Changes in Restaurant Operations- Make Sure the Risk is Covered

The Restaurant industry is beginning to recover from the recession faster than some other industries. The National Restaurant Association predicts flat sales through the end of 2010, which is a good sign compared to the last 2 years! Here are a couple of new things that are happening in the restaurant business that need attention for their risk as well:


1) An emerging exposure and coverage need for restaurants is cyber risk insurance. Like other businesses, restaurant owners rely more and more on the Internet for various aspects of their operation. Using the Internet as a tool to push more business also means new exposures such as data/security breach, copyright or trademark infringement, data destruction and/or corruption as a result of a virus, as well as firewall and network security attacks.

Internet use exposes restaurants to risks that may not be covered under many commercial insurance policies. Make sure you are covered properly.

2) Similarly, restaurants use more sophisticated equipment to operate their businesses than in the past. Whether it is computer-based cash registers integrated with point-of-sale management systems, multiple refrigeration systems, commercial-grade sound systems, or inventory scanners, restaurants are using technology to be more efficient and help manage their business. You just need to make sure that you have equipment breakdown coverage for this technology. It is easy to overlook this coverage.

All restaurants are becoming more sophisticated in their approach to running their business. This is absolutely necessary. Just make sure you are also keeping up with the exposures that are inherent in those changes.

Let me know how your restaurant business or any other business is changing. I would be interested to know what changes you are making, and how it has impacted your business.

Bobby Bland PWCA, CIC

Vice President

Commercial Risk Service

What Is Subrogation and How Does It Affect You?

You purchase insurance to transfer risk from your operations to an insurance company. When you have damage to property or injuries to people, you file a claim so that the insurance company pays the claim. What if somebody else caused or is responsible for the damage or injury? How would you feel if an uninsured person drove their boat into one of your docks or rental boats creating severe damage or injuries? I am sure you would want that person held responsible for the damages or injuries. This is where subrogation comes into play.

Subrogation means that your insurance company sues for reimbursement of claim payments when another party or company is responsible for the damages or injury. The lawsuit could be against an individual or company.

Anytime you have a claim, and your insurance company pays for property damages or injuries to your employees or a third party, it is in your interest to examine whether a third party or company is responsible for the damages or injuries. This is because any claims you have are kept on a historical record by the insurance company and if you have a number of claims and/or very expensive claims, you will be impacted in a couple of ways including higher annual insurance premiums and fewer insurance companies willing to insure your business. If there are circumstances that you are aware of that would lead to subrogation opportunity, please bring them to my attention so that we can bring them to your insurance company’s attention. If your insurance company can subrogate and recoup the cost of the claim payment they paid on your behalf, the claim you had will not impact your future insurability. This will help to keep your insurance premium as low as possible and allow you to purchase insurance from the very best companies.

Examples of subrogation opportunities include but are not limited to:

1. Equipment or tool failure causing property damage or injury
2. Any damage to your property caused by a third party
3. Any employee injuries caused by a third party or equipment/tool failure
4. Any auto accident where someone else was at fault or due to mechanical failure
5. Any boat accident causing damage to your boat or injuries to your employee(s)

If any of these things occur, I would want contact info of any person involved, and if a piece of equipment or tool fails, I would need the company name of the manufacturer, the model and serial number of the piece of equipment or tool.

If a claim payment is small, usually under $5,000 or so, an insurance company generally won’t subrogate because it costs them more than it’s worth to go to court. Each company has their own guidelines. However, as claim expenses grow, your insurance company will definitely consider subrogating and that is definitely in your interest so keep your eyes open for any opportunities such as those listed above.

Ask yourself if any other agent has brought this to your attention in the past? Ask yourself if you have had any claims in the past where subrogation would have been possible? I am always interested in hearing about claim stories and how the claim was handled by the insurance company so if you have any good stories, please comment on this blog.

Doug Timmons, CIC, CMIP

Marine and Resort Insurance Specialist

Commercial Risk Service

What makes a business stable and profitable?

In my years in this business, I have seen all ends of the spectrum regarding how people run their business. There’s the hands-on type that is actively involved and calling all the shots. There’s the owner who is basically incognito- he is rarely there or never there, but he has quality people throughout the organization. I’ve seen sloppy work areas as well as back-room floors so clean you could eat on.

