shareholder lawsuits. These companies do have investors, who can become disgruntled with management decision-making when their investment in the company does not turn out to be as good as expected. Also, the definition of a “security” can be a very broad term. But a key reason these firms need D&O coverage is the increasing number of employment practices lawsuits, brought by employees, alleging claims such as sexual harassment, discrimination, or wrongful discharge. A policy that couples D&O and employment practices liability insurance (EPLI) works well for these firms.

A claim against a company’s CEO, chief financial officer, vice president, etc.-whether based on allegations of misrepresentation, negligence, employment discrimination, or the like-has the potential to cripple an organization financially. Even if a claim does not result in a legal judgment or settlement, it will need to be defended, resulting in substantial legal costs to the organization.

A properly written policy will provide protection both to the company, and to the individual insured directors and officers. The personal assets of individual directors and officers-and thus those of their spouses and estates-can be at risk if the company is not in a position to indemnify them for any losses. Such a situation could occur if corporate bylaws or public policy would not permit indemnification based on the particular allegations, or if the company is in a bad financial condition, or even bankrupt.

Today’s insurance market offers D&O coverage at surprisingly affordable rates. Given the financial loss potential, it’s a coverage that any company should consider adding to its insurance portfolio.

Here’s Why Your Private Company Needs D&O Liability Insurance

If you run a small, privately held company, you may not think that you need the kind of insurance protection that larger, publicly traded companies have for their directors and officers. You would be mistaken. Directors and officers (D&O) liability insurance has a place in the insurance portfolio of just about any company.

D&O insurance is designed to cover claims based on the actions of a company’s directors and officers in their corporate capacity. Claims can be filed by shareholders/investors, competitors, customers, employees or government agencies. The cost of defending such claims can run high, and if a claim proceeds to judgment or settlement, the outcome can be financially crippling to a company.

Consider these “Top Ten” reasons for adding D&O liability coverage to the insurance protections you already have in place for your business:

1.   While private businesses may not trade company shares on a public exchange, they do have investors, who expect to turn a profit on the money they have invested. Today’s credit market makes it more difficult for deals to succeed, meaning that new business enterprises have a harder time getting off the ground. If investors lose their seed money, they may seek recourse against the fledgling firm’s top executives.

2.   Many private companies are established with the hope that someday, down the road, the business can go public. If and when that deal does happen, D&O can protect the founding entrepreneurs against claims by shareholders/investors that the sales price wasn’t good enough.

3.   Г‚ In private companies, directors and officers often are active, hands-on business executives. Because they are very involved in their company’s business operations, their actions are more likely to be called into question.

4.   Employment practices liability litigation claims of sexual harassment, discrimination, wrongful termination are growing in number. These types of lawsuits can result in staggering judgments and settlements. Hands-on management by a private firm’s key executives makes them easy targets for these types of claims. Combination D&O/EPLI (employment practices liability insurance) policies make sense for these firms.

5.   Private companies, especially in their early years, may not have the resources to hire specialized support staff or outside advisors for complex legal filings and other requirements. This makes them more susceptible to legal compliance claims brought by governmental agencies, on matters such as tax law, labor law, etc.

6.   Even when claims of wrongdoing, negligence or mismanagement are unfounded, they still need to be defended. Legal defense costs can quickly add up, straining the resources of a private firm.

7.   Directors and officers of private companies often have a great deal of their own wealth tied up in the firm. Therefore, the cost of defending, settling, or being held liable on a claim can have financial repercussions for that executive’s spouse, family and estate.

8.   D&O policies are best designed when they insure both the company, and individual directors and officers. That’s because there may be situations where the company cannot, or will not, indemnify the individually named directors/officers in a lawsuit. A company may not have the financial resources to back up the executive’s loss, or the corporate bylaws or public policy may prohibit it.

9.   The current insurance market has made D&O coverage more affordable than it has been in the past.

10.   Individuals may be reluctant to take on director/officer roles without the protection D&O insurance can provide. This may make it more difficult for a company to find the right people to serve in key corporate positions.

The right D&O coverage like any insurance protection you purchase for your company gives managing executives peace of mind, and the time to attend to running the core operations of their company which is, after all, why they went into business in the first place.

EEOC Issues Guidance on Discrimination Against Workers with Caregiving Responsibilities

The chances that an employee’s responsibilities to work and to family will collide have increased in the past few decades. Mothers are more likely to be employed than not, for example, and more individuals with aging parents have taken on caregiving roles.

Employees with caregiving responsibilities are not a protected group under federal workplace discrimination laws. Yet, the Equal Employment Opportunity Commission (EEOC) has released Enforcement Guidance under the title “Unlawful Disparate Treatment of Workers with Caregiving Responsibilities.” According to the EEOC, the guidance is not intended to create a new protected category, but to illustrate circumstances in which stereotyping of caregivers, or other types of disparate treatment against caregivers, might violate Title VII discrimination laws or run afoul of the Americans with Disabilities Act’s prohibition of discrimination based on a worker’s association with a disabled individual.

The guidance discusses seven broad categories of possible unlawful discrimination against caregivers. The bulk of the guidance is about gender-based disparate treatment of female caregivers. The guidance explains that employment decisions that discriminate against workers with caregiving responsibilities are prohibited if they are based on gender or another protected characteristic, regardless of how other workers in the same protected class, but without the caregiving responsibilities, are treated. For example, if women with children are routinely passed over for an executive training program while men with children are selected for the program, the fact that women without children also are selected for the program would be no defense against a sex discrimination charge.

Similarly, gender-based assumptions about a future caregiving role-such as asking young female applicants, but not young men, their plans for marriage and children-would be unlawful. Other examples in this category include assigning lower-level projects to a new mother, not making an offer which requires a relocation to a qualified woman with a family based on the assumption that she wouldn’t want to move, or assigning more weight to absences or tardiness due to caregiving responsibilities than to those due to other reasons.

The guidance recognizes discrimination against male caregivers, stating that stereotyping about men as caregivers can result in them being denied certain opportunities that female co-workers have, or in harassment. So, for example, refusing to grant a male employee’s request for leave for childcare purposes while granting female employees’ requests would be discriminatory.

The EEOC notes that because the law does not prohibit discrimination based solely on parental or other caregiving status, there generally would not be a violation if working mothers and working fathers were both treated in a similar unfavorable (or favorable) manner, as compared to workers without children.

Assumptions about the job commitment of pregnant women, or about their ability to perform certain physical tasks, can amount to pregnancy discrimination. The guidance warns against pregnancy-related inquiries and treating a pregnant employee who is temporarily unable to perform some of the duties of her job differently than workers who are temporarily restricted for other reasons.

The guidance also addresses discrimination against women of color, unlawful caregiver stereotyping under the Americans with Disabilities Act and subjecting employees with caregiving responsibilities to hostile work environments.

The EEOC guidance should put employers on notice to review their workplace policies to ensure that hiring, promotion and other practices do not, inadvertently, treat employees with caregiving responsibilities in ways that violate federal discrimination laws for protected classes of workers. Also, state, city and county laws should be reviewed, as these may impose additional requirements.

Workers’ Comp System Faces Many of the Same Problems As Health Care

Many of the same problems that plague the U.S. health care system are spilling over into workers’ compensation, including rising costs, an increased incidence of potential injuries brought on by an aging workforce and the obesity epidemic, and regulatory uncertainties. In a speech at the 62nd Workers’ Compensation Educational Conference, Robert Hartwig, president of the Insurance Information Institute (I.I.I.), outlined these and other challenges facing the workers’ compensation system over the next 10 to 20 years.

Hartwig first applauded businesses’ efforts that have radically reduced the frequency of workplace injuries in America. Successes on this front have-

·   Helped companies remain productive, by lowering the number of future lost workdays that result from permanently disabling injuries or fatalities.

·   Increased and preserved worker incomes-Seriously injured workers have lower lifetime earnings, a higher incidence of bankruptcy, and increased dependency on public assistance.

·   Maintained and improved the quality of workers’ home life-Seriously injured workers experience a higher incidence of divorce, substance abuse and depression.

Hartwig then turned his remarks to problems facing the workers’ compensation system-

·   The never-ending cycle of reform, fraud and abuse, which will be an endless driver of costs in the future.

·   The shift in balance between medical benefits and wage replacement-In 20 years, he predicted, 80-85 percent of workers’ compensation benefits will be medical, and only about 15 percent will be for wage replacement. As a result, the workers’ compensation system will face the same problems as the health care system, but even more so, because the workers’ compensation system doesn’t have the same tools to control costs, such as deductibles and copayments.

·   The aging workforce-Fatality rates for workers ages 65 and older are triple that of workers ages 35-44. The workplace of the future will require a complete redesign to accommodate the surge in the number of older workers.

·   The obesity epidemic-In 2006, the most obese workers filed twice as many workers’ compensation claims and had 13 times more lost workdays than healthy-weight workers.

·   Regulatory issues-Health care reform will be a major theme in the 2008 elections, as it was in 1992, when proposals surfaced that workers compensation be rolled into the general health care system. This could happen again.

Though this information is sobering, Hartwig urged businesses to use it to their competitive advantage and work to head off problems before they occur, and not wait until injury patterns emerge to take action. 

Driver Survey Identifies Practices That Can Significantly Lower On-The-Job Injury Frequency Rates

The best way to prevent fleet crashes and in the process lower injury frequency rates is to hire drivers based on their ability and past performance. This discovery comes from Liberty Mutual Group, which recently released the results of its annual trucker survey.

As part of the study, the company identified practices in seven key areas that contributed to lower injury frequency rates:

1.   Management Programs

·              Most companies that measure injury frequency rates have lower frequency rates.

·              Those companies that conduct driver surveys had frequency rates 18 percent lower than those that didn’t conduct surveys.

·              While most companies conduct injury investigations, those that use written injury investigation forms, ask for prevention recommendations, calculate injury rates, set injury rate goals and track injury rates by customer had a 13 percent lower injury frequency rate.

2.   Expectations

·              Four out of five companies have a written seat belt policy and close to 50 percent have both a written seat belt policy and enforcement activities. Those with both the policy and enforcement had a crash injury frequency rate that was 33 percent lower than those that didn’t use both.

3.   Selection

·              Four out of five companies use a hiring checklist to document each step of the hiring process. Those using a hiring checklist had 30 percent lower injury frequency rates.

·              Four out of five companies have job descriptions that include essential job functions. Companies including essential job functions in the job descriptions had an 11 percent lower injury frequency rate.

·              Four out of five companies designate a medical provider. Those using designated medical providers had slightly lower injury frequency rates.

4.   Monitoring Performance

·              Companies that provide technology for driver managers so they can verify available hours of service for drivers had a 37 percent lower crash injury frequency rate.

·              One out of four companies have GPS and use it to monitor speed. These companies had a 15 percent lower crash injury frequency rate.

·              Two out of three companies conduct road observations. This practice results in a slightly lower injury frequency rate.

5.   Transitional Work Programs

·              One out of four companies had someone responsible for tracking employees out of work and had written transitional work job descriptions. The group using both had a 7 percent lower injury frequency rate.

6.   Injury Prevention

·              Most companies offer some form of injury prevention activities. Those that use an injury prevention manual, provide regular training and have observations for enforcement had an injury frequency rate that was one-third of those that do not.

7.   Training

·              Three out of four companies use written agendas for training. While written agendas are important, the survey found that injury frequency rates went down as the training group size became smaller. Those with written agendas and one-on-one training had a 30 percent lower injury frequency rate.

CERCLA Rights to Sue for Clean Up Costs Reinstated

In the case of United States v. Atlantic Research Corporation, the Supreme Court ruled that potentially responsible parties (PRPs) that voluntarily clean up contaminated sites may sue other PRPs to recover their cleanup costs under section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The reinstatement of this right comes after many years of federal court battles over the issues of authority and methodology for recovering cleanup costs from other PRPs.

When CERCLA was originally enacted, the courts interpreted section 107(a) as providing a method for PRPs to recover their costs from other PRPs. However, in 1986, Congress enacted the Superfund Amendments and Reauthorization Act (SARA). Section 113(f) of this law outlined explicit means for PRPs to pursue contribution from other PRPs. After the enactment of SARA, some federal courts held that section 113 was the only remedy for cleanup cost recovery. Other courts prevented PRPs from suing under section 107 of CERCLA and expanded section 113 to allow PRPs’ contributions without the need for a suit.

Section 107 makes PRPs liable for “all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe” and “any other necessary costs of response incurred by any other person.” In Atlantic Research, the United States argued that the section 107 use of “any other person” was limited to suits brought by “non-PRPs.”  That meant that Atlantic Research, a PRP, was barred from filing suit. The Supreme Court held that all the words of the statute must be “read as a whole.” They added that using the United States’ reading of the language would decrease the number of plaintiffs permitted to sue to almost zero, which would make Section 107 worthless.

Section 113 prohibits claims against PRPs who have satisfied their liability to the United States or a state in an administrative or court approved settlement. In Atlantic Research, the United States argued that permitting PRPs to seek recovery under section 107 negates the protection offered to PRPs who have settled under section 113. The Supreme Court conceded this. However, the Court stated that this “supposed loophole” would not discourage settlements because district courts would take into account any earlier settlements when assigning the level of liability to the various PRPs involved.

The Supreme Court also ruled that section 107 and 113 provide two “clearly distinct” remedies. Section 107 permits PRPs to recover cleanup costs they have incurred from other PRPs. A PRP that has satisfied a settlement agreement or court judgment under CERCLA may pursue contribution from other PRPs through section 113. The Court made clear that simultaneous recovery under section 107 and section 113 is not allowed. PRPs can’t choose their method of recovery. The appropriate remedy will depend on the circumstances in each case.

Duke Study Says Obese Workers File More Worker Compensation Claims

A Duke University Medical Center study revealed that obese workers filed twice the number of workers’ compensation claims as non-obese workers. In addition the over-weight workers had 7 times higher medical costs from those claims and lost 13 times more days of work from work injury or work illness than did non-obese workers.

The results of the study were published April 23, 2007, in the Archives of Internal Medicine.

The researchers looked at the records of 11,728 employees of Duke University who received health risk appraisals between 1997 and 2004. Duke ordinarily gathers this information anonymously as a way of identifying potential areas of occupational risk in order to develop plans to reduce that risk. The analysis covered a variety of occupational titles, such as administrative assistants, groundskeepers, nurses and professors.

The study compared the relationship between body mass index (BMI) and the rate of workers’ compensation claims. BMI assesses a person’s weight in relationship to their height, which is why it is considered the most accurate measure of obesity. For Americans, a BMI of 18.5 to 24.9 is considered normal; 25 to 29.9 is considered overweight, and 30 and above is considered obese.

The researchers discovered that workers with a BMI greater than 40 had 11.65 claims per 100 workers, compared with 5.8 claims per 100 workers for employees with a normal weight. They also found that obese workers averaged 183.63 lost days of work per 100 workers, compared with 14.19 per 100 workers for employees of normal weight. The average medical claims costs per 100 workers was $51,019 for the obese and $7,503 for the non-obese.

The study showed that the body parts most susceptible to injury among obese workers were the lower extremities, wrist or hand, and back. The most common causes of these injuries were falls or slips, and lifting.

The researchers concluded that their findings were applicable to the community as a whole, since the demographics of Duke closely reflect the local area. They plan to use the Duke population to help the community, so the solutions they devise can benefit the community as a whole.

However, the primary message they hoped to deliver is that the solution to reducing the burden on workers’ compensation involves eliminating both individual risk factors such as obesity and the risk factors within the workplace that cause injury. By targeting obesity and workplace risks simultaneously, businesses can reduce absenteeism, increase the overall health of workers, and decrease the cost of health care.

Six Reasons Your Home-Based Business Needs a Small Business Policy

Like most new home-based business owners, you believe your homeowner or renter’s insurance coverage offers sufficient protection.  That is unfortunate, because in most instances these policies offer little to no coverage for business-related losses.

Homeowner’s policies are not designed to cover business losses.  Most offer a small amount of business property coverage, meant to cover incidental items, such as a computer used for office work. 

Depending on your business, you may be able to purchase a homeowner’s endorsement to cover your business property.  Your insurer is naturally going to want to know more about your business.  Questions such as what type of business, how long you have been in business and how many employees are common.

If your business is small with a low risk profile, and with limited client visits to your home, your homeowner’s insurer may offer limited liability protection. This protection would cover slips and falls when a client visits your office, which otherwise would not be covered.

If this option is not available, you may want to consider a small business policy.  Your homeowner’s insurer might offer a home-based business package for a reasonable premium, or another insurer can offer a package policy to cover the liability and property of your business.

Take a look at the following list.  If one or more of the items below apply, you may want to consider a business policy for your business:

o                   Business Property, Stock or Equipment over $10,000 in value

A business policy will allow you to insure your office contents, equipment, and stock. A homeowner’s policy will likely have little, if any, coverage for business-related items.

o                   Clients visit your office/use your product/depend on your service

Liability insurance can help cover your exposure to lawsuits resulting from slip and falls, product liability claims, personal injury claims, etc.  Perhaps even more importantly, it will provide defense costs for such actions.  Homeowner’s policies do not have coverage for business liability.  In a few instances, you may be able to purchase an endorsement to allow coverage for slip and falls due to customer visits, depending on your type of business.

o                   Damage to your office/workspace would require you to relocate/find a temporary substitute

Extra Expense coverage in a business policy will provide funds for a temporary office/workspace or cost of a mobile trailer near your damaged office site.

o                   An Error or Omission could result in a lawsuit that would need to be defended/could seriously damage your business

Errors and Omissions coverage will protect you from judgments and defense costs resulting from past mistakes. 

o                   Damage to your workplace could cause you to lose business, perhaps even lose some customers permanently

Business Interruption Coverage will help pay for expenses until your property is repaired or sales return to normal (depending on the policy form)

o                   Your employees use their vehicles to make deliveries or run errands for your business

Non-owned automobile liability will protect your business in the event that your employee has a serious accident during the course of running an errand for your business.  

Six Reasons Your Home-Based Business Needs a Small Business Policy

Like most new home-based business owners, you believe your homeowner or renter’s insurance coverage offers sufficient protection.  That is unfortunate, because in most instances these policies offer little to no coverage for business-related losses.

Homeowner’s policies are not designed to cover business losses.  Most offer a small amount of business property coverage, meant to cover incidental items, such as a computer used for office work. 

Depending on your business, you may be able to purchase a homeowner’s endorsement to cover your business property.  Your insurer is naturally going to want to know more about your business.  Questions such as what type of business, how long you have been in business and how many employees are common.

If your business is small with a low risk profile, and with limited client visits to your home, your homeowner’s insurer may offer limited liability protection. This protection would cover slips and falls when a client visits your office, which otherwise would not be covered.

If this option is not available, you may want to consider a small business policy.  Your homeowner’s insurer might offer a home-based business package for a reasonable premium, or another insurer can offer a package policy to cover the liability and property of your business.

Take a look at the following list.  If one or more of the items below apply, you may want to consider a business policy for your business:

o                   Business Property, Stock or Equipment over $10,000 in value

A business policy will allow you to insure your office contents, equipment, and stock. A homeowner’s policy will likely have little, if any, coverage for business-related items.

o                   Clients visit your office/use your product/depend on your service

Liability insurance can help cover your exposure to lawsuits resulting from slip and falls, product liability claims, personal injury claims, etc.  Perhaps even more importantly, it will provide defense costs for such actions.  Homeowner’s policies do not have coverage for business liability.  In a few instances, you may be able to purchase an endorsement to allow coverage for slip and falls due to customer visits, depending on your type of business.

o                   Damage to your office/workspace would require you to relocate/find a temporary substitute

Extra Expense coverage in a business policy will provide funds for a temporary office/workspace or cost of a mobile trailer near your damaged office site.

o                   An Error or Omission could result in a lawsuit that would need to be defended/could seriously damage your business

Errors and Omissions coverage will protect you from judgments and defense costs resulting from past mistakes. 

o                   Damage to your workplace could cause you to lose business, perhaps even lose some customers permanently

Business Interruption Coverage will help pay for expenses until your property is repaired or sales return to normal (depending on the policy form)

o                   Your employees use their vehicles to make deliveries or run errands for your business

Non-owned automobile liability will protect your business in the event that your employee has a serious accident during the course of running an errand for your business.  

Do Your Employees Drive Personal Vehicles for Business-Related Purposes?

If an accident occurs while an employee or volunteer is operating their personal vehicle for company business, your company could be held liable.  Even when an employee is just running an errand, such as making a bank deposit, dropping off a proposal or picking up a part, if an accident occurs your company could suffer as a result.   

While you cannot insure a non-owned vehicle, there are other steps you can take to protect your company before a loss occurs. If your employees or volunteers use personal vehicles for company business, even if just occasionally, the following guidelines can help reduce your risk:

1.   Determine a minimum level of auto liability insurance your employees and/or volunteers must carry.  Also consider what documentation should be provided to your company to demonstrate that proper insurance coverage is in effect.  For example, you might require that employees or volunteers submit a certificate of insurance each year that verifies coverage limits.

2.   Driving records should be checked prior to an employee’s hiring.  Validate driving credentials and check for accidents and moving violations over the past 5 years.  All recruiters, managers and human resource people should be aware of this policy.

3.   Avoid having youthful drivers, those with little driving experience, or drivers with more than one moving violation or accident use their vehicle for business-related purposes.

4.   Periodically check driving records for new offenses and moving violations.  Introduce a procedure for how discovery of new offenses will be handled.

5.   Develop a written policy on business use of personal vehicles and communicate to all employees. Managers, human resource personnel and recruiters should share this information with any potential new hires.

6.   Be sure you remain in compliance with local, state and federal statutes while obtaining private information about your employees. 

Insurance can play a role in helping to protect your business from this exposure. Non-owned auto liability insurance may be obtained on a stand-alone basis or in conjunction with your general liability coverage.  Coverage for hired vehicles may also be available, if needed.

Insurance premiums for non-owned automobile liability depend on the frequency of personal vehicle use and how employees use their vehicles for your business. Premiums for this line of coverage are generally fairly reasonable.

Another way to reduce risk is to eliminate the exposure.  If employees or volunteers are prohibited from using their personal vehicles for business-related purposes, it eliminates the possibility of an accident that will affect your company.

In the meantime, while you are mapping out your risk reduction strategy, maybe you should consider making that bank deposit yourself…

Longevity Is Key When It Comes to Lawyer’s Professional Liability Claims

Retirement usually means not only leaving your job, but everything associated with that job. However, when a lawyer retires, this isn’t necessarily the case. Whether they are no longer practicing law, or starting an entirely new career, lawyers may find themselves haunted by liability claims arising from their past work.