Well run companies that are growing and/or prospering don’t all look the same. In addition, poorly run businesses that are either losing market share quickly and/or profits as well aren’t cut out of the same cloth. One of the great strengths about our country is that if you own a business, you can choose to run it any way you want, as long as it is within the boundaries of being legal. Good managers come in all shapes and sizes.

There are, however, a few common threads that I have witnessed among those businesses that I have come across that are stable and profitable over the long haul. In every instance, the management team, including the owner or leader, exhibits the following traits:

1) The key management people in the organization, including the owner, show that they genuinely care about the employees throughout the business. They understand that their people are the reason they have been successful.

2) As a part of that concern for their employees, the management team creates a discipline within the organization of making sure their employees know how important safety is for everyone. When an employee is injured, they do everything they can to take care of that employee. Because of this great working environment, the employees in turn pay attention to safety, and when they are injured, they do everything they can to get back to work as soon as possible. They help to police the safety throughout the organization.

3) Because the employees feel that their employer cares about them individually, there is very little turnover, which creates a much better and more profitable working environment.

In short, I have found that caring about your employees and making sure they are safe and taken care of is directly linked to your long-term profitability. The effort and resources you spend making sure your employees know that you appreciate and care for them will come back to you in the long run.

You don’t necessarily need a huge safety manual or a “safety committee” to have a safely run business. The most important thing you can do for safety is to show you care about it. Many of you business owners that are reading this blog are the very people I am talking about. Your safety program and your business is a success because you have shown you care about your employees!

Self-Funded Products Re-Emerge in the Benefits Market

There has been a recent push in the benefits market for self-funded (partial self-funded) products. The products are targeted at the 50-200 employee group sizes. These types of products are not new. They have been around for a number of years, being very popular about 20 years ago. The recent re-emergence is caused, in part, by the new healthcare reform act. If you are considering this type of product, please proceed with caution.

Why should you proceed with caution? Most of you are familiar with the fully-insured plans. You pay your monthly premium, and your carrier pays the incurred claims. Self-funded plans are different and they can be both tricky and confusing. The first important component to a successful plan is to find the right Third Party Administrator (TPA). Your TPA actually processes your claims and pays them as well. They negotiate pricing for re-insurance and can also find the best network of providers to fit your company. Where you need to be very careful is regarding the various funding methods that support your plan throughout the year. Does your re-insurance carrier pay for large claims immediately, or do you have to pay them and wait from re-imbursement? As you can imagine, if not done correctly, that could be a huge drain on your cash reserves. What happens if you decide you want get out of the plan and go back to fully-insured? If that happens, you have to consider what is called “run-out exposure”. In other words, you are responsible for any claims that were incurred before you terminated your self-insured plan. These “run-out claims” could continue for 90-180 days. If you contract is not done correctly, you are left with this cost exposure.

Now that I’ve seemingly talked you out of the self-insured product, let me say that there are good, safe products out there. The key is finding a trusted insurance advisor that has adequate knowledge of this market. One that can find you a plan that has all of safe funding mechanisms built in. If that is done, the self-insured market is not something to run from.

Attitude is Key Factor in Disaster Preparedness

Corporations and individuals often underestimate their exposure to risk and are consequently unprepared for disaster when it strikes, say experts who study risks. Howard Kunreuther, professor of Decision Sciences at the Wharton School of Business, discussed the failure of many to adequately prepare for catastrophes. “There is a psychology of denial at play, where many believe that a disaster will not happen to them, and it is very difficult to change their perception”, says Dr. Kunreuther.

In my own experience as a risk reduction specialist, what Dr. Kunreuther says is very true. Business owners are geared to deal with whatever situation comes up that day, not necessarily a future problem. Businesses are in a “survival” mode, and that certainly is understandable in this economic environment. However, there is more to being an insurance agent than just selling insurance than just satisfying the creditors for a business. I see it as my responsibility to let you know some of the potential dangers that lie in front of the business owner.

The key question here is this: If a major disaster happens to your business, how are you going to handle it? Just having insurance may not be enough. How are you going to handle several key questions?

---How will you maintain you current customer base if you are shut down for a long period?

---If a disaster occurs, how fast can you get up-and-running again, and how will that happen?
    Who is responsible for what?