For this reason, it’s important for departing lawyers to confirm that liability coverage will remain intact for past work. To accomplish this goal, you should review the partnership agreement, the firm’s professional liability insurance, and any recent claims. Keep in mind that partnership agreements and insurance coverage vary from firm to firm. When you review the agreement, you may find an absence of provisions for the firm’s ongoing indemnity or insurance obligations towards former members.

When reviewing the firm’s professional liability policy you’ll probably find that is written on a “claims made” basis. This means that coverage is provided for any claims made during the policy term, even if the events that precipitated the claim happened before the policy’s effective date. Even if your firm has a claims made policy, it can still have coverage gaps that significantly affect you once you decide to leave. For example, the insurer may have included provisions that limit or exclude coverage of the firm’s activities in certain practice areas. Or with claims made policies, if an exclusion is added in the future, it is applicable to all past and future work in that practice area.

Your policy review should also include an examination of its coverage limits. Since these limits cover all claims made and reported within the policy term, there may not be funds available to cover a retiring lawyer if the firm has already submitted a substantial number of claims or even just one large one.

The next step in your evaluation is a determination of how the policy defines “insured.” In some attorney-client relationships, a lawyer may be considered an employee or independent contractor. Under some policies, coverage for employees and independent contractors is either limited or non-existent.

You should also review the conditions regarding the firm’s responsibilities for policy renewal and reporting claims. Don’t assume that the firm will continue to operate as a going concern after you are gone, or that it will continue to renew its liability policy. In fact, in the case of smaller firms, dissolution is often the outcome after a key partner retires.

If the practice is dissolved, it is important that the firm and its former partners maintain insurance coverage. And since time is a crucial factor in a dissolution scenario when it comes to coverage, it is important that you meet as soon as possible with your insurance representative to discuss your coverage status and appropriate options.

Know Your Commercial General Liability Insurance Limits

A commercial general liability policy (CGL) lists six different limits on the policy’s declarations page. While the limits may be listed separately, it’s important to understand that they are all interrelated. That means that payment of damages for one limit will affect another limit.

To illustrate how these limits interact, it is necessary to examine each one in detail:

The General Aggregate Limit  – The maximum amount the insurer will pay during the policy period for all damages including bodily injury, property damage, personal and advertising injury except for any amount paid as damages because of bodily injury or property damage included within the products-completed operations hazard. The definition of the products-completed operations hazard is outlined in the policy and a separate aggregate limit applies to this type of claim. Also included within the general aggregate are damages paid for medical payments.

Products-Completed Operations Aggregate Limit – The maximum amount the insurer will pay for damages because of bodily injury or property damage included within the products-completed operations hazard. The specified hazards are those described within the definition of the products-completed operations hazard and are limited to bodily injury or property damage that:

1.             Occurs away from the insured’s premises.

2.             Caused by the insured’s products that are no longer in the insured’s possession or an insured’s work that has been completed.

Personal and Advertising Injury Limit – The maximum amount the insurer will pay if legally obligated to pay damages due to personal and advertising injury offenses. The personal and advertising injury limit applies separately to each person or organization that sustains damages because of a covered offense. However, regardless of the number of persons or organizations claiming damages, or the number of offenses claimed during the policy period, the insurer is only obligated to pay up to the general aggregate limit.

Each Occurrence Limit – The maximum the insurer will pay for the sum of all damages due to bodily injury, property damage and medical payments. Keep in mind that there is an aggregate limit for bodily injury and property damage claims that arise from the products-completed operations hazard and a separate limit for all other bodily injury and property damages. However, the each occurrence limit does apply to all sums paid for medical payments.

Damage to Premises Rented to You Limit – This coverage is actually an exception to certain exclusions found in the bodily injury and property damage coverage. The first exception provides coverage for property damage to a premises and its contents, rented to the insured for 7 or fewer consecutive days if an insured is legally obligated to pay for such damage due to any cause except fire.

The second exception provides coverage for damage to the premises only if an insured is legally obligated to pay for property damage due to fire. However, if an insured is held liable solely due to an agreement to be responsible for the property or for damage to the property, there is no coverage. Liability has to be imposed on the insured as the result of a lawsuit in order for coverage to apply.

The Damage to Premises Rented to You limit applies to any one premises. Any property damage paid under this limit will reduce the each occurrence limit for that same occurrence and will also reduce the general aggregate limit.

Medical Expense Limit – The medical expenses coverage is a separate insuring agreement that obligates the insurer to pay reasonable medical expenses for bodily injury, caused by an accident, without regard to fault. Medical payments are subject to the medical expense limit. The medical expense limit applies separately to each person. However, medical payments will reduce the each occurrence limit for that same occurrence and will also reduce the general aggregate limit.

A Well-Designed Affirmative Action Plan Can Help You Avoid Discrimination Lawsuits

In an article titled Litigation Explosion, which appeared in the December 10, 2006 edition of the Arizona Daily Star, author Becky Pallack discusses a University of Arizona study that says employee lawsuits are on the rise:

“The researchers analyzed data from the U.S. Equal Employment Opportunity Commission and found 95,115 claims of employment discrimination nationwide in 2005.Federal employment discrimination lawsuits are up 268 percent since 1991, rising at a rate nine times as fast as other types of federal civil litigation.”

The financial effect on business from this increase in litigation has been devastating:

“For employers, the fallout from the lawsuit boom is expensive. Employers facing discrimination lawsuits were ordered by courts to pay $101.3 million in 2005, up nearly 600 percent from $14.7 million in 1992; and employers paid another $271.6 million in settlements, up 130 percent since 1992.”

As if this wasn’t enough, the EEOC has begun a new initiative, E-RACE (Eradicating Racism and Colorism from Employment), which is designed to improve the agency’s efforts to ensure workplaces are free of race and color discrimination. As part of this new strategy, the EEOC has said that it plans to “identify issues, criteria and barriers that contribute to race and color discrimination, explore strategies to improve the administrative processing and the litigation of race and color discrimination claims, and enhance public awareness of race and color discrimination in employment.”

With this increased emphasis on workplace discrimination, it is more important than ever to develop an effective affirmative action plan. Here are some tips to help you design a road map for ending discriminatory practices in your company:

·   Show commitment – Determine your diversity goals, make a plan to reach those goals, and then work the plan to its conclusion.

·   Identify the specific inequities you want to address – Before you create your diversity plan, perform the analysis required by law to identify what imbalances exist between the makeup of your workforce and the diversity of the workforce in the surrounding area. These are the areas your plan needs to address.

·   Perform an analysis of barriers to success – You will need to list what barriers to diversity exist in your business before you can create an effective affirmative action program. Start by asking yourself if individuals from a particular class are underrepresented in a job category. If the answer is “yes,” you need to figure out why. Is it because you recruit through word of mouth, which may be perpetuating your company’s homogeneous workforce? Where do you conduct interviews for new employees? Is it accessible to all types of applicants? If you advertise in newspapers, are they readily available to different ethnic populations?

·   Target the specific practice(s) that need altering – The corrective measures you select must be designed to remedy the imbalances identified in your assessment. If your company’s interview process puts minority candidates at a disadvantage, then focus on recruiting practices. If you have a lack of inclusion in a job category because you cannot find employees with the necessary skill set, then consider a more proactive job-training program.

·   Specify a timetable to accomplish goals – Have a clear picture of what the program needs to accomplish, and when that progress needs to take place. The ultimate success of your program is dependent upon having a quantifiable time line that clearly establishes the date by which each of your goals will be accomplished.

Ten Tips for Avoiding Legal Malpractice

Statistics show that in any given year, a minimum of five to six insured lawyers out of every 100 in private practice experience a malpractice claim, according to the Colorado Bar Association. In other words, a firm with 20 lawyers could be the recipient of a claim every year. As exposure to legal malpractice claims continues to rise, it is an important function of law office management to establish effective loss prevention practices:

·   Develop a standard calendaring system – This should contain all items to be calendared, deadlines for the various cases being handled, as well as deadlines for critical events. It should also include frequent reminder dates. The most effective calendaring system will have tracking procedures that identify the author of a particular entry.

·   Know the signs of substance abuse and depression – Heavy workloads can often result in an attorney becoming depressed or compensating through substance abuse. Knowing the warning signs associated with each scenario can prevent the firm from being hit with a malpractice suit because of a dysfunctional attorney. Symptoms of substance abuse include Monday morning tiredness, missing deadlines and appointments and neglecting mail and phone calls. Behavioral changes associated with depression include misplaced anger, frequent bouts of crying, self-criticism, becoming easily distracted, and lack of interest in every day activities.

·   Maintain good client relations – When accepting a new client, an attorney should discuss the purpose for which the firm was hired, reporting schedules, fees and billing arrangements, and client obligations. All of this information needs to be documented in writing and given to the client. Also, be sure the lines of communication remain open throughout the attorney-client relationship.

·   Screen clients carefully – Establish a policy of screening clients using a pre-determined set of criteria. Hold each attorney accountable for using those criteria.

·   Conduct thorough research and investigation – Some of the most common errors include failure to correctly apply the law, failure to determine a deadline, inadequate discovery and investigation, poor planning, and errors in the choice of procedure. The attorney of record should review staff work to ensure the accuracy of their work.

·    Avoid conflicts of interest and matter – Avoiding conflicts of interest involves establishing and updating a database of all clients and matters handled. To avoid conflicts of matter, create the practice of circulating a “new matter memo” to all attorneys and support staff whenever the firm accepts a new case. 

·   Never become inappropriately involved in a client’s interests – Accepting a director role in a client’s company, investing in a client’s securities, transacting business deals with a client, agreeing to contingent cash fees, and soliciting investors for a client’s business can result in a host of problems.  For example, the firm could be held liable for the attorney’s activities as the director in a client’s company or face conflict of interest charges because of an attorney’s personal involvement or investment in a client’s business.

·   Document all work – Establish a system for verifying the accuracy and content of all documents such as letters, briefs, contracts and motions. Also create separate files to store all documents prepared or received for each client matter.

·   Avoid fee disputes – Document fees and the scope of work in all matters. Bill on a monthly basis unless the client has asked for a different arrangement. Provide the client with detailed billing statements that include who performed the work and how much time was required.

·   Never delude yourself into believing you are immune from a malpractice suit – Your best defense is to remain acutely aware of how prevalent malpractice suits have become. It is this awareness that will motivate you to establish and maintain effective loss control procedures.

The EEOC Strengthens Commitment to Filing Class Action Suits

In 2006, the Equal Employment Opportunity Commission changed its strategy when it announced plans to file more class action suits. This shift was predicated on the decrease in the number of private-sector discrimination-related class action suits and increase in wage-hour class actions. As a result of this decline in discrimination class actions, the Commission’s position may indicate a trend toward more government-led class actions in this area.

The EEOC is in a unique position to litigate this type of suit because it is not required to meet the strict requirements to maintain a class action set forth in Rule 23 of the Federal Rules of Civil Procedure. In addition, the agency isn’t hampered by considerations of whether the monetary compensation won will be worth the expense of a trial.

The Commission is also spurred on in its decision by the belief that a national approach to litigating workplace civil rights is necessary due to a lack of consistent effort on the part of the private sector. The Commission itself is guilty of not identifying widespread discrimination in the past, and this shift is seen as attempt to make the agency more proactive.

What means will the agency use to evaluate which cases require class action treatment? Its primary sources will be:

·               Data gathered through EEO-1 surveys of private employers of 100 or more employees

·               Analyses designed by private statisticians who act as consultants to the Commission

·               Charges filed by claimants

·               Its own databases

·               Pending litigation

·               Long-term analysis of EEO-1 reports

In light of this emphasis on rooting out systemic discrimination, employers need to be increasingly vigilant. Here are some guidelines that can help you prevent becoming party to an EEOC-initiated class action suit:

1.                  Keep your affirmative action plans updated so that when analyzing, the data will identify problem areas in recruitment, hiring, transfer, promotion, compensation, termination, or other terms and conditions of employment.

2.                  Review the criteria used for hiring, firing and other personnel decisions to identify standards or actions that can be perceived as discriminatory.

3.                  Review instances in which a personnel decision impacted negatively on an employee or employees to be sure that all criteria used to make the decision was job related and the result of the need to maintain business operations.

4.                  Provide updated training for management involved in interviewing, hiring, job assignment, compensation, job advancement, and termination to ensure that they understand their obligations under the equal employment opportunity laws.

5.                  Inform management of the negative impact that e-mails have on the defense of claims, especially if careless phrases are used, insulting comments are made or e-mails are used for inappropriate purposes.

6.                  Publish company policies that spell out a zero tolerance for all forms of discrimination, harassment, and retaliation. Train non-management employees in those policies and their obligation to report immediately any actual or perceived harassment, discrimination, or retaliation.

7.                  Post and regularly distribute policies regarding reporting harassment, discrimination, or retaliation.

8.                  Develop a program through which employees receive severance pay or other consideration in exchange for executing binding releases that comply with the Older Worker Benefit Protection Act.

9.                  Keep and regularly review electronic data to identify potential problems and to avoid the possibility of it becoming damaged.

Take Steps to Prevent Workplace Bias Claims Before They Happen

The Equal Employment Opportunity Commission recently reported that work-related bias complaints increased to 75,768 during 2006 compared with 75,428 the previous year. Discrimination complaints had previously risen to a seven-year high of 84,442 in 2002, but then steadily decreased from 2003 to 2005. The most frequent complaints have remained consistent throughout the years, including allegations of discrimination based on race, sex or retaliation.

This upward trend in the number of suits filed should raise alarms for employers everywhere. The legal cost to defend an allegation of discrimination that reaches trial has been estimated between $75,000 and $200,000. This doesn’t include hidden costs like work time lost because of gathering evidence or giving depositions. It also doesn’t include costs associated with an appeal or with payment of a final judgment.

The National Center for Preventive Law (NCPL) at the California Western School of Law in San Diego recommends that employers practice what it refers to as “preventive law.” That means assessing legal risks and instituting solutions to prevent them from occurring.

To assist employers in creating an effective prevention program, NCPL has established the following guidelines:

·            Manage Compliance – Develop a corporate policy regarding discrimination and document in the employee handbook. Document the specific ways in which corporate policy enforces compliance. Maintain a record keeping system that indicates what actions were taken if policies were violated.

·            Contain Risk – Identify overt employee conduct that could lead to a lawsuit. Also look for less obvious misconduct that encourages or promotes discrimination.

·            Respond to Change – Maintain the longevity and continuity of your policies by including mechanisms that allow for necessary updates caused by new business activities or other organizational developments.

·            State Compliance Policy – Take every opportunity to restate corporate compliance policies, including such practices as having department managers discuss them during departmental meetings or by distributing fliers that remind employees about these policies.

·            Top Level Endorsement – Provide continuing opportunities for senior management to oversee and promote corporate compliance policies.

·            Create Compliance Accountability – Hold all staff members accountable for compliance in every activity they initiate or oversee.

·            Ensure Program Fairness – Be sure practices treat all employees fairly and guard against retaliation for raising compliance issues.

·            Maintain High-Level Oversight – Establish a Compliance Officer who has the authority to initiate, coordinate and review corporate compliance efforts.

·            Reward Success – Promote continued compliance through rewards such as monetary compensation.

National Council on Compensation Insurance Says Younger Workers Are More Accident Prone

According to a study conducted by the National Council on Compensation Insurance, younger workers have more injuries and illnesses than older workers; but older workers have higher costs per claim. The researchers discovered that age is an important factor in overall claim costs, but the significance of age on claims frequency has lessened. This has been interpreted to mean that age may not play an important role in future frequency trends. However, the relationship between age and claim severities is basically unchanged.

Factors associated with age, such as average wages, claim durations, lump-sum payments, injury diagnoses, and number of medical treatments, comprised a large part of the reason for the differences in the severity of claims between younger and older workers. The differences in wages and duration of claims were the principal reasons for the differences in the amount of payouts between younger and older workers. Differences in wages accounted for approximately one third of the differences in the amount of payout, while the differences in the duration of claims accounted for almost one half the difference.

Older workers experience more high cost injuries, such as injuries to joints like rotator cuffs and knees. These were more commonly experienced by workers aged 45-64.  Workers aged 20-34 more commonly experienced ankle sprains. Carpal tunnel syndrome and injuries to the lower back are among the top 10 diagnoses for workers of all ages. The researchers pointed out that the differences in the types of injuries only comprised about a quarter of the difference in medical severities between younger and older workers. The real factor influencing the difference in medical severities between older and younger workers was the significantly higher number and different mix of treatments within a diagnosis. This alone accounted for 70 percent of the difference.

Less than 10 percent of the difference in medical severities is due to a slightly more costly mix of treatments for older workers. This was reflected in small differences in the average prices of different types of medical services. The greater number and different mix of treatments also contribute to the longer duration of payments for older workers.

As for trends in loss costs, the researchers noted that the baby boomers’ impact was apparent when the data was viewed historically, but the major impact of this aging workforce has probably already occurred and employers should not anticipate that the aging workforce would present a major problem in terms of future claims costs.

Naturally Occurring Substances Can Expose Construction Firms to Environmental Liability

What do silica, mercury, arsenic, pyrite, and asbestos have in common? They all are recognized as toxic substances, or contain toxic substances as defined by the U.S. Environmental Protection Agency. Their very presence on a construction site presents a serious exposure for a construction contractor.

There are potentially hazardous consequences when these toxic substances are uncovered during construction:

·   Mercury – is a human neurotoxin; meaning it acts specifically on neurons or nerve cells. It is most hazardous to developing fetuses and small children. Eating mercury-contaminated fish is the way most humans become exposed. When mercury enters water, certain conditions can cause it to convert to methyl mercury. Methyl mercury is ingested by aquatic creatures and becomes more concentrated as it moves along the food chain. Humans receive the highest forms of concentration because they are at the end of this food chain.

·   Pyrite – has a high sulfur content, which if exposed to oxygen or water will form sulfuric acid. When a construction project releases significant amounts of pyrite into the surrounding area, it can result in high amounts of acid drainage, which enters surrounding bodies of water. The acid drainage contaminates streams and water wells of area residents.

·   Asbestos – has little or no impact on the environment and human health if left undisturbed. However, when construction releases natural asbestos fibers into the atmosphere, it exposes workers and residents of the surrounding area to respiratory hazards. Asbestos is known to cause cancer of the lungs and of the lining of internal organs.

·   Silica – is most dangerous in the crystalline form known as silicon dioxide. People who have been exposed to silica and contract silica-related respiratory conditions usually have inhaled tridymite or crystobalite contained in the dust released during construction. Although all forms of crystalline silica are different in chemical structure, all can eventually be deadly.

·   Arsenic – has been linked to cancer of the bladder, lungs, skin, kidney, nasal passages, liver, and prostate. Non-cancer effects can include thickening and discoloration of the skin, stomach pain, nausea, vomiting, diarrhea, numbness in hands and feet, partial paralysis, and blindness.

What specific implications does the presence of these toxic substances have on environmental liability insurance?  Many of these policies contain wording that excludes these naturally occurring substances from the coverage. In Contractor’s Pollution Liability Insurance (CPL), there are several ways exposure to naturally occurring hazards may be excluded. For example, the insurer could include a specific exclusion for naturally occurring substances in the exclusions section of the policy. No coverage would apply to claims based upon any naturally occurring substances in their unaltered form, or in an altered form due to naturally occurring processes.

A second way to exclude these substances from coverage is to exclude them by definition. In the policy’s definition of covered pollution conditions, the definition does not include naturally occurring substances. Pollution conditions are defined as the emission, discharge, dispersal, release or escape of pollutants, which are not naturally occurring. This negates coverage for these substances.

Does this mean you shouldn’t purchase a CPL policy? The answer to that question would be “no.” There are a number of different policy forms. Talk to your insurance agent to get the one that is best suited to your needs. 

Is Your Cyber-Policy Really Covering Your Technology-Related Exposures?

As businesses become increasingly reliant on technology to store sensitive information, the incidences of security breaches are becoming more prevalent. Each security breach increases the risk that a lawsuit or regulatory action could financially ruin a company and permanently damage its reputation. The situation is so bad, that some retailers and financial institutions targeted by litigation and regulatory actions are trying to hold their technology vendors accountable so they can transfer some of the fallout.

Many companies find themselves financial victims because they don’t buy insurance that addresses the many exposures related to security breaches. In some instances, a breach can trigger the need for a number of coverages, including crime, errors and omissions, employment practices liability, general liability, property and directors and officers liability. The so-called “cyber” policies address only one aspect of the exposure, the theft of information, money and identities through the Internet. That’s because these are major problems that are on the rise. According to Privacy Rights Clearinghouse, since February 2005, there have been more than 260 major security breaches involving nearly 100 million personal records. But if a company has only this basic coverage, they may not be prepared if disaster strikes. They should consider a more company-wide approach that includes insurance coverage for all possible exposures associated with a breach.

At the very least, your cyber policy should provide coverage in the following general risk areas:

·   Defense Coverage – Some policies limit the insurer’s duty to defend to actual lawsuits. That means that the insurer isn’t required to defend the insured against a claim, which may or may not result in a lawsuit. Others extend the duty to defend to all claims. You should look for the provision to defend against all claims in a cyber policy. You also need to review the policy in terms of who has the right to choose the attorney who will defend the claim. Many insurers can provide a choice of counsel provision that allows the company to make that choice. Talk to your insurer about having this provision incorporated into your policy.

·   Business-to-Business Coverage vs. Business-to-Consumer Coverage – If you want coverage for either or both of these risks, you have to make this known to your insurer. You need to be sure that the various exclusions and/or conditions necessary to minimize gaps in either coverage are present in your policy. These include electric/mechanical breakdown exclusion; breach of security exclusion; bodily injury/property damage exclusion; and employee malicious conduct exclusion.

·   Intellectual Property Infringement Coverage – All cyber insurance policies provide some level of intellectual property infringement coverage. However, some policies offer less coverage than others. Some even exclude coverage for software copyright infringement. Review the policy before you purchase to understand how much protection you have in this area. Most insurers are willing to insure software copyright infringement risk for an additional premium.

Remember, cyber insurance is like health insurance, you should customize your coverage to suit your company’s needs. Your best defense is to talk with your insurance agent to develop a plan that is right for you.

More Workers’ Compensation Claims Made As the Result of Work-Related Traffic Accidents

According to the Network of Employers for Traffic Safety, both on- and off-the-job motor vehicle crashes cost employers $60 billion annually from 1998 through 2000. The problem is so widespread, that in a recent study, the National Council on Compensation Insurance Inc (NCCI) noted that traffic accidents are the leading cause of accidental deaths in the United States. The study also said that workers’ compensation claims resulting from motor vehicle accidents are more severe than the average claim. Although they make up approximately 2 percent of all claims, they account for more than 5.5 percent of all losses because they cover a disproportionate share of the most severe claim types.

While workers’ compensation claims from motor vehicle accidents are growing, their frequency is declining but at a slower pace than for workers’ compensation claims in general. There are some other important characteristics about these claims that the NCCI noted in its study:

·   They almost always involve time lost from work.

·   Neck injuries are the most frequent diagnoses in these claims.

·   The average duration for a motor vehicle claim is 70 percent longer than for other types of claims.

·   They are three times as likely to involve a claimant attorney as compared to other types of claims.

The leading cause of these claims is a traffic accident that happened because the driver became distracted. The study revealed that almost 80 percent of the crashes and 65 percent of the near crashes resulted from the driver becoming distracted within three seconds of the event. The chief causes of the distraction were drowsiness and cell phone use.

The researchers had some specific suggestions regarding the steps employers can take to reduce the frequency and severity of these claims:

·  Encourage your employees to use seat belts – Failure to use seat belts cost employers roughly $2.1 billion yearly from work-related crashes between 1998-2000.

·  Be sure your employees never drive under the influence of alcohol – During 1998-2000, work-related crashes that resulted from drivers being intoxicated cost employers $3.1 billion annually.

·  Encourage employees to take defensive driving courses – These courses teach drivers how to react during an emergency so as to lessen the severity of the accident or avoid it all together.

·  Provide internal driver’s education courses – Teach employees good driving practices like pre-planning the trip route, realistically estimating how long the trip will take, being sure the vehicle is in good condition before hitting the road, and informing colleagues about travel plans.

Federal Rules Governing Civil Litigation Require Businesses to Keep Better Tabs on e-Documents

New rules, which took effect on December 1, 2006, require U.S. companies to keep better track of their employees’ e-mails, instant messages and other electronic documents in the event the companies are sued. These new rules are part of amendments to federal guidelines governing civil litigation and were approved by the Supreme Court in April 2006 after a five-year review.

Under the new rules, a company that is party to federal litigation must produce electronically stored information as part of discovery. This is the process by which both sides share evidence before a trial. Federal and state courts have already been requiring such evidence in individual cases. The new rules now make the production of such evidence mandatory for companies involved in federal lawsuits. Furthermore, any information technology employee who copies over a backup computer tape once a lawsuit has been filed could be accused of committing “virtual shredding.” Companies are still permitted to purge databases if the information they contain isn’t relevant to pending cases or cases the company anticipates being a party to in the future. However, sectors, such as financial services, remain subject to the data-retention rules they have always followed. In-house attorneys and IT staff will have to work together to ensure routine erasing of backup data doesn’t present legal issues. Lawyers must also know where company data is stored.

Many large companies are unaware of the data they have on hand, which makes them unprepared if sued. Because they lack a real knowledge of what data they house and where it is located, these companies are more likely to settle lawsuits to avoid the costs associated with electronic discovery. Better organization of the data will lower these costs and enable companies to avoid settling.

On the other hand, large companies are likely to face higher costs from organizing their data. The new rules make it necessary for companies to know about items more difficult to track, like work-related digital photos on employee cell phones and information on removable memory cards. As a result, firms that help businesses track and search their electronic data are experiencing a huge surge in new business.

Most legal experts agree that it isn’t a question of companies changing how they keep electronic files, but rather a question of having a more complete knowledge of where documents are stored. The new rules also provide more direction as to how electronic evidence is to be handled in federal litigation. This includes guidelines on how companies can be exempted from providing data that isn’t reasonably accessible, which could lessen the burden of electronic discovery.

Third Party Coverage Is a Key Coverage of Employment Practices Liability Insurance

The purpose of third-party coverage in an Employment Practices Liability (EPLI) policy is to protect an organization and its employees from accusations of wrongful acts committed against customers, clients, vendors, and suppliers. Some EPLI policies also cover wrongful acts committed by third parties against the insured’s employees.

Harassment and all forms of discrimination are covered under wrongful acts. Discrimination claims include discriminatory practices against a person based on their race, religion, age, sex, national origin, disability, pregnancy or sexual orientation. Harassment involves unwanted sexual advances or requests for sexual favors. Both verbal and physical conduct, as well as other forms of harassment that create a hostile or offensive work environment, are covered. Some policies also cover accusations of mental anguish, emotional distress, humiliation and assault.

If your organization has a lot of interaction with the public, it is especially vulnerable to third-party claims like those described above. In some cases, EPLI carriers may not provide third-party coverage to firms with a high potential for claims. What they might offer instead is limited coverage, such as covering accusations of discrimination, but not harassment claims.

To protect your organization from third-party claims, you need to go beyond just purchasing coverage. You must implement policies and procedures that address discrimination and harassment issues, both from the standpoint of an employee’s actions and the actions of third parties. EPLI insurers are increasingly requiring employers to implement these practices before they will issue a policy.

Having policies in place will offer little help to stop third-party claims if employees aren’t adequately trained. New employee orientation programs should include a presentation outlining the organization’s harassment/discrimination policies. The training must also include how to report and handle a third-party claim. However, hearing the information once is not enough to insure compliance. Employees must be periodically retrained through departmental meetings. To maintain the effectiveness of departmental training sessions, be sure that supervisors are provided with copies of all policy updates and procedural changes.

One important caveat to keep in mind is that most EPLI policies don’t provide third-party coverage for accusations involving the violation of the Americans with Disabilities Act. Nevertheless, you should review your EPLI policy’s definition of a claim to determine the policy’s interpretation. Many policies define a claim as a “demand for monetary damages.” This definition can present a problem in an ADA claim, because many of these claims are asking for reasonable accommodations, not monetary awards. That’s why it is important to ensure that your policy’s definition of a claim includes claims for non-monetary damages. A policy with this expanded definition will cover defense costs and indemnity connected with an ADA claim, but will not provide the funds to bring your organization into compliance with the provisions of the law.

Proper Maintenance Can Help Businesses Prevent Weather-Related Slips and Falls

It’s that time of the year when snow, sleet and ice are a fairly common occurrence in many parts of the country. Such weather conditions pose serious problems for business owners because walkways become slippery and increase the chances for employees and customers to fall.

While you can’t control the elements, you can reduce your liability by staying alert and eliminating hazards that cause falls. One such hazard is the accumulation of ice and snow that results because deicing measures were inadequate or not properly applied.

The first step in effectively deicing a walkway is to choose the correct treatment. When selecting chemicals to melt ice, keep the following points in mind:

·   Rock salt is the most common method and the least expensive of the ice-melting chemicals. It is easy to find and can melt snow and ice until the temperature drops below 20є F. Rock salt, however, also releases a large amount of chloride when it dissolves. This chloride can pollute streams, rivers and lakes and kill vegetation. It also causes metal to corrode.

·   Calcium chloride is a deicing agent that is manufactured in small, round, white pellets. It melts snow and ice even when the temperature falls below 0є F. It is much less toxic to plants than rock salt, but it can still damage them if applied too heavily.Calcium chloride can corrode concrete.

·   Potassium chloride is a deicing chemical that doesn’t irritate skin or harm vegetation. However, it only melts ice when temperatures remain above 15є F. It must be combined with other chemicals to melt ice at lower temperatures.

·   Magnesium chloride melts snow and ice until the temperature drops below -13є F. It releases nearly 40 percent less chloride into the environment than either rock salt or calcium chloride. It is also less damaging to concrete surfaces and is less toxic to plants, trees and shrubs.

Once you have selected your deicing agent, follow these tips from the Iowa Transportation Center at Iowa State University to be sure you maintain an ice and snow-free walkway:

·   Apply deicing chemicals before a storm and remove snow/ice during and after the storm. Use plenty of deicing materials. Using too little will leave patches of ice.

·   Aim for evaporation. If the water can drain and there is full sun or even reasonable wind, the ice will evaporate. Dry pavement is a clear indication there is no ice.

·   Use a friction additive. Sand is the most popular because it’s inexpensive. Use enough to ensure that anyone walking on the surface has enough traction.

·   Check and treat surfaces every morning, especially around snow piles where melting may have created new problem areas. Reevaluate during the day and re-treat as needed.

·   Remember that a clean-looking surface is only “safe” if it is dry. A wet surface can quickly become icy in the shade or overnight.

·   Train those responsible for safety procedures how to safely maintain walkway surfaces during icy/snowy weather.

What Should You Consider When Shopping for Lawyer’s Professional Liability Insurance?

Controlling expenses is an important consideration in the management of any law firm, so it isn’t unusual that a firm shopping for liability coverage would take premium rates into consideration. However, even though rates are important, they shouldn’t be the overriding factor in your decision to purchase a particular policy. There are a number of other aspects you should consider to ensure you receive the best coverage for your premium dollar.

The first of these considerations is whether your policy has eroding coverage.  In some liability policies, the coverage limits include defense costs. When you file a claim, the amount of coverage for settling the claim or paying a judgment against you decreases as you incur defense costs. This type of policy is referred to as having defense costs “inside” the policy. There are policies in which the defense costs are “outside” the policy, which means they are not subtracted from the amount of coverage. In some cases, policies with outside defense costs have a cap after which the defense costs are subtracted from coverage limits.

The second consideration is whether the policy deductible includes defense costs. If the deductible is only applied to liability, the insured firm doesn’t have to pay it until there is a settlement/judgment. However, if the deductible includes defense costs, the insured pays as soon as defense expenses begin to mount until the deductible is paid in full.

Another condition that you will want to note is whether your carrier can settle a claim without your consent. Some policies have what is known as a “hammer” clause that prevents the insurance company from settling without the consent of the insured. There is an extenuating circumstance to this clause in that, if the insured refuses to consent, the carrier is only liable for the amount for which it would have settled.

You also need to determine if your policy gives you the right to select your own defense counsel. More than likely, if you are a small firm your carrier will retain the right to choose your defense counsel. This doesn’t mean that you won’t have any input at all. Most insurance companies have a panel of defense attorneys and generally allow the insured to select from this panel. Larger firms can typically select their own counsel but the carrier must approve.

All current Lawyer’s Professional Liability policies are issued as “claims-made” policies, which means that a claim must be made and reported to the carrier within the life of the policy. To prevent coverage gaps if your firm is changing policies, you should select a new policy that has a “prior acts coverage” clause. This will extend your coverage so that any claims that existed before the new policy started will be covered. If you don’t have prior acts coverage, your former claims-made policy will not cover claims that developed after it expired and your firm will be without coverage for those claims.

A number of changes in both federal and state court procedures have made sanctioning more commonplace. The cost to defend your firm against a sanction or to pay the monetary penalty associated with it can be extremely expensive. That’s why you will want to ensure your liability policy provides coverage for these occurrences.

The final consideration is whether the policy requires a new deductible if there are multiple claims made in the same policy year. Some policies only require the deductible to be applied to the first claim made in a given policy year. Other policies treat the deductible on an aggregate basis. The policy will stipulate a specific deductible dollar amount per claim, with a cap on the total deductible dollar amount in the aggregate that the insured will have to pay before coverage begins. If neither of these scenarios is spelled out in your policy, your coverage most likely requires applies deductible for each claim.

Workers’ Comp Employer Costs Rose Faster Than Benefit Payments in 2004

According to a study released in July 2006 by the National Academy of Social Insurance, employer costs for workers’ compensation grew faster than combined cash and medical payments to injured workers in 2004, the most recent year for which data is available. Combined benefit payments for injured workers increased 2.3 percent in 2004 compared to prior year levels, while employer workers’ compensation costs rose by 7.0 percent for the same period.

Combined benefit payments fell by 3 cents for every $100 of covered wages, from $1.16 to $1.13. The chief contributor to this decline was the state of California, where benefits dropped by 10 cents per $100 of covered wages. Nationally, premiums paid for workers’ compensation insurance rose by 3 cents per $100 of covered wages, to $1.76 in 2004. The increase was the smallest annual increase since 2001.

Despite the recent rise in costs, both costs and benefits in 2004 remain far below their peak levels. Total benefits were at their highest in 1992 at $1.68 per $100 of covered wages, 55 cents higher than the 2004 figure. Employer costs were highest in 1990 at $2.18 per $100 of covered wages, 42 cents higher than in 2004.

Since 2000, the rise in benefit payments has resulted from increased spending for medical care. Spending for medical treatment rose from 47 cents in 2000 to 53 cents per $100 of covered wages in 2004. Spending for cash payments to workers remained the same during this period at 60 cents per $100 of wages.

There are specific actions employers can take to curb workers’ compensation costs. The first step is to examine accident records for the past three years. Take each year’s reports and examine as a whole. While reviewing look for specific accident causes and note hazards that should be remedied. You should also be looking for injury repetition and in which department injuries frequently occurred.

The next step is to conduct a physical analysis of the workplace. Utilize your health and safety committee as the catalyst, but be sure workers are also involved. Look for equipment hazards that need replacement or repair. Then search for environmental hazards such as chemical exposures, noise, temperature and ventilation issues.

The third step is to look for task or ergonomic hazards. Request employee input to encourage workers to take ownership of safety in their departments. When workers provide input, make sure actions resulting from their suggestions are documented in health and safety committee minutes and posted on bulletin boards in common areas. If employees do not feel their suggestions matter, they won’t bother to suggest improvements in the future.

Worker Found Eligible for Compensation from Seizure Related Injury

In an August 2006 ruling, Connecticut’s Supreme Court ruled that the claimant in the case of Michael G. Blakeslee Jr. vs. Platt Brothers & Co, who was injured when co-workers tried to help during a seizure, is entitled to workers’ compensation benefits. Typically, workplace injuries caused by a seizure wouldn’t be eligible for compensation because the injuries arise from the medical condition itself and not from conditions in the work area. In the Blakeslee case, the claimant received two dislocated shoulders on February 13, 2002, when three co-workers tried to restrain him during his seizure. He had fallen near a large steel scale, and then started flailing his arms and legs as he regained consciousness.

The claimant filed a workers’ compensation claim contending that because the actual injury resulted from the restraint, and not the seizure itself, the shoulder injuries should be covered. The claimant argued that an injury received during the course of employment is eligible for compensation even if infirmity due to disease originally set in motion the final cause of the injury. The claimant also asserted that an injury inflicted by a co-employee is eligible for compensation, unless the injured employee engages in unauthorized behavior or the injury is the result of an intentional assault.

Initially, a workers’ compensation commissioner decided that Blakeslee was not entitled to workers’ compensation benefits. The commissioner determined that the claimant’s injuries resulted from a chain of events set off by a grand mal seizure unrelated to his employment. A workers’ compensation review board agreed with the finding. The review board stated that there is a prerequisite requirement for eligibility for compensation, which the claimant overlooked. The cause of the injury must arise out of the employment and work conditions must be the legal cause of the injury. The review board contended that the claimant’s seizure caused the need for first aid, which caused the injury. There was no element of the claimant’s employment involved.

Five out of seven Supreme Court justices reversed the board’s ruling. They were not persuaded by the argument posed by Platt Brothers, and the employer’s insurer, Wausau Insurance Co., that finding for the defendant would be in direct opposition to public policy because it would prevent employees from assisting co-workers in future medical emergencies. The majority noted that the co-workers restrained Blakeslee to keep him from harming other employees as well as himself. Their actions benefited the employer. The action was directly related to the employment and would therefore be eligible for compensation.

The two dissenting justices argued that the Supreme Court should not have accepted review of the case. 

What Factors Influence Malpractice Premiums?

According to a November 2005 article published in the Insurance Journal entitled, “How to Write the Diverse Business of Lawyers Professional Liability,” between $1.5 and $2 billion is spent annually on Professional Liability coverage. With numbers such as these, it is important that any firm in the market for this insurance understand the factors affecting coverage rates.

Determining premium rates is a complex matter based on a combination of factors. However, there are two main factors insurers review when underwriting an insurance application. The first is your geographic location, because each state has a different risk assumption.  The level of risk is measured by the number of suits brought against other lawyers in your area. The second important factor is your practice area(s). You can expect to pay more for coverage if you specialize in high-risk areas such as securities, banking and/or real estate.

Other factors that insurers consider include:

·                                Liability limits and deductibles selected

·                                Breadth of coverage desired (prior acts, extended reporting, etc.)

·                                Number of attorneys covered

·                                Personal claims history of your firm’s attorneys

·                                Length of time covered attorneys have been associated with your firm

·                                Number of malpractice prevention controls utilized by your firm

The length of time covered attorneys have been associated with your firm is important, because insurers typically use step rates to calculate premiums for a new attorney.  Risk exposure increases during the initial years that an attorney practices as the number of potential plaintiffs increases with every new case. After a certain point, this risk flattens out.  So premium rates on a new attorney will automatically increase in set steps until the risk exposure matures.

It is also important to realize the significance reinsurance holds in determining premiums. Insurance is a way of transferring risk. You transfer risks to an insurance carrier, and the carrier will often transfer some of that risk to another company. By reinsuring, a carrier increases its capacity to underwrite more policies.  When reinsurance rates rise, the increased cost can be transferred to you in the form of higher rates.

Hiring the Disabled: What Are Reasonable Accommodations?

The question of how far an employer must go to accommodate a disabled employee is at the very heart of the Americans With Disabilities Act.  Answering that question starts with understanding the term “reasonable accommodations.”

An accommodation is any change in the physical workplace, or in the methodology usually employed to perform a job, that allows a qualified individual with a disability to apply for and hold that particular job.

 There are three categories of reasonable accommodations:

  • changes to a job application process that enable a qualified disabled applicant to be considered for the position.
  • changes to the physical work environment, or to the manner in which a job is normally performed, that permit a qualified disabled individual to perform the essential functions of that job.
  • changes that allow a disabled employee to take advantage of all of the benefits and privileges of employment in the same way that all non-disabled employees do.

The term “reasonable” refers to the change being “feasible” or “plausible.”  The only exception to an employer’s obligation to provide reasonable accommodation is if it would cause “undue hardship” to the employer.  Undue hardship means that an employer would face great difficulty or expense to make the accommodation because they lack the resources or ability to provide the requested accommodation.  Undue hardship also refers to reasonable accommodations that are so extensive, substantial, or disruptive, that they would fundamentally alter the nature or operation of the business.

Keep in mind that in spite of the undue hardship clause, there are still a number of reasonable accommodations that do change operations, on some level, that the employer is required to make.  The majority of them have to do with job performance:

  • Job Restructuring – While an employer never has to reassign essential functions of a job in order to accommodate a disabled employee, they are required to reassign secondary job functions that an employee is unable to perform because of a disability.  They must also change when and how any function is performed, whether it is essential or secondary, to accommodate a disabled employee.

By the same token, if an employer restructures a job to eliminate some secondary functions, the employer can require the disabled employee to assume other secondary functions that they can perform.

  • Leave – Allowing the disabled employee to use accrued paid leave or unpaid leave when it is necessary because of their disability is another reasonable accommodation.  An employer does not have to provide paid leave beyond that which they normally provide to employees.  Employers can allow a disabled employee to use all of their accrued paid leave before providing unpaid leave.
  • Modified Scheduling – This includes changing arrival or departure times, providing periodic breaks, and changing the time certain functions are performed.  An employer must provide a modified schedule for a disabled employee, even if  they don’t provide such schedules for other employees unless it represents an undue hardship.
  • Modifying Personnel Policies – It would be a reasonable accommodation to modify a policy requiring employees to schedule vacation time in advance if a disabled employee needed to use accrued vacation time immediately because of disability- related medical problems, unless it presents an undue hardship.  In addition, an employer may be required to provide additional leave to an employee with a disability in spite of their leave policy, unless it presents an undue hardship.
  • Reassignment – Reassignment to a vacant position for which the disabled employee is qualified is also considered a reasonable accommodation.  This must be provided to an employee whose disability makes it impossible for them to continue to perform the functions of their current position.  The only exception is if the employer can prove that it would cause an undue hardship. 

Changes in First Aid Recommendations for the Workplace

First Aid training is probably the only type of instruction an employer provides that everyone in the workplace hopes never to need. However, when an injury or illness strikes, knowing how to effectively administer proper First Aid can be the deciding factor between a quick or a lengthy recovery, a temporary or permanent disability, and in some cases, life or death. That is why it is imperative to be familiar with common First Aid procedures. It is equally significant to learn the correct way to administer aid procedures so they are safe to perform.

In an attempt to discredit some of the faulty notions that have developed concerning current First Aid treatment recommendations, the American Safety & Health Institute (ASHI) along with 25 other nationally recognized organizations joined together to form the 2005 National First Aid Science Advisory Board (NFASAB). The Board’s mission was to review and evaluate the existing scientific literature on First Aid to determine the most effective treatments for common workplace injuries. They reviewed data from the U.S. Centers for Disease Control and Prevention, Cochrane Reviews, which are evidence-based evaluations of the effects of health care treatments, the U.S. National Library of Medicine, and medical journals and textbooks.

As a result of the Board’s review and evaluation of this data, they recommend the following procedures:

  • If an employee is bleeding, apply pressure firmly for an extended period of time, until either bleeding stops or paramedics arrive . Earlier guidelines also recommended elevating a bleeding limb above heart level and, if direct pressure was ineffective, pressing on specific arterial points. Actual evidence is insufficient to recommend for or against these practices and also the use of tourniquets .
  • Thermal burns should be treated with cold water as soon as possible, but direct application of ice to a burn area can cause harm. Avoid cooling burns with ice or ice water for longer than 10 minutes, especially if the burn covers more than 20% of a person’s body.
  • If an employee has a soft-tissue injury such as a sprain, strain, contusion or fracture, apply cold to the injury to decrease hemorrhage, edema, pain and disability. Cooling is best accomplished with a plastic bag or damp cloth filled with ice, which is more effective than re-freezable gel packs. To prevent injury, limit each application to periods of no more than 20 minutes and place a barrier, such as a thin towel, between the ice container and the skin .
  • To prevent a minor wound from becoming infected, cleanse the wound with clean tap water until all foreign matter has been flushed. Apply triple-antibiotic ointment or cream only to a scratch or superficial wound. Previous methods recommended applying antibiotic to all wounds no matter how deep.
  • Do not give water, milk or syrup of ipecac to someone who has ingested poison. Previous guidelines allowed use of these substances in certain cases after consultation with a poison control center, but they may be harmful and are not recommended now.

By keeping yourself and your employees up to date with basic First Aid care, as well as maintaining a well-stocked First Aid kit on-site, you can significantly reduce the chance of a severe trauma that could have been prevented by simple First Aid. 

Self-Insuring Workers’ Compensation Plans May Produce Premium Savings

Joining a workers’ compensation group self-insurance program may be a significant means for small and mid-sized employers to reduce operating costs. Such plans deliver savings by providing employers with considerable control over losses, medical care and rehabilitation, plus improving cash flow.

While some companies self-insure workers’ compensation programs individually, these are usually best suited for larger corporations with immense assets. For smaller and medium-sized businesses, a Group Self-Insurance (GSI) workers’ compensation plan is more suitable. A GSI is a non-profit association of employers formed for the specific purpose of providing workers’ compensation coverage. A GSI enables employers to assume a major portion of their risk and provides group purchasing power for excess insurance to cover individual losses or in the aggregate in excess of a specified amount.