---Do I have adequate controls in place to keep us going in case of an emergency?

---What happens if I die tomorrow? Do I have quality people to keep the business going without me?

---Many more important issues

There’s more to a disaster than just the insurance. Reducing your risk and effectively dealing with disasters obviously includes the insurance coverage, but there must be plans in place to keep your business going without any more interruption than necessary as well.

Can you name some major disasters or occurrences that could occur in your business that you aren’t prepared for? I bet I can!

The template for a disaster recovery plan is fairly simple. The process of putting it together is much more complicated. Let us know if we can help you with that process.

Maintaining and Documenting Boat Rental Fleet Maintenance is Critical

I have often discussed the importance of using strong boat rental checkout procedures with my marina and resort clients. Strong checkout procedures are critical in any successful boat rental operation. Another equally important issue is proper boat maintenance and documenting the maintenance of each boat in a rental boat fleet.

A marina or resort’s boat rental customers will often be inexperienced in the operation of a watercraft. Strong checkout procedures will help the rental customer in the operation of the boat but a poorly maintained boat can lead to potential injuries related to equipment failure. A poorly maintained motor can lead to engine failure and even fire.

Potential lawsuits related to boat rental operations are usually based on an allegation that the rental company failed to insure that the rental customer was properly checked out on the safe operation of the boat, which led to injuries or property damage. Lawsuits can also allege that the rental company failed to perform proper maintenance of the boat, which then led to injuries or property damage.

To reduce the risk associated with boat rental operations, it is essential that boat rental companies use strong boat rental checkout procedures and it is just as important to perform proper boat maintenance based on the manufacturers maintenance schedule for each boat in the boat rental fleet. It is critical to document that maintenance by using written maintenance records for each boat in the fleet and keeping those on file for at least 3 years. Those records should be kept in a safe and secure location away from the primary rental operation.

If you have a boat rental operation, ask yourself if you are using good checkout procedures as well as performing proper boat maintenance and if you are maintaining those maintenance records. You never know when you might need to pull information from past boat rentals to protect yourself from a lawsuit.

For boat rental operators, have you been sued due to your boat rental operations?  If so, I would like to hear from you.  Please comment on this article.  Thanks!

Doug Timmons, CIC, CMIP

Marina and Resort Insurance Specialist

Commercial Risk Service

CRS to put on a great educational opportunity for Non-Profit Organizations

Commercial Risk Service will be offering a Workshop/Seminar on Thursday, January 27th geared toward educating the Non-Profits in Northwest Arkansas. All Non-Profit Organizations are welcome to attend. The Workshop/Seminar will be held at the DoubleTree Hotel in Bentonville and will begin at 8:00 that morning and last until 10:00. A free breakfast will be served starting at 7:30 for all workshop attendees.

Key areas of information include:

1) How to make your non-profit more competitive Information on how the non-profit world is changing, and how you need to respond to those changes. Key operational changes that need to be made within the organization.

2) Sarbanes-Oxley Best Practices Helpful information from a CPA firm about how to correctly and legally respond to this relatively new process, and how it affects your operation.

3) Blending resources for the community Information from a key player in the NW Arkansas Non-Profit community that shows Non-Profits how to work with people of limited resources and abilities and make it as easy for them as possible to help themself.

If you would like to sign up for this particular workshop, please click on the link below.

http://www.commercialriskservice.com/seminars.html

As we have stated many times, one of CRS’ commitments to our customers is to give them the most educational information we can in order to help them learn how to improve their operations and reduce their risks in the process. This Workshop/Seminar for our non-profit friends in NW Arkansas is just another example of that commitment. If any of you have suggestions for future workshops or seminars, please respond and let us know what would be important for you.

Amendment to Regulation on “Grandfathered” Health Plans under Healthcare Reform

On June 17th, the Departments of Health and Human Services, Labor and the Treasury (the Departments) issued the “grandfather” regulation which, by addressing how health plans can retain a “grandfathered” exemption from certain new requirements, helps protect Americans’ ability to keep their current plan if they like it. At the same time, Americans in grandfathered plans will receive many of the added benefits that the new law provides. The regulation also minimizes market disruption and helps put us on a path toward the competitive, patient-centered market of the future.