Workers’ compensation is well suited for self-insurance plans because claims are typically of low severity but high frequency, which allows losses to be predicted with some accuracy. Further, payment for large claims can be spread over several years, which benefits a company’s cash flow. GSI programs enable companies to better manage safety programs and have more direct involvement in seeing that employees receive prompt medical care when injured, and employers are able to exercise closer monitoring of the return of the employee to work.

Requirements for joining or forming a GSI vary considerably from state to state. Some states do not allow GSIs and in other states, companies must meet certain solvency standards and provide financial and loss data to be considered. Also, if a company has operations in more than one state, GSIs must be setup in each state. A GSI in one state will not cover losses in another state.

Besides improved cash flow, the major benefits that come from joining or creating a GSI are enhanced loss experience through more effective loss prevention, loss control and managed care programs; reduced administrative costs, and interest income earned on premiums. GSIs in most states do not have to pay premium taxes and or be assessed for residual workers’ compensation market losses.

Members of a GSI pay a premium to the group based on their exposures, classification codes, payroll, experience modifications, and rates developed by a state’s workers’ compensation rate making bureau. At the end of the contract year, any surpluses from both the claims fund and the administrative expense fund can be returned as dividends to group members.

GSIs handle claims following guidelines of the state workers’ compensation laws. Often, third-party administrators handle loss prevention and control, case management, accounting, investment and actuarial services.

An agent can provide guidance to employers wanting to explore joining a GSI. An interested company should first seek management commitment as joining a GSI requires careful attention to the entire workers’ compensation program rather than shifting these responsibilities and duties to a private insurer. Also, an employer has to be willing to disclose detailed information regarding its finances, support systems and ongoing risks.

While GSIs offer important advantages, there are some disadvantages. Members of the group are usually jointly and severally liable for losses incurred by the entire membership. A bankruptcy or dissolution of a member does not release the remaining members from liability. If the GSI’s retention and excess insurance are exhausted by a catastrophic event, the group members must contribute their pro rata share of the total loss. And, if a GSI has a pattern of liberal underwriting for new members, it’s possible it will have financial deficiencies in the future.

If an employer understands the additional risks it assumes as well as the added reporting and administrative duties when it joins a GSI program, the end result could be a significant reduction in overall costs for workers’ compensation.

Protect Your Business with Building and Equipment Insurance

If you are a business owner, you have undoubtedly heard of building and equipment insurance, which covers your business’ buildings and all personal property under the care or control of your business.  Even so, you may not yet be aware of everything else this insurance covers, and just how important it can be to you and to your business.

For instance, did you know that building and equipment insurance covers additions, alterations, and even repairs to your buildings?  This type of insurance also covers items and equipment used to maintain your business’ property.

Giving this type of coverage a second thought now?  You should.  Building and equipment insurance also provides coverage for furniture, fixtures, equipment and machinery; stock; all other personal property you and your business own and use in the business; labor, parts, or service by your business on other’s property; and improvements you make to the building you or your business lease.

Similar to the personal property you own, the coverage also includes personal property inside and outside your business’ buildings, or in vehicles within 100 feet of your buildings.  And, interestingly enough, payment for damages done to personal property owned by others goes to the account of the property owner and not to the actual insured business owner.

There are a few types of property excluded from this coverage, and you should be aware of them.  The types of property excluded from this coverage include: waterborne personal property; animals (in most circumstances); automobiles for sale; bridges, roads, walks or other paved surfaces; contraband; costs for excavations; certain foundations; land, water, growing crops, or lawns; money; piers, wharves, or docks; retaining walls that are not part of the building; and underground pipes, flues, or drains.

However, you can obtain additional coverage for your business’ outdoor property, valuable papers and records, the personal property or effects of others, personal property at newly acquired buildings, property temporarily off-premises, and newly built or acquired buildings.  Keep in mind, though, that several of the categories may have limitations about which you need to be educated.

Preventing Violence Before It Happens Through Pre-Employment Screening

Violence in the workplace has become an increasingly more common occurrence. According to the Bureau of Labor Statistics in its 2004 report entitled Fatal Occupational Injuries by Event or Exposure, 1998-2003, there were 631 documented workplace homicides in 2003. Workplace homicides are the second leading cause of death in the workplace and they make up 16% of all occupational fatalities.

With statistics like these, it is the duty of every employer to make violence prevention a number one priority. Avoiding potential violence should begin with the hiring process. This is the company’s opportunity to weed out any violent individuals before they get a foothold in the workplace.

The pre-employment screening process begins with the application. If an applicant omits information or there are gaps of time in the area of job history, the applicant should be instructed to fill in the missing information. If the applicant cannot provide the information, the employer needs to determine when and if it can be provided, note it on the application and then follow through with getting the information if the person selected is to be given an employment offer. Ensure that all of an applicant’s information is on hand before any offer is made.

The interviewer will have the most significant opportunity to assess the applicant’s stability. Begin with the person’s overall physical appearance and grooming. Is it interview appropriate? The next level of assessment involves body language and eye contact. While the applicant is speaking, are they looking you in the eye while answering questions in a relaxed manner? What is your own comfort level during the interview? What is the applicant’s response level to questions? Do they answer the questions asked or are they evasive? Do they provide too little information or do they go out of their way to give an elaborate explanation? By discussing what an applicant liked or disliked about the tasks associated with different jobs they held and why they left those jobs, an interviewer can often get a sense of possible aggression towards the company that if pushed far enough can manifest itself in workplace violence.

If the applicant seems acceptable, then the next step is to do a thorough background check. This is the major area where most companies fall short in the evaluation process. If you do not get an immediate response from a past employer or a reference, follow up until you do. Don’t assume that the failure is due to being too busy to respond. Sometimes the lack of response is avoidance. It is not unheard of for one company to pass a problem employee off on another. To investigate further, in addition to the telephone background check, you can also examine court records, credit reports and driving records.  However be advised that you need a signed release from the applicant to conduct this type of background screening. Your corporate counsel should be your consultant in the development of any pre-employment screening methodologies to be sure they do not violate existing laws.

Many companies also conduct drug testing as part of their pre-employment screening process. Drug testing identifies individuals who have the potential to become problem employees.  It is easier to eliminate individuals on the basis of failing a drug test prior to employment then it is to terminate them once they have been employed. While drug testing doesn’t eliminate all potential problem employees, it does reduce their number.

No matter what procedures you use to screen applicants, the important thing to remember is that you must follow through. If you only make a half-hearted attempt, it’s the equivalent of no attempt at all. 

Understanding Material Safety Data Sheets Can Save You from Injury

For many workers, handling hazardous chemicals is part of their daily routine. However, no matter how routine, you should never let your guard down when it comes to handling chemicals properly. Each chemical has its own set of hazards, which means the recommended emergency procedures for each chemical are different. If you are going to handle chemicals safely, you should be aware of the manufacturer’s recommended handling and storage procedures, the personal protective equipment you will need when handling, and the actions to take in the event of a chemical spill or leak.

You can find this information on the “Material Safety Data Sheet” (MSDS), which must be sent from the manufacturer/supplier along with the chemical. OSHA requires all chemical manufacturers/suppliers to provide customers with MSDS’s that answer the questions listed above. However, OSHA does not require that MSDS’s be written in a standard format and most are written in technical language, which can be difficult to understand.

Realizing the need for standardization, The American National Standards Institute (ANSI) and the Chemical Manufacturers Association developed a standard format for MSDS’s. While its use is voluntary, many chemical manufacturers/suppliers have already adopted this format. The information provided by this format is broken down into the following sections:

Section 1 lists the manufacturer’s name, address and telephone number, the product name, the generic names for the chemical, the commonly used industry name and possibly, an emergency telephone number.

Section 2 provides information on the chemical’s ingredients. OSHA requires that all hazardous components be listed on the MSDS. Non-hazardous ingredients are usually included too if helpful in determining how to use and store the chemical.

Section 3 identifies the hazards of the material. This section is divided into two sub-sections. The first sub-section provides an overview and the second sub-section discusses the potential health effects of the chemical.

Section 4 describes basic first aid procedures to be used by a worker with no specific training in first aid. Instructions are provided for each type of potential exposure.

Sections 5 and 6 provide information, precautions and instructions to fight fires caused by the material, including hazards the material presents when burned and what methods can be used to extinguish flames.

Section 7 addresses risk prevention when working with the material, including proper storage procedures.

Section 8 discusses controls and protective equipment.

Section 9 describes the physical and chemical properties of the material.

Section 10 contains information on stability and reactivity of the chemical including whether the chemical has the potential to react with another substance due to oxidation, heat, decomposition or polymerization.

Sections 11 through 13 outline toxological and ecological information, including how to dispose of the chemical.

Sections 14 through 16 explain methods to transport the chemical.

Material Safety Data Sheets are important tools when working with hazardous chemicals. Of course, a tool is only effective if you understand how to use it. Be sure you know where the MSDS’s are kept for the chemicals you use and familiarize yourself with them. And most importantly, know where you can find the emergency information on all of the MSDS’s for chemicals in your work area.

Certificates of Insurance – A Prudent Means to Avoid Costly Claims

More and more companies are hiring independent contractors to handle not only administrative matters, such as benefits and human resources, but also sales and distribution. With this delegation of authority to third-party suppliers comes less direct control over these operations, and greater becomes the need for clients to demand that vendors provide them with timely Certificates of Insurance (COI).

The COI proves that the insured (the third party) has purchased the insurance coverages as required by the outsourcing client. But, the COI also states that the holder of the certificate has no legal right to be covered by the insurance described in the COI, nor does it amend, extend or alter the represented coverage. The COI only shows that the outside contractor has the insurance coverage as explained on the certificate. This protects the business that has contracted with the third party against liability for negligence caused by the independent contractor up to the limits of the policy.

It is the responsibility of the independent contractor to provide the COI to the client that has hired the firm. Usually a COI is prepared by an agent/broker with a copy sent to the insurance company and the client for whom the third party has contracted to perform certain functions.

The COI contains the name of the insured, the name of the insurance companies issuing the policies as stated on the COI, what specific coverages are contained in the insurance policies issued to the insured, and various descriptions of normal policy terms, exclusions and conditions.

Most often COIs are obtained for commercial general liability to provide protection from liability arising out of the insured’s premises or operations, products and completed operations. Usually, a general form will provide broad, standardized coverage terms. In cases, where the coverage is more complex and of a higher risk, manuscript forms of a COI can be written specifically by or for an insurance company. These manuscript COIs should be reviewed carefully for the scope of coverage being provided.

There are two types of general liability forms — claims-made and occurrence. The trigger that compels the policy to respond is the main difference between the two forms. In the occurrence policy, occurrences are covered that take place during the policy period, no matter when a claim is reported. A claims-made policy requires that the occurrence take place during the policy period and the claim be reported during the policy period. Most COIs use the occurrence form for all independent contractors as claims-made policies limit coverage.

But simply having a COI in hand does not always mean that the independent contractor has the insurance coverage. A prudent practice is to have a system to audit, review and correct the certificates to reflect the provisions in the contracts. Some clients establish an auditing program in house, while others have the insurance agent or broker manage the program as part of their fee arrangement. This cost depends greatly on the workload.

The consequences of not monitoring COIs of a third party can be costly for the firm that hired the contractor. Consider this sobering example. A business hired an independent contractor to provide distribution service for the company. An employee of the vendor had a serious car accident, and soon afterwards, the contractor ceased business. When the employee began submitting workers’ compensation claims, there was no coverage — the contractor had never maintained that insurance. Unfortunately, the company had not insisted on a COI from the independent contractor to verify this coverage. Casting about for payment of the claim, the court ruled that the vendor’s employee was a statutory employee of the company that hired the contractor. The workers’ compensation claims have totaled more than $100,000 with more to come.

This is just one of many chilling cases of companies that have been caught with unexpected losses that came from not requiring proper COIs from independent contractors and auditing them to make sure they remain current and reflect the actual coverages held by the insured.

Good Management Lowers Premiums

How do insurance companies measure good management? And, how does this measurement affect policy premiums?

Insurance companies judge management many ways, including attitude toward safety (cooperation with risk personnel), financially (credit checks), superficially (housekeeping, deferred maintenance), and in depth systems analysis (employee selection process). Positive results earn schedule credits, which reduce premiums.

Schedule credits enable insurance companies to reward those conscientious managements that have a long-term commitment to reduce losses. The insurance company wants to partner with risk-avoiding management, so they lower premiums to attract these risks.

Insurance companies use diagnostic tools to measure the quality of management. Accounting measurements, physical property surveys, human resource surveys, psychological tools and, of course, loss history data combine to paint an overall management picture.

Accounting measurements include reviewing financial statements, credit reports, tax forms, and management control systems. Is everything up to date? Do all the data agree for an easy audit trail? Is the company candid about finances?

Physical risk surveys include a report on management results. An untidy workplace suggests lazy management or an undisciplined workforce. Neither is good for business or loss prevention. If in-house automobile maintenance facilities are not kept neat, management attitude towards maintaining vehicles properly is questioned.

Neat, orderly premises imply pride in ownership and professional management. Deferred maintenance and chaos suggest either poor management, the beginnings of bad credit or absentee, uncommitted ownership.

Sincere interest in loss control surveys, suggestions and recommendations indicates cooperation. Safety is a function of cooperative efforts. Taking corrective actions when asked, keeping OSHA logs up to date, knowledgeable responses to claims questions and having safety equipment on hand and up to date all indicate a safety culture appreciated by insurance companies.

How does the company handle employee recruitment and training, particularly drivers? If this system qualifies employees in terms of knowledge, skill sets and attitude, more appropriate employees will be selected. The insurance company wants evidence of ongoing training for job-specific skills and safety.

The psychology of risk management involves assessing the company’s approach towards safety and loss control. Cooperation, responsiveness to recommendations, forthrightness in interviews, openness to inspections, commitment to safety and good record keeping contribute to management attitude.

The company interested in long-term profitability does not skimp on loss control or maintenance. Easily administered systems remind employees and supervisors of their safety culture.

All these data are collected and reviewed to determine the management input to insurance premium rating: schedule credits. These credits must be rationalized by the underwriter. Schedule credits can impact premiums up to 25%. Good management pays well.

Schedule credits are earned by well-managed, safety-conscious companies. Unfortunately, poorly managed businesses earn debits, increases in premium, the same way.

Take a look around your business today and think about how you can earn a few more credits. And remember, we’re here to help too. 

Tips to Prevent Sprains and Strains At Work

Many jobs require lifting and pushing in one form or another as part of the routine job description. Employees that frequently lift or push objects need to be aware that lifting, pushing, and over reaching can cause strains and sprains. Such injuries typically affect the back, arms, and shoulders and are caused by improper handling techniques. If your job requires you to push, pull or lift during the day, make sure you know how to perform these activities properly.

The first issue to keep in mind is that most strains and sprains happen because people lift objects that weigh too much. Before lifting anything, size up the load to determine if you have the physical strength to lift without straining. If you don’t possess the physical capability, you can either break it down into smaller loads, if applicable, or seek help from a co-worker. If you use carts or hand trucks, be sure they are in good operating condition. These devices can put additional strain on your back if they don’t work correctly or if you overload them.

If it is within your physical capability to lift the load, then be sure that you use the correct procedure. Stand close to the object. Then squat down and bend your knees, not your back. Grip the object firmly and lift slowly. As you lift, straighten your legs until you are standing erect. Carry the load close to your body near your waist. Never lift the object above your shoulders. If you have to turn while lifting, point your feet in the direction you’ll be heading; don’t twist your back.

If you must push or pull a load, bend your knees and use your legs and the weight of your body to move it. Take small steps and keep your stomach muscles tightened. You should lean slightly into the load if you are pushing, and lean slightly out if pulling. Note that it’s always better for your body if you can push rather than pull an object.

Repeatedly lifting heavy objects is the most common cause of strains and sprains. However, injuries can also happen as a result of lifting moderate loads in awkward positions or remaining in a bent-over or twisted position for long periods of time. Remember, the further the load is from your body, the greater strain placed on your back. You should always attempt to position any load you are carrying at waist level. Keep your body as close to the work area as is safely possible. And most importantly, never overestimate your physical ability to lift or carry an object.

Is Your Intellectual Property At Risk?

Intellectual property is the crown jewel of any business, no matter its size. That’s why R&D departments exist and also why companies incur great expense to obtain patents. In fact, the race to innovate has heated up dramatically. But as Tom Aeppel noted in an October 25, 2004 The Wall Street Journal article entitled “Patent Dispute Embroils Industries,” the growing drive to be first has also ushered in another phenomenon:

“The number of U.S. patents issued annually has more than tripled over the last two decades to 187,017 in 2003 as companies try to distinguish themselves among other global competitors with new products or processes.  But patents are also the source of growing litigation. There were 1,553 patent-infringement lawsuits filed in 1993 in U.S. federal court, compared to 2,814 last year.”

In the past, many businesses relied on the coverage provided under the advertising injury portion of their comprehensive general liability insurance to protect them if they were accused of violating intellectual property. The parameters of advertising injury in these polices included coverage for the unintentional acts of misappropriating advertising ideas, or the infringing upon copyright, title or slogan that occurred during the course of advertising goods, products, or services. However, since most companies’ activities go well beyond the scope of what could realistically be defined as advertising, the protection provided by commercial general liability is obviously too limited in this area to be of real value. Under the typical commercial general liability policy, infringement of intellectual property claims that resulted from activities other than advertising would not be covered. By the same token, intentional acts of infringement are also not covered.

The gap between what is and what is not covered in terms of intellectual property infringement under commercial general liability presented a serious problem as competition increased. That’s why insurers developed a specialized type of coverage called Intellectual Property Insurance. This type of coverage has two forms. The most popular form is defense coverage. This is designed to underwrite both the cost of mounting a legal defense against an intellectual property infringement lawsuit and the cost of any settlements or judgments that result from it.

The second type of coverage is called enforcement or pursuit coverage. This policy is for the party that has been wronged so that it can pursue anyone that has infringed upon its intellectual property. This type of coverage is especially appealing to a company that has a valuable patent, but may not be positioned in terms of its capital to exploit that patent’s potential as well as one of its larger competitors. Having this coverage safeguards the company’s intellectual property rights while it acquires the capital it needs and enables it to go after a competitor who violates those rights.

Losing one’s intellectual property can mean the death knell in the current global economy. As companies find themselves having to compete both domestically and in emerging markets abroad, it’s clear that innovation is the only way to stay in front of the herd. If that’s the case, then it stands to reason that Intellectual Property Insurance is one more necessity for doing business in the new economy.

Don’t Wait until a Fire Ignites on Your Construction Site to Start Fighting Fire

The wildfires experienced by Californians over the recent years are just one of the many examples we see when it comes to just how threatening and damaging fire can be. Since job site fires pose a constant threat to construction projects, contractors should prepare for a potential fire by periodically confirming that their risk management plans adequately address the issue.

Don’t wait until you actually have a fire on-site to start your fight against fire. The following tips have been recommended by the International Marine Underwriters Association to help keep construction sites free from the threat of fire:

1. No smoking – have and enforce a no smoking policy on the construction site.

2. Loss control plan – the written loss control plan should comprehensively address the risks of fire exposure and include specific objectives to be enforced by management on the job site, general safety measures, and a named person to be in charge of on-site safety coordination.

3. Inspections and logs – project managers should do daily on-site inspections of all materials and equipment, the work area, and any other nearby location with potential hazards. A running log should be kept of these daily inspections.

4. Hot works – cutting, brazing, welding, and other hot works operations should have a person designated to observe the working area, as well as areas adjacent to it. The person should maintain a line of sight and watch combustible products, sparks, and slag. The surrounding areas should be inspected for a minimum of 30 minutes after the hot works operation ceases.

5. Portable heating equipment – place all portable heating equipment on non-combustive platforms or flooring. Use recognized standards and/or the manufacturer’s specifications for ensuring the appropriate maintenance, fueling, and clearance.

6. Enclosures – construct temporary enclosures with designated paths for transporting materials. For the best results, only construct the temporary enclosure with non-combustible approved materials and locate it away from overhead exposures.

7. Flammable materials – the labeling and identification requirements of gas and flammable liquid containers should be reviewed carefully before they’re brought on the construction site. Make sure that safe storage areas for flammables have been clearly designated and that the area includes surrounding barriers and signs.

8. Firefighting equipment – keep firefighting equipment on-site and easily available at all times. The project manager should ensure that there is always a reliable water supply available for the equipment to connect to and that the equipment will adapt to local fire department equipment if necessary.

9. Rooftops – roof vents should be adequately cleaned to decrease sources of ignition like lint. Additionally, a minimum of one portable fire extinguisher should be located at-level during rooftop operations. Make sure the extinguisher has sufficient capacity for the fire risk.

Employee Crime Poses a Significant Threat to Small Companies

Research conducted by the Chubb Group of Insurance Companies revealed that over 36 percent of private companies have been victims of an employee theft within the past five years.  The dollar value of these thefts has averaged nearly $350,000. The researchers also pointed out that more companies are facing similar situations as they reduce staff and make budget cuts. Both actions motivate employees to steal funds, equipment and inventory. 

The insurer reported in its 2005 Chubb Private Company Risk Survey, that 31 percent of companies polled plan to outsource some aspect of their operations, 21 percent plan to eliminate employees, and 20 percent plan to reduce or completely eliminate some employee benefits this year. These actions will be the catalyst for an increase in employee theft.

Larger companies are better equipped to absorb the financial impact of employee crime, but theft of this magnitude could spell financial disaster for a smaller company. Interestingly, the insurer’s research shows that in spite of the possibility of losing everything due to employee theft, more than two-thirds of private companies don’t have crime insurance.

To help small businesses identify and eliminate the potential for employee theft, Chubb is offering a booklet titled “A Guide to Workplace Fraud Prevention” on its website (www.chubb.com/businesses/chubb3331.html). KPMG Forensic developed the booklet. This unit of KPMG International is made up of employees with expertise in a variety of disciplines connected with fraud detection and investigation.

One of the recommendations the authors make is to start by developing an ethical corporate culture. Have a written code of ethics that incorporate the firm’s key ethical values and be sure it is communicated to employees. Many companies also require an annual written statement from every employee that they understand the code and are in complete compliance with it.

Along with the development of an ethics code, KPMG recommends that companies develop an effective fraud response plan that includes:

·   Limiting fraud opportunities by establishing strong internal controls and limiting overrides of those controls.

·   Managing pressures and incentives to steal that are inherent in the business process to the extent possible.

·   Focusing fraud detection and prevention efforts on risks where potential financial loss is the greatest or where cumulative losses from smaller frauds may be significant.