The grandfather regulation includes a number of rules for determining when changes to a health plan cause the plan to lose its grandfathered status. For example, plans could lose their grandfathered status if they choose to make certain significant changes that reduce benefits or increase costs to consumers. This amendment modifies one aspect of the original regulation.

Previously, one of the ways an employer group health plan could lose its grandfathered status was if the employers changed issuers (carriers)-switching from one insurance company to another. The original regulation only allowed self-funded plans to change third-party administrators without necessarily losing their grandfathered status. This amendment allows all group health plans to switch insurance companies and shop for the same coverage at a lower cost while maintaining their grandfathered status, so long as the structure of the coverage doesn’t violate one of the other rules for maintaining grandfathered plan status.

Wayne Perkins

Commercial Risk Service

479-273-1376

Wayne@CommercialRiskService.com

Safety- A Matter of “Awareness”

Let me ask you a couple of questions about safety in your workplace:

---Do you have a safety manual, but you don’t know exactly where it is because there is so much dust on the manual you can’t see it?

---Does your Safety Committee consist of you and 3 other people that haven’t worked for you in 3 years?

The truth is, Safety manuals and Safety Committees are good to have, but they are not really effective tools in keeping your employees from having on-the-job injuries.

Twenty years ago (yes, that’s right- 20), I worked for a grocery chain, and we were having a lot of injuries to our employees. Our Worker’s Comp costs were going through the roof, and we couldn’t figure out how to stop them. We had about 300-400 employees, so we decided to put in a partially self-funded plan. Now each store and its manager was responsible for the claims frequency and severity of its own employees. Their store was charged for the claim. As a matter of fact, part of the Manager’s bonus was based on injuries during the year. GUESS WHAT HAPPENED TO OUR FREQUENCY OF EMPLOYEE INJURIES- We had a 75% reduction in frequency and a 50% reduction in severity!!!

I tell you that not to suggest you go to a partially self-funded plan, but to help you understand what really matters in safety on the job. One thing changed- there was accountability for actions, and the managers made sure every employee knew how important it was for them to be safe! Voila- a Safety Program that works!

So, in conclusion, if you really want to reduce on-the-job injuries, there are two things I can recommend that I KNOW will help:

  1) CARE about keeping your employees safe
  2) Let the employees know safety is important to you- make them aware

Sounds pretty simple, doesn’t it? In reality, its hard work, but I can assure you it is easier than making your employees read the safety manual!!!

Does anyone have any experiences about safety they would like to share?

Commercial Insurance Rate Increases and What Causes Them

Many business owners ask me what causes their insurance rates to increase. There are often multiple causes for rate increases. A business’ loss history can affect insurance rates. If a business has multiple property or liability claims in a three or four year period, company underwriters will start taking a sharper look at that business to determine the risk of similar future claims. If the underwriters view the risk as higher than other similar businesses, they will factor that into their proposal. If claims are frequent or severe enough, some of the more conservative companies will simply decline to quote which will reduce the number of companies in the marketplace. When this happens, there is upward pressure on insurance rates.

Another factor in increasing insurance rates is the overall economy and the stock market. When the stock market is doing well, many insurance companies invest heavily, which is a major source of their profitability. During these times, insurance companies are looking to increase their market share and are willing to insure higher risk companies. Generally, the more competition among insurance companies in the marketplace, the lower the insurance rates for individual businesses.

Finally, regional factors can affect insurance rates for individual businesses. If a particular region of the country suffers an above average claim increase, insurance companies serving that region may decide rate increases are warranted. An example would be recent property rate increases in the marina industry in Arkansas, Missouri, Oklahoma, and Texas. This region suffered very high property losses in 2008 and 2009. In addition to the property losses, the stock market was also struggling during this time. Insurance companies started increasing rates in order to protect their profitability and the ability to serve the marine industry in the future.

How can a business improve their attractiveness to the insurance industry? A good risk reduction program is essential! Any steps that can be taken to reduce the likelihood of future property or liability claims should be taken. Be sure and share this information with your insurance agent. Your agent should be able to help you design a risk reduction program. A good program will help to lower your long-term insurance costs and help insurance company underwriters to provide the best premium rates available.

For more information on risk reduction opportunities, please contact Commercial Risk Service.