·   Fostering a strong “perception of detection” through proactive fraud identification, detection and investigation efforts.

·   Responding to identified fraud by consistently applying a “zero tolerance” policy.

CERCLA Rights to Sue for Clean Up Costs Reinstated

In the case of United States v. Atlantic Research Corporation, the Supreme Court ruled that potentially responsible parties (PRPs) that voluntarily clean up contaminated sites may sue other PRPs to recover their cleanup costs under section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The reinstatement of this right comes after many years of federal court battles over the issues of authority and methodology for recovering cleanup costs from other PRPs.
When CERCLA was originally enacted, the courts interpreted section 107(a) as providing a method for PRPs to recover their costs from other PRPs. However, in 1986, Congress enacted the Superfund Amendments and Reauthorization Act (SARA). Section 113(f) of this law outlined explicit means for PRPs to pursue contribution from other PRPs. After the enactment of SARA, some federal courts held that section 113 was the only remedy for cleanup cost recovery. Other courts prevented PRPs from suing under section 107 of CERCLA and expanded section 113 to allow PRPs’ contributions without the need for a suit.
Section 107 makes PRPs liable for “all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe” and “any other necessary costs of response incurred by any other person.” In Atlantic Research, the United States argued that the section 107 use of “any other person” was limited to suits brought by “non-PRPs.”  That meant that Atlantic Research, a PRP, was barred from filing suit. The Supreme Court held that all the words of the statute must be “read as a whole.” They added that using the United States’ reading of the language would decrease the number of plaintiffs permitted to sue to almost zero, which would make Section 107 worthless.
Section 113 prohibits claims against PRPs who have satisfied their liability to the United States or a state in an administrative or court approved settlement. In Atlantic Research, the United States argued that permitting PRPs to seek recovery under section 107 negates the protection offered to PRPs who have settled under section 113. The Supreme Court conceded this. However, the Court stated that this “supposed loophole” would not discourage settlements because district courts would take into account any earlier settlements when assigning the level of liability to the various PRPs involved.
The Supreme Court also ruled that section 107 and 113 provide two “clearly distinct” remedies. Section 107 permits PRPs to recover cleanup costs they have incurred from other PRPs. A PRP that has satisfied a settlement agreement or court judgment under CERCLA may pursue contribution from other PRPs through section 113. The Court made clear that simultaneous recovery under section 107 and section 113 is not allowed. PRPs can’t choose their method of recovery. The appropriate remedy will depend on the circumstances in each case.

In the case of United States v. Atlantic Research Corporation, the Supreme Court ruled that potentially responsible parties (PRPs) that voluntarily clean up contaminated sites may sue other PRPs to recover their cleanup costs under section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The reinstatement of this right comes after many years of federal court battles over the issues of authority and methodology for recovering cleanup costs from other PRPs.When CERCLA was originally enacted, the courts interpreted section 107(a) as providing a method for PRPs to recover their costs from other PRPs. However, in 1986, Congress enacted the Superfund Amendments and Reauthorization Act (SARA). Section 113(f) of this law outlined explicit means for PRPs to pursue contribution from other PRPs. After the enactment of SARA, some federal courts held that section 113 was the only remedy for cleanup cost recovery. Other courts prevented PRPs from suing under section 107 of CERCLA and expanded section 113 to allow PRPs’ contributions without the need for a suit.Section 107 makes PRPs liable for “all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe” and “any other necessary costs of response incurred by any other person.” In Atlantic Research, the United States argued that the section 107 use of “any other person” was limited to suits brought by “non-PRPs.”  That meant that Atlantic Research, a PRP, was barred from filing suit. The Supreme Court held that all the words of the statute must be “read as a whole.” They added that using the United States’ reading of the language would decrease the number of plaintiffs permitted to sue to almost zero, which would make Section 107 worthless.Section 113 prohibits claims against PRPs who have satisfied their liability to the United States or a state in an administrative or court approved settlement. In Atlantic Research, the United States argued that permitting PRPs to seek recovery under section 107 negates the protection offered to PRPs who have settled under section 113. The Supreme Court conceded this. However, the Court stated that this “supposed loophole” would not discourage settlements because district courts would take into account any earlier settlements when assigning the level of liability to the various PRPs involved.The Supreme Court also ruled that section 107 and 113 provide two “clearly distinct” remedies. Section 107 permits PRPs to recover cleanup costs they have incurred from other PRPs. A PRP that has satisfied a settlement agreement or court judgment under CERCLA may pursue contribution from other PRPs through section 113. The Court made clear that simultaneous recovery under section 107 and section 113 is not allowed. PRPs can’t choose their method of recovery. The appropriate remedy will depend on the circumstances in each case.

Follow Safety Standards, And Common Sense, To Ensure Safe Scaffold Use

A scaffold is an elevated, temporary work platform that is engineered in a specific manner to support a defined weight load. Ensuring the safety of workers who utilize scaffolds, and avoiding injury to nearby people or property, requires choosing equipment that meets current safety standards, installing it as directed by the manufacturer, and using it for its intended purpose. Any tampering with the construction or weight load can result in injury or death.

The first consideration when practicing scaffolding safety is proper selection. Only use scaffolds that have been tested to the ANSI/SSFI SC 100 standard. When choosing a suspended scaffold, be sure that the hoist complies with ANSI/UL 1323 and that it has been tested and approved by Underwriters Laboratories (UL) or ETL Testing Laboratories. Parapet clamps, cornice hooks and outrigger beams should be tested to the ANSI/SSFI SPS 1.1 standard.

One of the problems associated with scaffold use is collapsing, which can result when the scaffold is overloaded or improperly assembled. Follow the manufacturer’s instructions concerning loading. Evaluate the weight of the workers and materials that the scaffold will support, and determine if the buildings or structures that may be used to support the scaffold are adequate for that weight load.

Another common accident involving scaffolds is overturning or tipping, which can occur if a scaffold is not properly tied. The general rule is that ties must be installed if the scaffold height, as measured to the uppermost platform, is greater than four times the smallest base dimension. Cantilevered platforms, such as side brackets and hoist arms, can exacerbate the problem of overturning and may require that the scaffold be tied at lower points. Additional ties may be necessary if an enclosure is put on the scaffold, because any enclosure, even an open mesh one, increases wind loading, which can cause overturning.

Scaffolds should be equipped with toeboards to avoid injuries to the people and property below from falling tools, materials or debris. The ANSI/ASSE A10.8 standard says that toeboards are required with guardrail systems on all open sides and ends of a scaffold if the structure is in a location where individuals are required to work or pass under it.

The standard goes on to say that when materials are piled higher than the toeboard, the scaffold must be equipped with a safety screen that is strong enough to prevent objects from falling. The screen must be positioned between the toeboard and the toprail and extend along the entire opening.

When a scaffold is in use, don’t allow workers to remove a scaffold component without authorization, because it may cause the structure to become unstable or render safety equipment dysfunctional. You should also never permit workers to alter scaffold components or use them for purposes for which they were not designed.

If a rolling scaffold is being used, wheels or casters must be locked to prevent scaffold movement. In addition, the top platform height, as measured from the rolling surface, must not exceed four times the smallest base dimension. Secure or remove all materials from rolling scaffolds before moving them. Never permit workers to ride a rolling scaffold.

By following established safety standards, and using a common-sense approach, you’ll be able to avoid some of the most common accidents and injuries that can result from scaffold use.

Consider Business Income from Dependent Properties to Insure Against Supplier Shut Down

A business that suffers a major accident such as a fire or hurricane may have to shut down for days, weeks or longer for repairs. Often, the income lost during the shut down will exceed the cost of repairing or replacing the damaged property. Businesses can protect themselves against this severe financial loss by purchasing business income insurance. However, sometimes a business can suffer a significant income loss, not because of damage to its own property, but because of damage to someone else’s.

Consider the following business situations:

  • A metal parts manufacturer derives 80 percent of its income from sales to four customers.
  • A restaurant located within a five-minute drive from a factory that employs 1,200 people.
  • An electronic components distributor that buys its products from three manufacturers.
  • A supermarket chain that sells milk under its own brand name but that outsources production of the milk to a dairy products supplier.

In all of these examples, the businesses depend on third parties for supplies, purchases, or attraction of customers. If any of these third parties were to shut down, the resulting loss of income would devastate the business.

A business that depends on a few third parties for a large share of its income may want to consider buying Business Income From Dependent Properties insurance. This coverage pays for income lost as a result of damage to the property of another business on which the policyholder depends financially. The form classifies these properties, called “dependent properties,” into four groups:

  • Contributing locations, which deliver materials or services to the business or to other businesses on the policyholder’s account. The three manufacturers that provide product to the electronic components manufacturer are examples of contributing locations. The form does not consider a supplier of utilities (water, power or communications) to be a contributing location. A separate coverage form exists to insurer these types of suppliers.
  • Recipient locations, which accept the business’s products or services. The four customers who provide 80 percent of the metal parts manufacturer’s income are recipient locations.
  • Manufacturing locations, which manufacture products for delivery to the business’s customers under a contract of sale. The dairy products supplier producing the milk for sale under the supermarket’s label is a manufacturing location.
  • Leader locations, which attract customers to the policyholder’s business. The factory near the restaurant is a leader location.

Coverage applies if the dependent property suffers damage from a cause of loss that the policy would cover if it damaged the business’s own property. For example, a typical property insurance policy covers damage caused by fire or explosion, so this insurance will pay if the dependent property burns or explodes. However, since most policies do not cover flood damage, the insurance will not pay if a dependent property floods.

The insured business has a choice of how to arrange the insurance. One option is to make the amount of insurance covering the business’s own property also apply to the dependent properties. The other option is to buy separate amounts of insurance that apply to each dependent property. Under either option, coverage begins 72 hours after the time the damage occurs.

Virtually every business depends to some degree on other firms for parts of its operation. Dependent property income losses do happen; many businesses in lower Manhattan suffered these losses in the months following September 11. Discussion of the exposure to loss from dependent locations should be a regular part of a business’s review with its insurance agent. Standard coverage protects against loss to a business’s property, but the worst loss may come from damage to someone else’s.

Are Your Employees Vulnerable to Automation-Related Injuries?

As office technology grows, it is developing its own special brand of injuries. Many of your office workers perform work that can lead to automation-related illnesses. To protect your workers and decrease your liability, you need to identify such health hazards and take measures to prevent their occurrence in your workplace.

The most common automation-related injuries are repetitive motion injuries, also known as cumulative trauma disorders (CTDs). The name stems from the fact that the injury develops over time because an employee performs the same task in the same range of motion.

Carpal tunnel syndrome is the most common CTD. This disorder typically develops from the repetitive motions of typing and computer work. The continuous bending of the wrist causes the tendons to swell in the tunnel formed by the carpal bones and ligaments. The swelling pinches the median nerve that gives feeling to the hand. Common symptoms of carpal tunnel syndrome are burning or painful tingling in a hand or shooting pains throughout the entire arm.

There are several steps you can undertake to combat the problem of carpal tunnel syndrome and other repetitive motion injuries:

·   Be sure workstations are ergonomically correct. The computer components need to be adjustable and every workstation should have a footrest, wrist rest, and document holder.

·   Train employees how to work in an ergonomically correct manner. Their keyboard should be positioned at elbow height so that their wrists remain straight and elbows remain at a 90-degree angle while they work. The top of the monitor screen should be at, or slightly below eye level. They should sit with their backs against the chair.

·   Provide adequate break times so that employees can leave their workstation for at least 15 minutes. There should be both a morning and afternoon break.

·   Keep productivity requirements reasonable. Employees shouldn’t feel continually pressured to skip breaks to complete assignments.

·   Rotate employees so they don’t have to perform the same motions all day.

The second most common automation-related injury is eyestrain. This results when employees stare at computer monitors all day. Some ways you can minimize the risk of vision problems include:

·   Reduce florescent lighting in the work area and provide desk lamps instead.

·   Use window shades to reduce glare on computer monitors.

·   Provide equipment that will allow employees to place reference materials close to the computer monitor and at the same distance from their eyes.

·   Train employees on the hazards of staring at computer monitors for long periods of time.

·   Ask computer operators to have a yearly eye examination.

Excessive noise can also result in automation-related injuries, such as headaches and migraines. In addition, noise compromises efficiency and decreases productivity. You can reduce the effects of noisy equipment by installing heavy drapes and thick carpeting. Placing a rubber mat beneath a machine helps reduce vibrations.

Duke Study Says Obese Workers File More Worker Compensation Claims

A Duke University Medical Center study revealed that obese workers filed twice the number of workers’ compensation claims as non-obese workers. In addition the over-weight workers had 7 times higher medical costs from those claims and lost 13 times more days of work from work injury or work illness than did non-obese workers.

The results of the study were published April 23, 2007, in the Archives of Internal Medicine.

The researchers looked at the records of 11,728 employees of Duke University who received health risk appraisals between 1997 and 2004. Duke ordinarily gathers this information anonymously as a way of identifying potential areas of occupational risk in order to develop plans to reduce that risk. The analysis covered a variety of occupational titles, such as administrative assistants, groundskeepers, nurses and professors.

The study compared the relationship between body mass index (BMI) and the rate of workers’ compensation claims. BMI assesses a person’s weight in relationship to their height, which is why it is considered the most accurate measure of obesity. For Americans, a BMI of 18.5 to 24.9 is considered normal; 25 to 29.9 is considered overweight, and 30 and above is considered obese.

The researchers discovered that workers with a BMI greater than 40 had 11.65 claims per 100 workers, compared with 5.8 claims per 100 workers for employees with a normal weight. They also found that obese workers averaged 183.63 lost days of work per 100 workers, compared with 14.19 per 100 workers for employees of normal weight. The average medical claims costs per 100 workers was $51,019 for the obese and $7,503 for the non-obese.

The study showed that the body parts most susceptible to injury among obese workers were the lower extremities, wrist or hand, and back. The most common causes of these injuries were falls or slips, and lifting.

The researchers concluded that their findings were applicable to the community as a whole, since the demographics of Duke closely reflect the local area. They plan to use the Duke population to help the community, so the solutions they devise can benefit the community as a whole.

However, the primary message they hoped to deliver is that the solution to reducing the burden on workers’ compensation involves eliminating both individual risk factors such as obesity and the risk factors within the workplace that cause injury. By targeting obesity and workplace risks simultaneously, businesses can reduce absenteeism, increase the overall health of workers, and decrease the cost of health care.

Compressed Air: The Least Recognized Hazardous Material

Workers in many industries use compressed air as a power source for their tools and equipment. Unfortunately, workers sometimes don’t realize the potential dangers inherent in compressed air use, so they fail to take necessary safety precautions. Improper compressed air usage can result in disabling injuries and possible death.

In training employees about compressed air use, first discuss the three major hazards:

·   Skin penetration that causes hemorrhaging and pain-Compressed air can enter the body through cuts in the skin. If this happens, an embolism (air bubble) may form in the bloodstream. If the embolism migrates through the circulatory system to the heart or lungs, it can cause a blockage in a blood vessel in the organ, which could result in death. If compressed air enters the body through the mouth or nose, it can injure internal tissues and organs. If an employee is hit in the eye with compressed air, it can push the eyeball out of the socket. Blowing compressed air into an ear can rupture the eardrum.

·   Flying debris-Air pressure of 40 pounds can cause particles to hit the eyes and face with the same intensity as shrapnel. Flying particles can also cause cuts to other parts of the body.

·   High noise level-Noise levels caused by compressed air usage can reach or exceed 120 decibels, a level at which hearing damage can occur.

Any training about the correct use of compressed air should include instruction on the need to wear personal protective equipment (PPE). Wearing PPE is essential if an employee is to be protected from the dangers outlined above. You should require all employees working with compressed air to wear safety glasses with side shields or goggles, a face shield, hearing protection, and a dust mask or respirator.

Compressed air safety training also should cover the following rules:

·   Check to see that the line being worked with is an air hose, and not a gas or water line.

·   Inspect the hose to see that it is free of holes, and properly connected.

·   Keep air hoses off the floor so they won’t be damaged by foot traffic. Hoses laying on the floor also pose a tripping hazard.

·   Don’t allow sharp objects to rub against an air hose while it is in use.

·   Coil the hose when it’s not in use and hang over a wide support. Never hang it on a hook or nail. Check the coiled hose and smooth out any kinks, which can cause cracking in the hose.

·   Use the lowest air pressure possible to complete the job.

·   Never point an air hose at anyone.

·   Never use an air hose to clean dust from clothes. Use a brush or vacuum instead.

Incorporating correct compressed air usage guidelines into your company’s safety protocols helps your employees to avoid unnecessary and dangerous working conditions, and can reduce the number of accidents that occur.

Protect Your Work in Progress with an Installation Floater

The materials that a contractor brings to a job site are subject to numerous perils in a variety of locations. The contractor might take delivery of them at his main location and store them for a period of time. At some point, he will transport them to a job site where they may again sit in storage. Finally, he will cut, drill, weld, or otherwise process the materials until they become a finished part of the building. During all of these stages, the materials may suffer damage by fire, theft, flooding, or even damage in a traffic accident during transport to the job site.

Commercial property insurance policies do not cover materials once they have been moved off of the business’s premises, and they provide little coverage for materials while in transit. To insure property that moves around, the contractor needs an inland marine policy, which is a policy that covers property that can easily move from one location to another. The inland marine policy that covers materials a contractor will install in a building is called an installation floater.

Contractors may be familiar with a similar policy known as a builders’ risk policy. A builders’ risk policy insures an entire structure during the process of its construction. The structure’s owner or the general contractor in charge of the job might purchase this policy. An installation floater, while similar in coverage, insures only a specific type of property during the construction, such as the plumbing or electrical systems. Subcontractors, who ordinarily have a limited scope of work on the job, purchase installation floaters.

An installation floater policy insures property used in a construction project. While the actual policy form will vary from one insurance company to another, it will typically cover materials, equipment, machinery and supplies owned by the contractor or for which he has responsibility. The property must be used in or incidental to the fabrication, erection or construction project described in the policy. One single amount of insurance applies to the property; the limit should be the highest value for that type of property during the job. When insurance companies establish the premium for these policies, they take into account that the value of the property will start out small and increase as the job progresses. For example, if a boiler installation contractor buys an installation floater with a $500,000 insurance limit, the company will adjust the premium to recognize that, for most of the project, $500,000 worth of boilers and related equipment and supplies will not be there.

Installation floaters cover all causes of loss other than those specifically listed in the policy. They cover losses caused by fire, lightning, theft, explosion, and several other perils. Typical policies do not cover losses caused by extreme events like earthquakes and floods, but some companies will consider adding these coverages for an additional premium. Most policies will also exclude damage that occurs during testing of a building component or system (for example, testing of compressors). Some companies may consider adding this coverage as well, depending on the type of property and the nature of the testing.

Beside the policy’s expiration, several other events may cause coverage to cease. Coverage ceases when the purchaser accepts the work, when the contractor’s ownership interest in the property ends, if he abandons the project, or within a stated number of days after he finishes work.

Because every installation floater policy is different, contractors should carefully review their policies. They should discuss any deficiencies or confusing provisions with their insurance agents. Construction contracts often require this coverage, so it is vital for a contractor to make sure he has the proper coverage.

AFL-CIO Sues to Force Issue of Who Pays for PPEs

Both the AFL-CIO and United Food and Commercial Workers (UFCW) have filed a lawsuit against the Department of Labor so that the agency will be forced to issue a final rule mandating employers to pay for personal protective equipment (PPEs).

The controversy over whether employers should pay for PPEs first began in 1999. That year, the Department of Labor proposed a rule that employers must pay for all PPEs required under OSHA standards. The only exceptions were safety shoes, prescription safety eyewear, and logging boots in certain circumstances. However, the agency never followed through with a final rule.

In 2004, the Department of Labor was still wavering; saying it needed more time to evaluate the proposal and calling for more public commentary on the subject. The biggest stumbling block for the agency was how the proposed rule should address the types of PPEs that are usually supplied by the employee, and taken from jobsite to jobsite or from employer to employer. They felt the problem was an especially thorny issue in industries with high turnover.

In actuality, the question of who pays for what PPEs has already been settled on most union job sites in either of two ways. Either it has become the custom that the employer/employee pays for the equipment or it is spelled out in the contract who pays.  However, in the absence of direction from OSHA, nonunion employers can do as they please, often leaving it to their workers to provide their own protection.  Because of the expense, many workers choose to work with the appropriate PPE, jeopardizing their own safety as well as everyone else’s.

The lawsuit, filed in the U.S. Court of Appeals for the District of Columbia Circuit, asserts that the agency’s failure to act is putting workers in danger. According to OSHA’s own estimates, 400,000 workers have been injured and 50 have died because there is no PPE rule in place. The labor groups say that workers in some of America’s most dangerous industries, such as meatpacking, poultry and construction, and low-wage and immigrant workers are being forced by their employers to pay for their own safety gear because of OSHA’s failure to finish the PPE rule.

The labor unions call the eight-year delay “egregious,” and they are asking the court to force OSHA to act. The suit asks the court to issue an order directing the Secretary of Labor to complete the PPE rule within 60 days of the court’s order.

Six Reasons Your Home-Based Business Needs a Small Business Policy

Like most new home-based business owners, you believe your homeowner or renter’s insurance coverage offers sufficient protection.  That is unfortunate, because in most instances these policies offer little to no coverage for business-related losses.

Homeowner’s policies are not designed to cover business losses.  Most offer a small amount of business property coverage, meant to cover incidental items, such as a computer used for office work. 

Depending on your business, you may be able to purchase a homeowner’s endorsement to cover your business property.  Your insurer is naturally going to want to know more about your business.  Questions such as what type of business, how long you have been in business and how many employees are common.

If your business is small with a low risk profile, and with limited client visits to your home, your homeowner’s insurer may offer limited liability protection. This protection would cover slips and falls when a client visits your office, which otherwise would not be covered.

If this option is not available, you may want to consider a small business policy.  Your homeowner’s insurer might offer a home-based business package for a reasonable premium, or another insurer can offer a package policy to cover the liability and property of your business.

Take a look at the following list.  If one or more of the items below apply, you may want to consider a business policy for your business:

o                   Business Property, Stock or Equipment over $10,000 in value

A business policy will allow you to insure your office contents, equipment, and stock. A homeowner’s policy will likely have little, if any, coverage for business-related items.

o                   Clients visit your office/use your product/depend on your service

Liability insurance can help cover your exposure to lawsuits resulting from slip and falls, product liability claims, personal injury claims, etc.  Perhaps even more importantly, it will provide defense costs for such actions.  Homeowner’s policies do not have coverage for business liability.  In a few instances, you may be able to purchase an endorsement to allow coverage for slip and falls due to customer visits, depending on your type of business.

o                   Damage to your office/workspace would require you to relocate/find a temporary substitute

Extra Expense coverage in a business policy will provide funds for a temporary office/workspace or cost of a mobile trailer near your damaged office site.

o                   An Error or Omission could result in a lawsuit that would need to be defended/could seriously damage your business

Errors and Omissions coverage will protect you from judgments and defense costs resulting from past mistakes. 

o                   Damage to your workplace could cause you to lose business, perhaps even lose some customers permanently

Business Interruption Coverage will help pay for expenses until your property is repaired or sales return to normal (depending on the policy form)

o                   Your employees use their vehicles to make deliveries or run errands for your business

Non-owned automobile liability will protect your business in the event that your employee has a serious accident during the course of running an errand for your business.

Use Foresight When It Comes to Protecting Your Eyes

The way we see involves a complex interplay between light, brain and eye. When light strikes an object in your field of vision, the rays enter each eye and hit the eye’s lens. The rays stimulate the nerves in the lens, which carry messages to the brain. The brain takes the message it receives from each eye’s lens and fuses it into a sharp single picture. Because this mechanism is so complex, it is also extremely vulnerable to injury. Therefore, protecting your eyes from damage at work should be one of your major concerns.

One of the best ways to protect your eyes is by using safety glasses. Safety glasses are so effective in preventing injury that the Occupational Safety and Health Administration (OSHA) incorporated specific guidelines into its standard, 29 CFR 1910.1333, as to when you should use them. If your work exposes you to hazards from flying particles, molten metal, liquid chemicals, acids or caustic liquids, chemical gases or vapors, or potentially injurious light radiation, OSHA mandates that you wear safety glasses.

OSHA also requires that you use safety glasses with side protection when you face a hazard from flying objects. Detachable side protectors, such as clip-on or slide-on side shields, are permitted as long as they meet the agency’s requirements of providing full protection from flying objects.

If you wear prescription lenses, you are still required to wear safety glasses if the possibility of eye injury exists. You have two options. You can wear eye protection that has your prescription incorporated into its design. Or, you can use eye protection that can be worn over your prescription lenses, as long as doing so doesn’t disturb the proper position of the prescription lenses or the protective lenses.

In addition to wearing safety glasses, you should protect your eyes by having a thorough eye examination every two years. Many diseases can affect the eyes. However, changes in vision are usually gradual, which is why it is so important to monitor eye health with regular examinations.

Here are a few other tips to help you keep your eyes healthy:

·   Don’t use over-the-counter eye remedies or treatments unless advised by your doctor.

·   Don’t wear sunglasses for night driving or in fog.

·   Don’t look directly at the sun, even while wearing sunglasses.

·   Don’t work in dimly lit areas.

·   Don’t rub your eyes with dirty hands.

Sometimes you must accept a little discomfort, inconvenience or expense in order to protect your eyes, but the sacrifice is well worth it. If the unexpected happens, your protective eyewear could make the difference between keeping your sight and losing it.

Property Coverage for Businesses with Changing Needs

Some businesses have very stable property insurance needs as the value of their non-building property doesn’t vary much during the year. For example, an accountant’s office will have furniture, telephones, computers, reference books, and so on. The replacement costs of these items won’t be much different in July than they were in April. Other types of businesses, however, experience wide variations in the values of their property. Florists tend to carry more stock around Valentine’s Day and Mothers’ Day than they do on most days of the year. Many retailers earn most of their profits during the holiday shopping season, so they must keep larger amounts of stock on hand. Warehouses and manufacturers may have highly variable amounts of goods for sale. Depending on the flow of orders, the value of their stock may change greatly from month to month or even more frequently.

A traditional property insurance policy, with one set limit of insurance for personal property, will not meet the needs of businesses like these. To secure enough insurance, they would have to buy an amount large enough to cover those times when values are at their peak. However, for much of the year they would be paying for more insurance than they need. Businesses in this situation may want to consider two coverage options: Peak season coverage and value reporting coverage.

Peak season coverage is appropriate for firms that can predict those time periods when their values will increase. Examples are florists, toy, electronics and clothing retailers during the holiday season, school supply stores in late summer, and costume shops in October. The coverage form states the location and type of the property, the amount of additional insurance, and the period of time during which the higher amount applies. For example, it might show that insurance on goods for sale will increase by $100,000 from October 1 to January 1. This gives the business plenty of coverage for the busy time but saves it from having to pay for all that coverage the rest of the year.

Value reporting coverage is for those firms with values that fluctuate all year long. This coverage requires the firm to buy an amount of insurance large enough to take care of the peak periods. However, the insurance company will charge a lower initial premium than that amount would ordinarily require. The firm then must make periodic reports of its values to the insurance company. Depending on the option chosen, the firm will send reports monthly, quarterly, or once per year. Again depending on the chosen option, the reports can show values as of the end of each business day, week, month, quarter or year. After the firm has submitted all of its reports for the policy period, the insurance company determines the firm’s average values and calculates the final premium.

Firms that choose the value reporting coverage must take care to submit the required reports on time and accurately. The form gives the insurance company the right to reduce claim payments for losses to the property when reports are late. The company can also reduce a loss payment if it finds that the firm underreported its values. The limit of insurance does not automatically increase if the reports show values higher than the limit; the firm must request an increase in coverage.

Any firm with variable property values would be wise to consider purchasing one of these types of coverage. With some careful planning, a business can limit its insurance costs while still getting the coverage it needs.

Workplace Assaults on the Rise

A new study on workplace violence, sponsored by the National Council on Compensation Insurance (NCCI), finds that while workplace murder rates have declined, the number of assaults has been rising. The NCCI noted that from 1992 to 1999, the assault rate had been declining until it reached a level of about 16,000 incidents. However, for the last five years this level has ranged from 16,000 and 18,000 while normal workplace injuries continue to decline.Even though workplace assault rates have increased, NCCI said these rates are still significantly lower than the assault rate experienced by the general population.

The report found that 60 percent of all workplace assaults are concentrated in health services, social assistance, and personal care occupations.The NCCI said research at the National Institute for Occupational Safety and Health uncovered a number of factors that increase the likelihood of workplace violence:

·   Working in health care or social services fields with persons who may tend to be mentally unstable or violent

·   Having contact with the public, especially involving the exchange of money

·   Having a mobile workplace, such as a taxicab or delivery truck

·   Guarding property or possessions

·   Working alone, especially in high-crime areas

The design of the workplace shouldn’t make it easy for a worker to be assaulted. Workers should be physically separated from the general public by installing counters that are high enough and with enough depth to make physical contact impossible. Bullet-resistant barriers can provide additional protection.

Large amounts of cash on premises can create an incentive for assault. To minimize this risk, keep only enough cash on hand to operate efficiently. Use drop safes to store excess cash, and post signs stating that only a limited amount of cash is on site. Wherever possible, install machines that accommodate automatic teller cards, credit or debit cards.

Entrances and exits should be assessed to see how easy it is for the general public to gain access to work areas when doors are left unlocked or propped open. Survey hallways and other recessed areas where attackers can hide. Include refuse areas, outdoor refrigeration areas and other storage facilities that workers must use during a shift in this evaluation. Install security cameras in these places so they can be continually monitored.

Check landscaping to see if bushes provide enough coverage for an attacker to lay in wait and surprise a worker. Evaluate parking lots to determine if they have good lighting and that all parking spaces are visible; not hidden by refuse containers or foliage.

Security technology also reduces the risk for assaults against workers. Such technology includes exterior lighting that illuminates doorways, closed-circuit cameras, silent alarms, two-way mirrors, key-card access systems, and panic-bar equipped doors that lock from the outside only. 

Do Your Employees Drive Personal Vehicles for Business-Related Purposes?

If an accident occurs while an employee or volunteer is operating their personal vehicle for company business, your company could be held liable.  Even when an employee is just running an errand, such as making a bank deposit, dropping off a proposal or picking up a part, if an accident occurs your company could suffer as a result.   

While you cannot insure a non-owned vehicle, there are other steps you can take to protect your company before a loss occurs. If your employees or volunteers use personal vehicles for company business, even if just occasionally, the following guidelines can help reduce your risk:

1.   Determine a minimum level of auto liability insurance your employees and/or volunteers must carry.  Also consider what documentation should be provided to your company to demonstrate that proper insurance coverage is in effect.  For example, you might require that employees or volunteers submit a certificate of insurance each year that verifies coverage limits.

2.   Driving records should be checked prior to an employee’s hiring.  Validate driving credentials and check for accidents and moving violations over the past 5 years.  All recruiters, managers and human resource people should be aware of this policy.

3.   Avoid having youthful drivers, those with little driving experience, or drivers with more than one moving violation or accident use their vehicle for business-related purposes.

4.   Periodically check driving records for new offenses and moving violations.  Introduce a procedure for how discovery of new offenses will be handled.

5.   Develop a written policy on business use of personal vehicles and communicate to all employees. Managers, human resource personnel and recruiters should share this information with any potential new hires.

6.   Be sure you remain in compliance with local, state and federal statutes while obtaining private information about your employees. 

Insurance can play a role in helping to protect your business from this exposure. Non-owned auto liability insurance may be obtained on a stand-alone basis or in conjunction with your general liability coverage.  Coverage for hired vehicles may also be available, if needed.

Insurance premiums for non-owned automobile liability depend on the frequency of personal vehicle use and how employees use their vehicles for your business. Premiums for this line of coverage are generally fairly reasonable.

Another way to reduce risk is to eliminate the exposure.  If employees or volunteers are prohibited from using their personal vehicles for business-related purposes, it eliminates the possibility of an accident that will affect your company.

In the meantime, while you are mapping out your risk reduction strategy, maybe you should consider making that bank deposit yourself…

Take Care of Your Hard Hat, So It Can Take Care of You

Of all the pieces of personal protective equipment you wear, your hard hat is probably one of the most important. In order for it to protect you, it has to be properly worn and maintained.

The following tips will help you use your hard hat appropriately and keep it in optimal condition:

·   Inspect your hard hat before each use. Your hard hat is made up of the shell and the suspension. Begin your shell inspection by looking for cracks, nicks, dents, gouges and any damage caused by impact, penetration or abrasions. If your hard hat is made of thermoplastic materials, you should check the shell for stiffness, brittleness, fading, dullness of color or a chalky appearance. If any of these conditions are present, or if the shell is damaged, replace it immediately.

Ultraviolet light can cause deterioration to the hat’s shell over time. If your work is predominantly in sunlight, replace your hard hat every two years. The same is true if you work in an environment that has a high exposure to temperature extremes or chemicals. Most hard hats have date codes on the underside brim of the cap so you can readily determine a hat’s age.

Inspecting the suspension system is just as important as inspecting the shell, because the suspension absorbs the shock of a blow to the top of the hard hat. Look for cracks or tears, frayed or cut straps, or lack of pliability. All keys should fit tightly and securely into their respective slots. Any suspension that shows signs of damage should be removed from service and replaced immediately.

·   Limit the use of stickers. Stickers won’t necessarily interfere with the hat’s performance, but you should limit their use so you are able to thoroughly inspect the shell for signs of damage.

·   Replace a hat that has been struck by a forcible blow. Any impact can reduce a hard hat’s effectiveness, so a hat that has suffered a blow should be replaced, even if it is relatively new or shows no visible damage. A hard hat that has been dropped more than eight feet requires replacement.

·   Never modify the shell or suspension. Do not drill ventilation holes in the shell. Avoid having your hard hat come into contact with electrical wires. Never use a suspension that is not intended to be worn with a particular shell or use a shell made by one manufacturer with a suspension made by another. Never carry or wear anything inside of your hard hat between the suspension and the shell.

·   Don’t wear your hard hat backwards unless the manufacturer says you can. Before wearing the hat backwards, you should have written verification from the manufacturer that your hard hat has been tested and found to comply with the requirements of the American National Standards Institute when worn with the bill turned to the rear. The manufacturer may specify that the suspension must be reversed in the helmet, so that the brow pad is against the forehead and the extended nape strap is at the base of the skull, leaving only the shell of the helmet positioned backward on the head.

Following these tips can help to ensure that your hard hat can protect you as it was intended to do.

Construction Vehicle Classification Can Affect Your Wallet

Several factors influence how much a contractor pays for business auto insurance. The amount of insurance bought, the firm’s loss history, employees’ driving records, the condition of the vehicles, deductible levels – all of these have a major effect on the policy premium. However, the way the insurance company classifies the vehicles also impacts the premium in very significant ways.

Under the rating rules for business auto insurance, insurance companies use three factors to classify a vehicle: Its gross vehicle weight, how the business uses it, and the normal radius of its operation. The size classifications are:

  • Light – 0 to 10,000 pounds gross vehicle weight;
  • Medium – between 10,000 and 20,000 pounds;
  • Heavy – between 20,000 and 45,000 pounds;
  • Extra-heavy – More than 45,000 pounds.

The heavier a vehicle, the higher its premium due to the increased potential for severe losses.

The use classifications relevant to contractors are:

  • Service – Vehicles used to transport the business’ personnel, tools, equipment and supplies to or from a job location. Only vehicles that the business parks at job locations for most of the working day or uses to transport supervisors between job locations get the service classification.
  • Commercial – Construction vehicles that are not eligible for the service classification.

Service vehicles, because they are parked for most of the day, qualify for a lower premium than do commercial vehicles.

The radius classifications are:

  • Local – Not regularly operated beyond a 50-mile radius from where the business garages them;
  • Intermediate – Operated within a radius of between 50 and 200 miles;
  • Long Distance – Operated within a radius of more than 200 miles.

The larger the radius, the more miles the vehicle is likely to be driven and the higher the premium.

The rules also contemplate the type of contractor that uses the vehicle, though the rating factors tend not to vary greatly from one type to another.

The rating rules have charts showing the mathematical factors that apply for different combinations of size, use and radius. The insurance company multiplies these factors by its basic premium for the vehicle. For example, the factor for liability insurance for a light service vehicle (a pickup truck) with a local radius might be 1.0. The company will take the basic premium for a truck (for example, $500) and multiply it by 1.0. Conversely, the factor for a heavy commercial vehicle (a dump truck) with a local radius might be 1.50. Multiplying this factor by the $500 basic premium produces a premium $250 higher. This vehicle is on the road more than the pickup and has the potential to cause more severe injuries and damage in an accident, so the premium is higher.

Different factors apply to the premiums for comprehensive and collision coverages, and the effect may be the opposite of that for liability coverage. For example, the factor for the pickup truck might be 1.0 but the factor for the dump truck might be only 0.80. This is because a heavier vehicle should be able to withstand a crash better and sustain less damage than the lighter one. The rules base comp and collision premiums on the original cost of the vehicle, so the dump truck’s higher initial value will offset the lower factor to some extent.

It is important that a business provide accurate information about its use of a vehicle to the insurance company. Vehicles that spend most of the day on the job site should get the lower-rated service classification. Insurance companies can verify a vehicle’s weight through independent sources and its radius by examining lists of work on hand, but they will rely on information from their agents for the use classification. The business that gives its insurance agent detailed information about all its operations is a business that will pay a premium that accurately reflects its loss potential.

Make MVR Checks Part of Your Driver Safety Program

It is more commonplace for workers to die in an automobile crash while on the job than it is for them to be killed while working on industrial machinery or at a construction site, so says the National Institute For Occupational Health and Safety (NIOSH). In fact, this alarming statistic has been the case since 1992. NIOSH reported that roadway car crashes killed 13,337 or 22 percent of all workers between 1992 and 2001.

Driving-related fatalities continued to increase while deaths from all other occupational-related causes dropped. Driving-related deaths averaged approximately one per 100,000 full-time equivalent workers between 1992 and 2001.

With the rising death toll came rising costs. The National Safety Council reported that in 2001 and 2002, injuries arising from roadway crashes averaged $27,500 per workers’ compensation claim. They were the single most costly workers’ compensation injury claim category. Crashes also caused workers to lose more days from work than any other type of work-related injury.

If you have employees who drive, cutting the costs associated with traffic accidents is an important part of your risk management program. The most effective way to cut costs is to institute a safe driver policy, which includes checking your employees’ Motor Vehicle Records (MVR).

Every state in the U.S. maintains MVRs on all of its drivers. This is a record that typically contains information about a person’s driving history, including such information as traffic violations and arrests and convictions for driving-related incidents. Individuals can obtain copies of their own driving records for employment purposes at their local DMV office. You can also obtain a copy of the record if you have the employee sign an MVR consent form.

The most effective way to use an MVR is to make a clean driving record a condition of employment for employees with driving responsibilities. Be sure you follow through and examine a potential employee’s MVR before you make a job offer. Also determine if the applicant has a driver’s license in another state and check the MVR in that state too.

However, that shouldn’t be the only time you check MVRs. Examine those records again on an annual basis for each employee with driving responsibilities. Included in your company’s safe driver policy should be the disciplinary action that will be enforced if you find a moving violation on a driver’s record during an annual check.

Using an MVR in this manner ensures that the employee will take an active role in your company’s driver safety program. As in any risk management strategy, employee buy-in is crucial if your driver safety program is to be effective.

Longevity Is Key When It Comes to Lawyer’s Professional Liability Claims

Retirement usually means not only leaving your job, but everything associated with that job. However, when a lawyer retires, this isn’t necessarily the case. Whether they are no longer practicing law, or starting an entirely new career, lawyers may find themselves haunted by liability claims arising from their past work.

For this reason, it’s important for departing lawyers to confirm that liability coverage will remain intact for past work. To accomplish this goal, you should review the partnership agreement, the firm’s professional liability insurance, and any recent claims. Keep in mind that partnership agreements and insurance coverage vary from firm to firm. When you review the agreement, you may find an absence of provisions for the firm’s ongoing indemnity or insurance obligations towards former members.

When reviewing the firm’s professional liability policy you’ll probably find that is written on a “claims made” basis. This means that coverage is provided for any claims made during the policy term, even if the events that precipitated the claim happened before the policy’s effective date. Even if your firm has a claims made policy, it can still have coverage gaps that significantly affect you once you decide to leave. For example, the insurer may have included provisions that limit or exclude coverage of the firm’s activities in certain practice areas. Or with claims made policies, if an exclusion is added in the future, it is applicable to all past and future work in that practice area.

Your policy review should also include an examination of its coverage limits. Since these limits cover all claims made and reported within the policy term, there may not be funds available to cover a retiring lawyer if the firm has already submitted a substantial number of claims or even just one large one.

The next step in your evaluation is a determination of how the policy defines “insured.” In some attorney-client relationships, a lawyer may be considered an employee or independent contractor. Under some policies, coverage for employees and independent contractors is either limited or non-existent.

You should also review the conditions regarding the firm’s responsibilities for policy renewal and reporting claims. Don’t assume that the firm will continue to operate as a going concern after you are gone, or that it will continue to renew its liability policy. In fact, in the case of smaller firms, dissolution is often the outcome after a key partner retires.

If the practice is dissolved, it is important that the firm and its former partners maintain insurance coverage. And since time is a crucial factor in a dissolution scenario when it comes to coverage, it is important that you meet as soon as possible with your insurance representative to discuss your coverage status and appropriate options.

Everyone Bears Responsibility for Accident Prevention

When it comes to accident prevention in the workplace, you are your brother’s keeper. You have a responsibility to make sure that the co-workers around you, or those who use the same tools, equipment or materials that you do, are not injured because of your negligence. Furthermore, to make the workplace as safe as possible for everyone, all workers need to keep their eyes open for any dangerous situations in their midst.

Keep the following in mind to make your workplace as safe as possible:

·   Warn a worker who is in a dangerous position. Sometimes inexperience can cause a worker to perform a task in a manner that may result in injury. If you see this happening, don’t just explain to your co-worker what he or she is doing wrong; demonstrate the right way to do it.

·   Call attention to a task if a worker seems distracted. Conversation and noise can present serious distractions. If a co-worker seems not to be paying attention to the task at hand, go over and try to gently re-focus his or her attention.

·   Set a good example. Always use tools and equipment in the intended manner. Never joke around when handling tools or equipment. Remember, younger co-workers can be influenced by the behavior they see in their older peers.

·   Keep machine guards in place. Machines usually have moving parts that may accidentally come into contact with a worker’s body. When this happens, the worker can be killed or maimed. Machine guards prevent contact with moving parts during the normal operation of the machine.

·   Report tool/equipment defects to your supervisor. Continuing to use a defective tool or piece of equipment instead of reporting it could result in possible injury to you or a co-worker.

·   Encourage co-workers to report every injury. Sometimes an injury that seems insignificant can escalate down the road. If an accident is not reported at the time it occurs, it may not be covered by insurance if it is reported at a later date.

·   Encourage co-workers to wear personal protective equipment (PPE). Your employer provides PPE so that you will be protected. Always wear it if it is necessary for the task being performed. Ask co-workers to wear it as well.

·   Ask questions if you are confused about what you have been asked to do. Never perform a task unless you are completely sure of the correct way to do it. Ask your supervisor to show you the proper method.

·   Take safety suggestions in the cooperative spirit in which they are made. Co-workers are responsible for each other’s safety. If a suggestion is made about the way in which you are performing a task, don’t respond with anger. Instead, thank the co-worker making the suggestion for caring enough about your personal safety to take the time to correct you.

When all workers look out for themselves and others, everyone’s safety is enhanced.

Questions You Need to Ask Before Buying Commercial Auto Insurance

Purchasing commercial auto insurance may be one of the most important insurance decisions that a business owner makes. Anyone who purchases or uses a vehicle for business use, be it a singular vehicle or multiple vehicles, will have to purchase commercial vehicle insurance. To get the best coverage at the best rate, you should ask yourself a number of key questions before you meet with your insurance broker.

Here are some of the most vital questions you need to ask yourself and the reasons why they are so relevant:

Do You Know What Defines Commercial Vehicle Usage?

Although you may use a vehicle infrequently for commercial purposes, your personal auto coverage invariably excludes using a vehicle for commercial purposes. Also, each policy clearly defines what is meant by commercial use, so you need to be very clear on the differences so you do not end up having a claim denied.

How Many Total Drivers and Vehicles Does the Company Require?

Insurers who provide commercial auto insurance may distinguish the available coverage options depending on both the number of drivers and the number of vehicles. Multiple vehicles and drivers may best be served by fleet insurance. Different insurers will vary in how they base their rates and will do so based not only upon the number of vehicles insured but also the class of the vehicles involved. The best insurance option may be to consider purchasing fleet insurance as opposed to having the vehicles insured individually. It all depends on your needs.

What Strategies Can You Use to Reduce Your Commercial Vehicle Premium?

There are a number of other questions and measures that can help lower your premiums for either individual vehicle usage or fleet use.

Do You Know Your Drivers’ Records?

Drivers with multiple claim records or violations are clearly going to cause your premium rates to increase. Ensure that you are aware of the driving records of any new or current employees who will be driving the vehicles. Have all employees who drive report any and all accidents or driving infractions immediately. Make it company policy.