Doug Timmons, CIC, CMIP

Marine and Resort Insurance Specialist

Commercial Risk Service

dougt@commercialriskservice.com

Local 479-273-1376 x-25

Toll-free 888-636-0886 x-25

Employee Risk Management: Reduce Your Workers' Compensation Costs

As work environments become safer, the number of workers' compensation claims continues to decline. At the same time, the cost per claim has continued to rise along with the rising cost of health care in general, making the business costs substantial. Along with death and taxes, workers' compensation is something every small business owner with employees must deal with.

As of September 2008, figures from the U.S. Department of Labor's Bureau of Labor Statistics show that businesses spend an average of $28.87 per hour for each employee. This includes salary, as well as benefit expenses such as health insurance, vacation time, and workers' compensation benefits. Overall, 69.7 percent (or $20.13) of the hourly compensation given to employees goes toward salary, and 30.3 percent ($8.74) goes toward benefits, with 1.6 percent ($0.47) of that benefit percentage making its way to workers' compensation. Although 47 cents an hour doesn't sound like much, it adds up over time and can severely impact your business expenses, particularly if this per-hour amount increases.

Job classification is the main factor determining the cost of your premiums. Roofers and construction people, who work around heavy equipment, have the highest risks, whereas office workers have the lowest risk. The basic rates for each job classification are set by each individual state, but there are more guidelines for insurance carriers to follow than there are rules.

By working with your risk management insurance carrier, you can implement both pre- and post-claims programs that will reduce your workers' compensation costs overall. Besides implementing procedures that make your business a more desirable client in terms of insurance rates, you can save even more on your risk management costs by implementing the following practices:

When paying an employee time and a half for overtime, you may only have to report the regular wages, decreasing the amount of payroll that determines your insurance premiums.

Implement programs that bring workers back into the workforce at a faster rate, even if it means bringing them back part time or in a limited capacity. Rising workers' compensation costs are primarily due to increased use of benefits and longer duration of disability. The more time an employee spends on disability, the more wage replacement and medical services increase in cost.

Look for a pattern to claims. Do some locations or areas in your business have fewer claims than others? Determine the reason why. Reducing the number of workers' compensation claims gives your business a better safety record. This makes you a much better risk to an insurance company, making it more likely they will give you better rates in the long run. Overall, this is the best way to reduce your risk management expenses.

Judge Rules Healthcare Challenge Can Go to Trial

On Thursday, in Pensacola, Florida, U.S district Judge Roger Vinson said that crucial pieces of a lawsuit challenging the Obama administration’s health-care overhaul can go to trial. The judge stated that he wants to hear more arguments over whether it’s constitutional to force citizens to buy health insurance.

The ruling also stated that it needs to be decided whether it’s constitutional to penalize, with taxes, people who do not buy insurance and to require states to expand their Medicaid programs. Judge Vinson set a hearing date for December 16th. The lawsuit will likely wind up before the U.S. Supreme Court.

In his 65 page ruling, Vinson largely agreed with the 20 states and the National Federation of Independent Business, saying Congress was intentionally unclear when it created penalties in the legislation. The states have argued that Congress is overstepping its constitutional authority by penalizing people for not doing something-not buying health insurance.

Drug use “snapshot” reports on current levels in Workplace

According to the Substance Abuse and Mental Health Administration, an agency withing the U.S. Department of Health and Human Services, 1 in 10 (10%) of the employees nationwide admit to illegal drug use within the last month- most of them full time employees.

Some of the highest rates of illegal drug users among business types are:

---Restaurants 19.2%

---Construction workers 17.8%
---Truck Drivers 14.7%

Most of the drug use involved marijuana or cocaine.

How effective is your current drug policy within your company? Do you know if any of you employees are operating machinery or driving your company vehicles while under the influence of illegal drugs? How about heavy prescription drugs? This is also a large problem.

Make sure you have a RANDOM drug testing policy that every employee has signed off on. In addition, make it MANDATORY that all employees that have an accident on the job are drug tested within 8 hours of the injury. You are putting your business at a very high risk if you’re not doing both of these things!

In addition, more than 18% of employees were found to be on heavy prescription medication, mostly anti-depressants or barbiturates, while they are at work. Scary, isn’t it?