What Kind of Car Are You Buying or Leasing?

Although it might seem like a good idea to have the luxury or sports car to make a statement, just remember that you are going to pay for such vehicles. You may want to get a great looking mid-sized sedan that has a superior safety rating because an insurer is most definitely going to factor in the types of vehicles driven.

What Anti-Theft and Safety Devices Will the Vehicle(s) Have?

Vehicle theft is still a major concern, especially in urban settings. When insuring your vehicle(s), an insurer is going to consider several things:

·  The location of your business, because not all parts of an urban setting are necessarily treated the same. High crime areas will most often lead to higher premiums.

·  Whether or not alarms or GPS devices are installed in the vehicle(s).

·  What the vehicle has for air bags and other safety devices such as beepers, sensors, or cameras.

What Kind of Deductible Can You Afford?

The amount of deductible you are willing to absorb can also have a dramatic impact on your premium because all insurers pretty much adhere to a simple formula: The higher the deductible – the lower the premium.

Will Federal or State Laws Impact Your Coverage?

Certain vehicles and what they transport can also be affected by federal laws and, in some instances, can be state-specific. Check out any legislative requirements which impact what you need to do beforehand.

Strategies to Keep the Workplace Safe

Employers understand that they have a moral and legal responsibility to protect their employees from violence in the workplace. The problem most face is how to effectively execute that obligation.

When it comes to designing a workplace anti-violence strategy, it’s best to create a two-pronged approach that consists of protection and prevention. Start by developing a written policy that clearly communicates a zero tolerance toward workplace violence of any form. The policy also needs to outline exactly what disciplinary measures will be taken against employees who threaten violence. Your Human Resources professional should write this in conjunction with your in-house counsel to be sure that the policy doesn’t infringe on any federal/state laws. If an employee violates this policy, it is imperative that you follow through with the stated consequences.

Other important steps in the fight against workplace violence include verifying application information, conducting thorough background checks and having more than one person in the room during an evaluation or termination meeting.

Employers should also train supervisors to spot potential violence in all its forms including destruction of property and implied threats of violence, and encourage them to report these incidents immediately. Studies have shown that violent workers usually don’t just snap. They exhibit an increasingly violent attitude over time. A supervisor trained to recognize an employee who is beginning to show signs of violence can prevent an assault by referring the employee for counseling. Some of the early warning signs include:

·              Comments about a personal or family history of violence

·              Fascination with guns or other weapons

·              Direct or veiled threats

·              Serious personal or family problems, such as divorce or a death in the family

·              Financial troubles

·              A drastic change in behavior, such as mood swings or outbursts

·              Poor job performance

·              Abuse of drugs or alcohol

·              Lack of social interaction with other employees

·              Signs of paranoia about another employee

·              Repressed anger

In addition to training supervisors, employers can stop workplace assaults by ensuring there is enough physical security on-site. Another important tool is an employee reporting system, such as an anonymous hotline. Supervisors aren’t always the first to recognize growing violence in an employee. A hotline will make it easy for employees to let management know about suspicious or threatening behaviors without fear of reprisals from the violent individual. 

Know Your Commercial General Liability Insurance Limits

A commercial general liability policy (CGL) lists six different limits on the policy’s declarations page. While the limits may be listed separately, it’s important to understand that they are all interrelated. That means that payment of damages for one limit will affect another limit.

To illustrate how these limits interact, it is necessary to examine each one in detail:

The General Aggregate Limit  – The maximum amount the insurer will pay during the policy period for all damages including bodily injury, property damage, personal and advertising injury except for any amount paid as damages because of bodily injury or property damage included within the products-completed operations hazard. The definition of the products-completed operations hazard is outlined in the policy and a separate aggregate limit applies to this type of claim. Also included within the general aggregate are damages paid for medical payments.

Products-Completed Operations Aggregate Limit – The maximum amount the insurer will pay for damages because of bodily injury or property damage included within the products-completed operations hazard. The specified hazards are those described within the definition of the products-completed operations hazard and are limited to bodily injury or property damage that:

1.             Occurs away from the insured’s premises.

2.             Caused by the insured’s products that are no longer in the insured’s possession or an insured’s work that has been completed.

Personal and Advertising Injury Limit – The maximum amount the insurer will pay if legally obligated to pay damages due to personal and advertising injury offenses. The personal and advertising injury limit applies separately to each person or organization that sustains damages because of a covered offense. However, regardless of the number of persons or organizations claiming damages, or the number of offenses claimed during the policy period, the insurer is only obligated to pay up to the general aggregate limit.

Each Occurrence Limit – The maximum the insurer will pay for the sum of all damages due to bodily injury, property damage and medical payments. Keep in mind that there is an aggregate limit for bodily injury and property damage claims that arise from the products-completed operations hazard and a separate limit for all other bodily injury and property damages. However, the each occurrence limit does apply to all sums paid for medical payments.

Damage to Premises Rented to You Limit – This coverage is actually an exception to certain exclusions found in the bodily injury and property damage coverage. The first exception provides coverage for property damage to a premises and its contents, rented to the insured for 7 or fewer consecutive days if an insured is legally obligated to pay for such damage due to any cause except fire.

The second exception provides coverage for damage to the premises only if an insured is legally obligated to pay for property damage due to fire. However, if an insured is held liable solely due to an agreement to be responsible for the property or for damage to the property, there is no coverage. Liability has to be imposed on the insured as the result of a lawsuit in order for coverage to apply.

The Damage to Premises Rented to You limit applies to any one premises. Any property damage paid under this limit will reduce the each occurrence limit for that same occurrence and will also reduce the general aggregate limit.

Medical Expense Limit – The medical expenses coverage is a separate insuring agreement that obligates the insurer to pay reasonable medical expenses for bodily injury, caused by an accident, without regard to fault. Medical payments are subject to the medical expense limit. The medical expense limit applies separately to each person. However, medical payments will reduce the each occurrence limit for that same occurrence and will also reduce the general aggregate limit.

Good Housekeeping Is One of Your Job Responsibilities

Good housekeeping at work means keeping both the facility itself and your own workspace clean, neat, and orderly. The reason housekeeping should be a priority is because it is the first line of defense in any company’s accident prevention strategy.

If housekeeping is to be effective, it has to be ongoing, not an activity that’s performed before management inspects the premises. Failure to keep up with necessary housekeeping tasks can result in employees:

·   Tripping over loose objects on floors, stairs and platforms

·   Being struck by falling objects

·   Slipping on greasy, wet or dirty surfaces

·   Hitting against projecting, or poorly stacked items

·   Cutting, puncturing, or tearing the skin of hands or other parts of the body

To properly maintain the facility, materials, supplies and parts must be stored in their designated storage areas when not in use, tools and equipment must be arranged in an orderly manner and placed away from traffic areas, scraps or debris in the department must be removed on a daily basis, and stairways and platforms must be kept clear. Attention should also be paid to keeping the aisles and passageways clear. Never store or stack materials in aisles.

When you keep the facility clean, you lessen the chances of both employee and visitor accidents because you will have removed the things that cause slipping, tripping, and falling. You have also lessened the likelihood that people will be involved in “struck by,” “striking against,” and “caught-between” accidents.

If your work area is in disarray because of a project you are working on, or if you cannot immediately clean your workstation, make people aware of the danger by posting signs that alert them to the potential risk.

In addition to accident prevention, there are other benefits to maintaining good housekeeping: 

·   There is an easier flow of materials, which reduces handling and saves time.

·   Clutter-free and spill-free work areas expedite movement, again saving time.

·   There is a decrease in the number of fire hazards.

·   Exposures to hazardous substances are reduced.

·   There is a better control over tools and materials because you know where to find them.

·   Without obstacles in the way, it is easier to clean and maintain equipment.

·   The environment is more hygienic, which improves health.

·   There is a more effective use of space.

·   The likelihood of materials and equipment being damaged is reduced.

New Building Codes Can Leave You Under-Insured

The owner of a commercial building may believe that replacement cost insurance coverage on the building is sufficient to protect her from financial loss. After all, she took the insurance agent’s advice and bought enough insurance to pay for repairing or replacing the building if it were completely destroyed. However, this may be a false sense of security, particularly if the building is an older one. While the building may not have changed greatly over the years, local building codes undoubtedly have. Even codes in effect at the time the building was constructed may affect your insurance coverage.

Many local governments have ordinances that require the demolition of a building when more than 50 percent of the building has been damaged. These ordinances require the reconstruction of the building in accordance with current building codes. Zoning and land use codes may have changed over the years prohibiting the reconstruction of that type of building at the same site. This could require the owner to rebuild somewhere else or with a much different building design. Laws and codes requiring buildings to be easily accessible to handicapped people may affect rebuilding if the building previously lacked ramps, doors that can be opened remotely, wheelchair-accessible toilets, and other accommodations.

All of these requirements may significantly increase the cost of rebuilding. Unfortunately, standard commercial property insurance policies provide very little coverage for these higher costs. Most will pay either 5 percent of the amount of insurance on the building or $10,000, whichever is less, for the increased cost of construction resulting from a local ordinance or law. Therefore, the amount of insurance available for a building insured for $150,000 is $7,500; the amount available for a building insured for $500,000 is $10,000. The costs of demolition and rebuilding up to new codes or at a new location can quickly use up this relatively small amount.

Building owners should consider buying additional insurance to cover this possibility. Many insurance companies offer ordinance or law coverage for an additional premium. This coverage will pay for the additional costs of demolition and construction unless the costs result from failure to comply with previous ordinances or from the release of pollutants. Included are three distinct coverages for the specified building:

  • Coverage A – Loss to the undamaged portion of the building
  • Coverage B – Cost of demolishing the undamaged portion of the building
  • Coverage C – Increased cost of construction or repairs to comply with ordinances or laws

The amount of insurance available under Coverage A equals the amount of insurance covering the entire building. Separate amounts apply to Coverages B and C. There is no coverage if the damage results from a cause that the policy excludes. For example, most policies do not cover flood damage, so the policy will not pay if the law requires the owner to demolish the building after a flood. Also, the insurance will pay only the amount necessary to meet the minimum requirements. The insurance will not pay for the cost of exceeding requirements during rebuilding.

This insurance covers the owner only for the cost of repairing or replacing the building, not for income lost during additional reconstruction time. Separate coverage is available for this exposure.

An insurance agent can advise building owners on the types, amounts, and costs of coverage they may need to meet updated codes. Whether or not they ultimately decide they need the coverage, they should give it careful consideration. The last thing any owner wants is a surprise uninsured expense after a disaster.

Utilizing a Wrap-Up Program for a Large Scale Construction Project

Large construction projects are often difficult to finance because of high costs and increased risk. One way to decrease the cost of the project and lessen the risk is through “wrap-up” insurance programs.

Under this type of program, one group of insurance policies covers all parties involved in the project for the length of time it takes to complete the project. This insurance is underwritten for the specific exposures of the project and it protects the project owner, contractors, and all subcontractors. Most wrap-ups include workers’ compensation, general and excess liability, and builder’s risk coverage. Wrap-ups can also include professional liability, environment liability and other essential coverages.

These wrap-up programs can be initiated either by the project owner or the general contractor. When the owner controls them, they are referred to as “owner controlled” insurance programs (OCIP). When the general contractor intiates the program, it is called a “contractor controlled” insurance program (CCIP). The minimum size for a wrap-up to make sense is generally $100 to $150 million in hard construction costs.

The most common reason that wrap-ups are used is for potential cost savings. Subcontractors always include in their bids the cost of insurance for a project. Depending on the type of work the subcontractor performs and location of the work being performed, the subcontractor’s insurance cost could add several percentage points to their bid amount. By insuring all of the subcontractors under one insurance program, the owner/general contractor can realize a substantial savings.

Wrap-ups not only save money on premiums, but additional cost savings can be gained through the design of the insurance program itself.  Many wrap-ups are written using risk sharing techniques, such as larger deductibles or retrospective rating. Retrospective rating is a premium calculation formula in which the final premium is not determined until the end of the coverage period. The insurerreviews the owner/general contractor’s losses after the policy ends, and adjusts the premium based on those losses.However, the premium is subject to a maximum and minimum. If a project is well run, this can result in a significant premium reduction. Wrap-ups have also been written at fixed rates for the duration of the project.

Another reason for a wrap-up is that it enables an owner/general contractor to fulfill Minority Business Enterprise (MBE) and Women Business Enterprise (WBE) requirements on public projects. If the controlling government authority of a project requires that minority contractors must be hired, a wrap-up may be the only way to meet this standard. That’s because many minority contractors may not be able to afford the level of coverage required by the government authority and would be unable to bid on the project. If the owner/general contractor is providing all necessary coverage, this removes the obstacle of being unable to pay for insurance that would prevent an MBE or WBE from bidding.

Aside from potential cost savings, wrap-up programs can also provide a measure of asset protection for owners.  With most construction projects, contractors are individually required to secure and maintain the minimum insurance required under their contract.  While owners may have a certificate of insurance to verify coverage, there is no guarantee at the time of a loss that the insurance will be in force, the coverage will be sufficient, or the necessary limits will be available due to the contractor’s claims activity at other projects. This is a critical aspect that is often overlooked during the decision making process.

A Well-Designed Affirmative Action Plan Can Help You Avoid Discrimination Lawsuits

In an article titled Litigation Explosion, which appeared in the December 10, 2006 edition of the Arizona Daily Star, author Becky Pallack discusses a University of Arizona study that says employee lawsuits are on the rise:

“The researchers analyzed data from the U.S. Equal Employment Opportunity Commission and found 95,115 claims of employment discrimination nationwide in 2005.Federal employment discrimination lawsuits are up 268 percent since 1991, rising at a rate nine times as fast as other types of federal civil litigation.”

The financial effect on business from this increase in litigation has been devastating:

“For employers, the fallout from the lawsuit boom is expensive. Employers facing discrimination lawsuits were ordered by courts to pay $101.3 million in 2005, up nearly 600 percent from $14.7 million in 1992; and employers paid another $271.6 million in settlements, up 130 percent since 1992.”

As if this wasn’t enough, the EEOC has begun a new initiative, E-RACE (Eradicating Racism and Colorism from Employment), which is designed to improve the agency’s efforts to ensure workplaces are free of race and color discrimination. As part of this new strategy, the EEOC has said that it plans to “identify issues, criteria and barriers that contribute to race and color discrimination, explore strategies to improve the administrative processing and the litigation of race and color discrimination claims, and enhance public awareness of race and color discrimination in employment.”

With this increased emphasis on workplace discrimination, it is more important than ever to develop an effective affirmative action plan. Here are some tips to help you design a road map for ending discriminatory practices in your company:

·   Show commitment – Determine your diversity goals, make a plan to reach those goals, and then work the plan to its conclusion.

·   Identify the specific inequities you want to address – Before you create your diversity plan, perform the analysis required by law to identify what imbalances exist between the makeup of your workforce and the diversity of the workforce in the surrounding area. These are the areas your plan needs to address.

·   Perform an analysis of barriers to success – You will need to list what barriers to diversity exist in your business before you can create an effective affirmative action program. Start by asking yourself if individuals from a particular class are underrepresented in a job category. If the answer is “yes,” you need to figure out why. Is it because you recruit through word of mouth, which may be perpetuating your company’s homogeneous workforce? Where do you conduct interviews for new employees? Is it accessible to all types of applicants? If you advertise in newspapers, are they readily available to different ethnic populations?

·   Target the specific practice(s) that need altering – The corrective measures you select must be designed to remedy the imbalances identified in your assessment. If your company’s interview process puts minority candidates at a disadvantage, then focus on recruiting practices. If you have a lack of inclusion in a job category because you cannot find employees with the necessary skill set, then consider a more proactive job-training program.

·   Specify a timetable to accomplish goals – Have a clear picture of what the program needs to accomplish, and when that progress needs to take place. The ultimate success of your program is dependent upon having a quantifiable time line that clearly establishes the date by which each of your goals will be accomplished.

Preventing MRSA Infections on the Job

Americans have become increasingly aware of the “superbug” MRSA (methicillin-resistantstaphylococcus aureus) because of the number of outbreaks that have been reported among school children. However, most people don’t realize that adults are just as susceptible to getting a MRSA infection at work.

To avoid becoming infected, you need to understand what the disease is, and how to prevent it. MRSA is a type of “staph” infection. Staph is a bacterium commonly found on the skin or in the nose of healthy people; however, it can sometimes cause an infection. In fact, staph bacteria are among the most common causes of skin infections in the United States. When these infections are minor, they appear as pustules and boils, and can be easily treated without antibiotics. When the bacteria cause serious infections, such as surgical wound infections, bloodstream infections or pneumonia, they need to be treated with antibiotics.

MRSA isresistant to a type of antibiotic called methicillin and is often resistant to other antibiotics, too. According to the National Institute for Occupational Health and Safety (NIOSH), between 25% and 30% of the population have staph bacteria present on their bodies, but it isn’t causing disease, and about 1% of the population carry MRSA that is not causing an infection.

The most common way a MRSA infection is transmitted is by direct skin-to-skin contact. It also can be contracted by coming into contact with items or surfaces that have been touched by someone carrying the infection. Although a MRSA infection can happen anywhere, these five conditions can facilitate its transmission:

1.   Overcrowding-working in close surroundings in which there are frequent incidents of rubbing against or touching co-workers.

2.   Direct contact-coming into frequent skin-to-skin contact with co-workers.

3.   Compromised skin-having an open cut or abrasion in which the bacteria can settle.

4.   Contaminated surfaces-commonly used surfaces such as a cafeteria table that may have been infected by someone with the disease.

5.   Lack of cleanliness-failure to frequently disinfect commonly used areas in a facility.

You may not be able to control how much contact you have with co-workers, but you can take steps to protect yourself. Here is what NIOSH recommends:

·      Cover your wound.  Keep wounds that are draining or have pus covered with clean, dry bandages. Pus from infected wounds can contain staph and MRSA, so keeping the infection covered also will help prevent the spread to others. Bandages or tape can be discarded with the regular trash.

·      Clean your hands. Wash your hands frequently with soap and warm water or use an alcohol-based hand sanitizer, especially after changing a bandage or touching an infected wound.

·      Do not share personal items. Avoid sharing personal items such as uniforms, personal protective equipment, clothing, towels, washcloths or razors that may have had contact with an infected wound or bandage.

·      Clean work clothing properly. Wash soiled uniforms and work clothing with water and laundry detergent. Dry clothes in a hot dryer, rather than by air-drying, to help kill bacteria in the clothes.

·      Clean contaminated equipment and surfaces with detergent-based cleaners or Environmental Protection Agency (EPA)-registered disinfectants.  This is an effective way to remove MRSA from the environment. Because cleaners and disinfectants can be irritating and exposure has been associated with health problems such as asthma, it is important to read the instruction labels on all cleaners to make sure they are used safely and appropriately. The EPA provides a list of EPA-registered products effective against MRSA, which can be found by logging on to https://epa.gov/oppad001/chemregindex.htm.

Help bring MRSA under control in your workplace by following these precautions.

Crime Prevention Tips for Your Business

There are a number of simple preventative measures any business owner can employ to reduce crime. Consider the following tips and suggestions.

 

Robbery Safeguards

·  Ensure that your establishment is well lit from both within and without.

·   Avoid cluttering your front windows with bulky displays or signs.

·   Keep the cash register near the front of the store in a visible location that can be seen by both pedestrian and vehicular traffic.

·   Conduct bank deposits on an irregular basis. Deposits should also be performed during business hours and as often as necessary.

·   Maintain a minimal float to be kept in the register at any particular time. Place excess funds in a safe which cannot be accessed by other employees. Clearly display your cash register minimal funds policy.

·   Train your employees in robbery procedure and especially emphasize cooperation with the robber by handing over the till cash without objection or hesitation to prevent injury. 

Burglary Safeguards

·   Use deadbolt lock systems for all exterior and interior security doors.

·   Remove obstacles to make the interior of your business visible to the outside.

·   Install mesh covered exterior lights for all access points and have adequate interior lighting when the store is closed.

·   Leave your cash register open and empty.

·   Install glass which is burglary resistant or have metallic mesh or metal shutters covering the exterior of all windows.

·   Avoid leaving expensive items in display windows if visible to street traffic.

·   Use a safe that is not only well anchored but also fire proof. If the safe is empty then leave it open at closing time.

·   Alter the safe combination and/or alarm code with the departure of any employee who had knowledge of either.

·   Perform a thorough check of all windows, doors, alarm systems and interior of the business at closing time.

·   Eliminate exterior blind spots that might offer concealment to a potential burglar.

·   Research and seek knowledgeable professional assistance to install an alarm or video surveillance system suitable to the needs of your business. 

Reducing Vandalism

·   Install good exterior lighting to illuminate potential areas which may be vandalized or spray painted.

·   Clean up exterior graffiti as soon as possible. Try to employ paint resistant material or prohibit access to the exterior of the building with prickly hedges or shrubbery, or even metal fencing.

·   Prevent access to stairwells or other exterior blind spots which might conceal vandalism activities. 

Reduce Shoplifting

·   Identify and eliminate blind spots within your business.

·   Train employees how to identify potential shoplifters and the methods they employ.

·   Have only one point of entry and exit where possible and place the sales counter near the exit. Have your register manned or locked at all times.

·   Use concave mirrors or video surveillance at strategic points within your business.

·   Lock up all small, expensive items in display cases which can only be accessed by designated employees.

·   Do not place merchandise too closely to exits to prevent ‘grab and dash’.

·   Clearly display store policies about the number of dressing room items and indicate that you have a video monitoring system in place. Clearly indicate that shoplifters will be prosecuted.

·   Do not allow employees to congregate.

·   Use bar codes and inventory control equipment and/or theft prevention devices at the exits.

Connection Between Overtime and Safety Might Be Overstated

In a study documented in the February 2007 edition of the Journal Of Occupational and Environmental Medicine, Harris Allen Jr. PhD, Thomas Slavin MS, MBA, and William Bunn III MD, JD, MPH, determined that despite research to the contrary, there is no evidence that long work hours cause across the board adverse outcomes for employees. The researchers did say that when weekly schedules hit 60+ hours, workers did report new injuries and health problems, but these were mostly attributable to factors like prior poor health rather than to the long hours themselves.

The study was conducted by comparing information compiled in a database for almost 2800 workers at a heavy manufacturing plant. The researchers analyzed the effects of work hours on a broad range of health, safety and productivity outcomes. The unidentified company used in the study strongly encouraged employees to work overtime, but didn’t mandate it. Workers at the plant clocked an average of 43 hours per week.

The results of the comparison challenged the widely held belief that each hour an employee works beyond 40 hours increases health and safety risks and reduces productivity. In fact, the researchers didn’t find any negative effects until the 60-hour-per-week mark. And even when workers reached this mark, the only negative consequences the researchers found were an increased risk of workers’ compensation claims for hourly female employees with a history of such claims and new musculoskeletal diagnoses for older workers.

Furthermore, while employees in these two subgroups showed a higher rate of injuries and other health problems when they worked 60+ hours, employees with other job and demographic characteristics showed no additional safety or health problems when they worked schedules of 60 or more hours. In addition, employees who worked from 48 to 59 hours showed no increase in physical or mental health issues regardless of their job and demographic characteristics.

The researchers went on to note that their findings also challenged policies like the Working Time Directive established by the European Union to protect workers from exploitation by employers. While it addresses employment issues such as how many breaks employees can take, and how much time off they are entitled to, the directive’s most significant regulation is aimed at limiting the average working time for employees in the European Union to 48 hours a week.

The conductors of the study believe that policies like this one may provide an obstacle that keeps private-sector employers from being competitive. They felt that employers whose operations are structured in ways that are maximized when employees work overtime were especially hindered.

The researchers concluded that although work hours are a factor, they should be considered in conjunction with other factors that comprise the larger context within which employee health, productivity and safety outcomes are determined. More emphasis needs to be focused on prior health and other factors that may be exacerbated by the number of hours worked. These are better predictors of employee safety and lost productivity.

Ten Tips for Avoiding Legal Malpractice

Statistics show that in any given year, a minimum of five to six insured lawyers out of every 100 in private practice experience a malpractice claim, according to the Colorado Bar Association. In other words, a firm with 20 lawyers could be the recipient of a claim every year. As exposure to legal malpractice claims continues to rise, it is an important function of law office management to establish effective loss prevention practices:

·   Develop a standard calendaring system – This should contain all items to be calendared, deadlines for the various cases being handled, as well as deadlines for critical events. It should also include frequent reminder dates. The most effective calendaring system will have tracking procedures that identify the author of a particular entry.

·   Know the signs of substance abuse and depression – Heavy workloads can often result in an attorney becoming depressed or compensating through substance abuse. Knowing the warning signs associated with each scenario can prevent the firm from being hit with a malpractice suit because of a dysfunctional attorney. Symptoms of substance abuse include Monday morning tiredness, missing deadlines and appointments and neglecting mail and phone calls. Behavioral changes associated with depression include misplaced anger, frequent bouts of crying, self-criticism, becoming easily distracted, and lack of interest in every day activities.

·   Maintain good client relations – When accepting a new client, an attorney should discuss the purpose for which the firm was hired, reporting schedules, fees and billing arrangements, and client obligations. All of this information needs to be documented in writing and given to the client. Also, be sure the lines of communication remain open throughout the attorney-client relationship.

·   Screen clients carefully – Establish a policy of screening clients using a pre-determined set of criteria. Hold each attorney accountable for using those criteria.

·   Conduct thorough research and investigation – Some of the most common errors include failure to correctly apply the law, failure to determine a deadline, inadequate discovery and investigation, poor planning, and errors in the choice of procedure. The attorney of record should review staff work to ensure the accuracy of their work.

·    Avoid conflicts of interest and matter – Avoiding conflicts of interest involves establishing and updating a database of all clients and matters handled. To avoid conflicts of matter, create the practice of circulating a “new matter memo” to all attorneys and support staff whenever the firm accepts a new case. 

·   Never become inappropriately involved in a client’s interests – Accepting a director role in a client’s company, investing in a client’s securities, transacting business deals with a client, agreeing to contingent cash fees, and soliciting investors for a client’s business can result in a host of problems.  For example, the firm could be held liable for the attorney’s activities as the director in a client’s company or face conflict of interest charges because of an attorney’s personal involvement or investment in a client’s business.

·   Document all work – Establish a system for verifying the accuracy and content of all documents such as letters, briefs, contracts and motions. Also create separate files to store all documents prepared or received for each client matter.

·   Avoid fee disputes – Document fees and the scope of work in all matters. Bill on a monthly basis unless the client has asked for a different arrangement. Provide the client with detailed billing statements that include who performed the work and how much time was required.

·   Never delude yourself into believing you are immune from a malpractice suit – Your best defense is to remain acutely aware of how prevalent malpractice suits have become. It is this awareness that will motivate you to establish and maintain effective loss control procedures.

Your Hands Need Protection from Work Injuries Too

You probably aren’t aware of how complex a piece of equipment your hands are. There are a total of 27 bones in your hand and wrist. These bones are joined together by ligaments, which also hold the joints in place. Nerves carry messages from your brain to your hands and fingers to help them move. All of this intricate machinery is wrapped up in a layer of skin.

The skin provides a barrier against foreign objects, as well as heat and cold. The skin on the back of your hand is thin and elastic, but on the palm, it is thicker to provide traction, cushioning and insulation.

Just like any other delicate piece of equipment, your hands need to be safeguarded while you are working. The most common sources of injury stem from mechanical hazards from tools, equipment, machines, structures and vehicles such as:

·   Chains, gears, rollers, wheels and transmission belts

·   Spiked or jagged tools

·   Cutting, chopping and grinding mechanisms

·   Cutting tools such as knives and presses

·   Falling objects

You can make your hands less vulnerable to these risks by following these safety tips:

·   Work at a pace at which you feel comfortable – The number of hand injuries you will have is in direct proportion to how quickly you work.

·   Keep alert – Stay focused on what your hands are doing whenever you are using tools or machinery.

·   Use a push stick to feed a circular saw.

·   Handle the tools and equipment you work with properly – Never take shortcuts.

·   Use wrenches that properly fit the nuts and bolts you wish to tighten.

·   Use long magnetic poles for retrieving items from places that are too dangerous for hands to reach.

·   Don’t hold the workpiece in your hand while using a hand tool because the tool could slip and cause injury.

·   Never try to repair power tools or machinery without first checking that the power is shut off and the machine is locked out.

·   Wear the appropriate gloves when handling chemical substances.

·   Wash your hands thoroughly with soap and warm water or use special cleansers, especially after direct contact with a chemical substance.

·   Don’t wipe your hands with chemically contaminated rags.

·   Don’t operate machinery if you are taking any medication unless your doctor tells you it is safe to do so. Some drugs can slow your reflexes, which makes your hands vulnerable to injury. 

Specialized Insurance Available for Green Construction

Weather patterns have become increasingly erratic over the last several years. Heat waves, droughts, mudslides, and increased hurricane activity have become the norm. In 2004, four major hurricanes pummeled Florida; the Gulf Coasts of Louisiana, Mississippi and Alabama are still recovering from 2005’s Hurricane Katrina and its ensuing floods. Between these disasters and increasing attention from politicians and the media, the problem of global climate change has become a major issue. As a result, the insurance industry has begun to devise new products and strategies for dealing with this problem.

Some insurers are beginning to offer specialized “alternative energy insurance” policies. For example, one company is writing policies to cover alternative energy system performance. This policy insures against the risk that a deficiency in the design of alternative energy technology will result in the under-performance of a facility. The company designed it to help owner-operators of facilities meet the needs of lenders concerned about their investments. Another company has broadened its coverage for commercial buildings to include alternative energy systems. It also will insure against loss of income when alternative energy systems suffer damage and extra expenses when the building owner must buy power from the grid while the system undergoes repair.

At least one insurer offers special coverage to encourage commercial building owners to replace destroyed buildings with new ones using green technology. It gives the property owner several green technology options, including:

  • Non-toxic, low-odor paints and carpeting
  • Energy-efficient electrical systems
  • Interior lighting systems that meet independent energy efficiency standards
  • Water-efficient plumbing systems
  • Enhanced roofing and insulation materials to reduce heat loss.

Anticipating less severe and less frequent losses, the same company offers rate credits to green building owners. It has found that most losses in traditional buildings are from electrical fires, heating and air conditioning system fires, and plumbing leaks. The company expects green technology to make these events less likely.

Another insurer has introduced for commercial building owners a new policy that encourages green building. It features coverage for:

  • The increased cost of green building alternatives
  • The expense of re-engineering and re-certifying green buildings
  • Vegetative roofs, and
  • Additional time to restore operations so that building repairs can include green alternatives.

Insurers are also educating their clients about the implications of climate change. Recognizing that courts could hold businesses liable for future environmental damage, insurers have worked with corporate boards and officers to encourage planet-friendly business practices. Their hope is that actions taken now will reduce the number and size of future liability insurance claims.

While only a small number of insurers offer specialized policies for green construction now, the success of these products will encourage other companies to follow suit. Also, as green building technologies become widespread, the desire to attract and retain business will force insurers to compete with policies of their own. Insurance agents can identify companies that offer these coverages and make coverage recommendations to property owners.  As businesses and households everywhere take steps to reduce their carbon footprints, make certain that your insurance coverage is keeping up with those steps.

Worksite Safety Is a Top-Down Process

Most safety programs found on construction sites focus on worker buy-in to accomplish safety objectives and create a safer work environment. The typical methods employed have been to train and re-train workers, provide incentives for achieving safety goals, develop disciplinary consequences for failure to comply and monitor the success or failure of the safety program by auditing worker performance. While this methodology provides some measure of success, ultimately, it will reach a point of diminishing returns.

This type of approach is “bottom-up.” In other words those with the least ability to make decisions that can affect outcomes are given the responsibility for the overall success of the system. For a safety program to function as planned, it must be managed properly. Managing requires the ability to plan and control the effective use of resources, assess risk and make decisions to eliminate or at least minimize that risk. These are “top-down” responsibilities, meaning they fall under the responsibility of those in management. Therefore, the success of any construction site safety program has to start with management buy-in and follow through to the workers.

Management buy-in has to be more than just lip service. Workers follow by example, not words. If management fails to carry out safety program requirements by allowing workers to take shortcuts to meet productivity quotas, they undermine the program at its very core. To create a safe work environment, safety procedures must become an inherent part of operations and workers must be required to follow them at all times, even if they might slow productivity.

The most important management figures in this scenario are foremen because they have direct oversight of work crews. The foreman has the authority to direct how work is performed and make necessary decisions to accommodate changes. They should be held responsible for ensuring that the work has been properly planned, a risk assessment has been conducted, and that only safe work practices are followed on the worksite.

There is often a breakdown in the adherence to safety on this level because newly promoted supervisors are not provided management training in directing work flow or managing change. They must be trained to meet the organization’s goals and objectives by managing performance. To manage performance, foremen need to learn how to establish objectives and create standards that will accomplish productivity goals without sacrificing safety. They also need to be trained in how to communicate these objectives to employees and provide motivation to comply. In this way, both management and workers will have clearly established expectations for which they can be held accountable.

The final component in the success of any safety program is the organization itself. It must provide the resources, knowledge, and tools to enable management and employees to be successful. It is this support that keeps the safety program from becoming a stand-alone incentive and rather integrates it into the overall operation, which is the best way to ensure its success.

The EEOC Strengthens Commitment to Filing Class Action Suits

In 2006, the Equal Employment Opportunity Commission changed its strategy when it announced plans to file more class action suits. This shift was predicated on the decrease in the number of private-sector discrimination-related class action suits and increase in wage-hour class actions. As a result of this decline in discrimination class actions, the Commission’s position may indicate a trend toward more government-led class actions in this area.

The EEOC is in a unique position to litigate this type of suit because it is not required to meet the strict requirements to maintain a class action set forth in Rule 23 of the Federal Rules of Civil Procedure. In addition, the agency isn’t hampered by considerations of whether the monetary compensation won will be worth the expense of a trial.

The Commission is also spurred on in its decision by the belief that a national approach to litigating workplace civil rights is necessary due to a lack of consistent effort on the part of the private sector. The Commission itself is guilty of not identifying widespread discrimination in the past, and this shift is seen as attempt to make the agency more proactive.

What means will the agency use to evaluate which cases require class action treatment? Its primary sources will be:

·               Data gathered through EEO-1 surveys of private employers of 100 or more employees

·               Analyses designed by private statisticians who act as consultants to the Commission

·               Charges filed by claimants

·               Its own databases

·               Pending litigation

·               Long-term analysis of EEO-1 reports

In light of this emphasis on rooting out systemic discrimination, employers need to be increasingly vigilant. Here are some guidelines that can help you prevent becoming party to an EEOC-initiated class action suit:

1.                  Keep your affirmative action plans updated so that when analyzing, the data will identify problem areas in recruitment, hiring, transfer, promotion, compensation, termination, or other terms and conditions of employment.

2.                  Review the criteria used for hiring, firing and other personnel decisions to identify standards or actions that can be perceived as discriminatory.

3.                  Review instances in which a personnel decision impacted negatively on an employee or employees to be sure that all criteria used to make the decision was job related and the result of the need to maintain business operations.

4.                  Provide updated training for management involved in interviewing, hiring, job assignment, compensation, job advancement, and termination to ensure that they understand their obligations under the equal employment opportunity laws.

5.                  Inform management of the negative impact that e-mails have on the defense of claims, especially if careless phrases are used, insulting comments are made or e-mails are used for inappropriate purposes.

6.                  Publish company policies that spell out a zero tolerance for all forms of discrimination, harassment, and retaliation. Train non-management employees in those policies and their obligation to report immediately any actual or perceived harassment, discrimination, or retaliation.

7.                  Post and regularly distribute policies regarding reporting harassment, discrimination, or retaliation.

8.                  Develop a program through which employees receive severance pay or other consideration in exchange for executing binding releases that comply with the Older Worker Benefit Protection Act.

9.                  Keep and regularly review electronic data to identify potential problems and to avoid the possibility of it becoming damaged.

Learn How to Protect Yourself from Machine Accidents

In 2002, the Bureau of Labor Statistics (BLS) reported that 92,560 injuries, which resulted in lost time from work, were caused by machinery. The agency ranked the top injury causing machines according to the number of accidents that occurred during their use:

1.   Metal, woodworking and special materials machinery (19,269 injuries)

2.   Material handling machinery (16,183 injuries)

3.   Special process machinery (15,576 injuries)

4.   Heating, cooling and cleaning machinery (13,330 injuries)

5.   Unspecified machinery (6,148 injuries)

6.   Construction, logging and mining machinery (6,069 injuries)

The BLS also found that machinery was the chief source of fatal occupational injuries in 483 of the 5,915 fatalities during 2002.

If you use machinery as part of your employment, you need to know how to protect yourself from the hazards that machines pose. The following list of guidelines for correct machine use was compiled by Wake Forest University:

1.   Wear safety glasses, goggles or safety shields designed for the type of machine work being done.

2.   Be sure that all machines have effective and proper working guards.

3.   Replace guards immediately after any repairs.

4.   Do not attempt to oil, clean, adjust or repair any machine while it is running.

5.   Do not leave a machine while it is running. Someone else may not notice it is still running, and be injured.

6.   Do not try to stop the machine with your hands or body.

7.   Always see that work and cutting tools on any machine are clamped securely before starting.

8.   Get help when handling long or heavy pieces of material.

9.   When working with another person, only one should operate the machine or switches.

10.   Do not lean against the machine.

11.   Concentrate on the work and the machine at all times; it only takes a moment for an accident to occur.

12.   Do not talk to others while they are operating a machine.

13.   Be sure you have sufficient light to see clearly when doing any job.

14.   Wear short sleeves or roll sleeves up above the elbow.

15.    Don’t wear bracelets, rings, etc., when operating machines.

16.    Never use compressed air for cleaning machinery.

Keep in mind that although your company may be extremely diligent about guarding machinery, you must still exercise caution because there are some operations that cannot be completely guarded. You should also remember that even though machines are equipped with guards, it is still possible to get your hands and fingers in a machine’s danger zone.

Adhering to these guidelines and any additional ones that your company has in place should lessen the chances of a workplace machinery-related accident happening to your or your co-workers.

Cover Your Home Office with Necessary Business Insurance

If you run a business from your home, don’t make the error of believing your current homeowner’s insurance policy covers the loss of expensive business equipment. Although many homeowner’s policies offer a small amount of insurance coverage for inventory, there are strict exclusions for liability claims arising from any “for-profit” activities.

While some office-only types of businesses can be insured against liability claims under the homeowner’s policy, professional liability insurance needs would not be included. Insurance packages created specifically for in-home businesses are available at a moderate cost.

An average homeowner’s policy provides only $2,500 coverage for business equipment, which frequently is not enough to cover all business property. You may also need to consider coverage for liability and loss of income. Be aware that insurance companies differ quite a bit in the types of business operations they cover. Taking the time to shop around for coverage options, as well as pricing, will pay off in the long run.

No matter what type of policy you choose, if you’re a professional working out of your home, you probably need professional liability insurance. Depending on the type of in-home business you operate, special policies may be required. You have three basic insurance choices, depending on your specific business:

Homeowner’s Policy Endorsement

In order to double your standard coverage for business equipment, such as computers, you may be able to add a simple endorsement to your existing homeowner’s policy . For as little as $25, you can increase the policy limits from $2,500 to $5,000. Some insurance companies will permit you to increase your coverage up to $10,000 in increments of $2,500.

In-Home Business Policy/Program

An in-home business policy renders more comprehensive coverage for liability and business equipment than a homeowner’s policy. These policies, which are also referred to as “in-home business endorsements,” differ substantially depending on the insurer.

What if you have additional employees working in your home? Some in-home business policies allow a certain number of full-time employees, usually up to three. In-home business policies include extended liability insurance for higher amounts of coverage. For example, they may provide protection against lawsuits for injuries caused by your product and/or service offerings.

Business Owners Policy (BOP)

Developed specifically for small-to-mid-size businesses, a Business Owners Policy is an excellent tool if your home-based business operates in more than one location. A BOP covers business property and equipment, loss of income, extra expense, and liability. These coverage plans are offered on a much broader scale than the in-home business policy.

OSHA to Rule in November Who Pays for PPE

This November, OSHA will finally end the controversy surrounding the matter of who pays for an employee’s personal protective equipment when it issues a final ruling on the subject. Labor unions have been waiting for almost eight years for the agency to complete its rulemaking, which would clarify that employers are supposed to pay for safety equipment.

The controversy began in 1994 when the agency tried to establish a policy and clarify the issue of payment in a memo to its field staff dated October 18th and titled Employer Obligation to Pay for Personal Protective Equipment. In this memo, OSHA stated that for all PPE standards, the employer must provide and pay for employees’ required PPE except for those items that are personal in nature or used by the employee off the job. In these instances the issue of payment was left to labor-management negotiations.

OSHA’s position in the 1994 memo was in response to pending litigation between the Secretary of Labor and Union Tank Car Company. In that case, the employer was issued a citation for not paying for metatarsal foot protection and welding gloves. The Occupational Safety and Health Review Commission (OSHRC) reviewed the case and declined to accept OSHA’s interpretation given in the memorandum. It dropped the citation and found that the Secretary had failed to adequately explain the policy outlined in the 1994 memorandum.

In response to OSHRC’s Union Tank Car decision, OSHA issued the proposed rule, 29 CFR 1910.132, which established that employers pay for all types of PPE as required under OSHA standards except for safety shoes, prescription safety eyewear and logging boots. The proposed rule was predicated on OSHA’s conclusion that the OSH Act implicitly required employers to pay for PPE that is necessary for employees to perform their jobs safely.

In 1997, OSHRC declined to accept OSHA’s interpretation that in the majority of circumstances, employers must pay for employees’ PPE as required under Section 1910.132. OSHA’s response was to start rulemaking proceedings to clarify the party required to pay for PPE in all situations where an OSHA standard requires its use. On March 31, 1999, the agency issued a proposed rule to require employers to pay for all PPE except in a few specific cases. After OSHA received public comments and held hearings, the record was closed on December 13, 1999.

In 2004, the agency re-opened the record because there was a need to evaluate the proposal further, and requested more input from the public. OSHA wanted public comment to address the issue of how to handle certain types of PPE that are usually supplied by the employee, taken from site to site or from employer to employer, and considered to be “tools of the trade,” especially in industries with high turnover.

In January 2007, The AFL-CIO and the United Food and Commercial Workers (UFCW) filed suit against the Department of Labor over its failure to issue a standard requiring employers to pay for PPE.  They asserted that this failure was endangering workers’ lives.

The lawsuit, filed in the U.S. Court of Appeals for the District of Columbia Circuit, petitioned the court to issue an order directing the Secretary of Labor to finalize the PPE rule within 60 days of the court’s order.

On February 16, 2007, The U.S. Court of Appeals for the District of Columbia Circuit ordered the Department of Labor to respond to the unions’ lawsuit by March 19th. However, several days before that deadline, legal counsel for the Secretary of Labor, Elaine Chao, filed papers with the appeals court asking it to hold the case “in abeyance” until the final rule is issued in November.

Take Steps to Prevent Workplace Bias Claims Before They Happen

The Equal Employment Opportunity Commission recently reported that work-related bias complaints increased to 75,768 during 2006 compared with 75,428 the previous year. Discrimination complaints had previously risen to a seven-year high of 84,442 in 2002, but then steadily decreased from 2003 to 2005. The most frequent complaints have remained consistent throughout the years, including allegations of discrimination based on race, sex or retaliation.

This upward trend in the number of suits filed should raise alarms for employers everywhere. The legal cost to defend an allegation of discrimination that reaches trial has been estimated between $75,000 and $200,000. This doesn’t include hidden costs like work time lost because of gathering evidence or giving depositions. It also doesn’t include costs associated with an appeal or with payment of a final judgment.

The National Center for Preventive Law (NCPL) at the California Western School of Law in San Diego recommends that employers practice what it refers to as “preventive law.” That means assessing legal risks and instituting solutions to prevent them from occurring.

To assist employers in creating an effective prevention program, NCPL has established the following guidelines:

·            Manage Compliance – Develop a corporate policy regarding discrimination and document in the employee handbook. Document the specific ways in which corporate policy enforces compliance. Maintain a record keeping system that indicates what actions were taken if policies were violated.

·            Contain Risk – Identify overt employee conduct that could lead to a lawsuit. Also look for less obvious misconduct that encourages or promotes discrimination.

·            Respond to Change – Maintain the longevity and continuity of your policies by including mechanisms that allow for necessary updates caused by new business activities or other organizational developments.

·            State Compliance Policy – Take every opportunity to restate corporate compliance policies, including such practices as having department managers discuss them during departmental meetings or by distributing fliers that remind employees about these policies.

·            Top Level Endorsement – Provide continuing opportunities for senior management to oversee and promote corporate compliance policies.

·            Create Compliance Accountability – Hold all staff members accountable for compliance in every activity they initiate or oversee.

·            Ensure Program Fairness – Be sure practices treat all employees fairly and guard against retaliation for raising compliance issues.

·            Maintain High-Level Oversight – Establish a Compliance Officer who has the authority to initiate, coordinate and review corporate compliance efforts.

·            Reward Success – Promote continued compliance through rewards such as monetary compensation.