The Principal to Exit Medical Insurance Business

After careful consideration, The Principal has decided to exit the medical insurance business (insured and self-insured) and has entered into an agreement with United Healthcare to renew medical insurance coverage for customers of The Principal as the business transitions within the next 36 months.
We will be contacting all of our Principal clients to set a time to meet with you personally and review your situation. If you have any questions, feel free to contact Wayne Perkins at 479-273-1376 or wayne@commercialriskservice.com.

Harassment in the Workplace: Business Owner, How Confident are you?

Let me ask you a question: On a scale of 1-10, how confident are you that your employees feel that they are all treated fairly and are adequately and fairly compensated, and that there is no harassment in the workplace?

If you are real truthful with yourself concerning this question, many of your answers may be “7” or below. The truth is, it is impossible to know for sure exactly what all of your employees are thinking. However, if you’re not directing some of the prevention alternatives, you are missing out.

Remember, it’s not the “reality” that matters; it’s the “perception” of your employees. The best way to know what your employees are thinking is to ASK THEM! Part of your annual review process each year should involve giving them a confidential questionnaire called the “Employee Compliance Survey”. This form asks the employee their perception of whether there is harassment of any kind in your work place, as well as any other biases or violations of company policies or compliance. This survey allows you to have an outlet to let your employees know that you care about them, that they have an outlet and a responsibility to let management know of potential problems.

The final step in this process is to RESPOND to any issues immediately and clear up the problem. This reassures your employees that your goal is to have a safe, enjoyable work environment. This survey must be done on a consistent, at least annual basis.

Once again, if you don’t know their perception, ASK THEM!

Business Owners Beware…Do you or your customers hire contractors to perform work at your business premises?

If you do, there are some very important implications for your business. If a contractor is working on your premises (for you or one of your customers) without general liability insurance and injures someone, or damages your property or your customer’s property, you may be liable for the injury or damage. If your general liability policy responds to the claim, you may even owe additional premium dollars for the type of work that the contractor was performing!

For example, let’s say you own a marina and hire a dock builder to build you a new dock. While working, one of the dock builder’s employees drives a forklift into one of your slip rental customer’s parked car, causing $20,000 of damage. If the dock builder is properly insured, you as the marina owner do not have to worry, the dock builder’s general liability policy would pay for the damages. However, if the dock builder did not have insurance, the marina could be sued, and then your general liability policy would have to pay the claim. Your insurance company could then perform an audit and require you to pay additional premium based on the additional “dock building” classification of work. Another marina example may be that one of your boat slip rental customer’s hires a boat mechanic to perform service work on their boat while in your dock slip. That mechanic could cause a fire, damaging your property, and potentially many of your other slip renter’s boats. Of course, the two above examples relate to property damages, it could be much worse if serious injuries or death occurred! The above examples relate to marinas but apply to all businesses that allow contractors to perform work on their premises.

All kinds of businesses hire contractors at various times such as painters, electricians, plumbers, landscapers, etc. Have you thought about what could happen if one of these contractors does something to injure your employees or customers?

It is critical that a business owner takes the appropriate steps to protect his or her business. The best way to do that is to require all contractors who set foot on your business premises to perform services should be required to present a Certificate of General Liability and Workers Compensation insurance to your business manager. This certificate should show $1 million General Liability limits, show the requiring business as an Additional Insured, and document proof of Workers Compensation insurance. You should take steps to monitor the status of these certificates to ensure that you always have a valid certificate on file before allowing contractors to come onto your business premises to work.


Business Owner Self Assessment

1. Do you hire contractors to perform any work at your business premises? Examples could be painters, electricians, roofers, landscapers, concrete contractors, etc.

2. Does your business have customers who may hire contractors to work at your premises? Typical examples could be marinas, apartment buildings, ministorage, etc.

If you answered yes to #1 or #2 above, please continue…

3. Do you require that these contractors provide proof of general liability and workers compensation insurance prior to working at your premises?

4. Do you require that the contractor add your business as an additional insured on their general liability policy?

5. Do you require that the contractor’s general liability policy provide a minimum $1 million limit of insurance?

Doug Timmons, CIC, CMIP

Marine Insurance Specialist

Commercial Risk Service

479-273-1376

dougt@commercialriskservice.com

Staying up to Date on Healthcare Reform

Here’s a timeline of what you can expect from the health care reform law.

2010

As of March 23

*Early retiree reinsurance program, optional as of June 29, 2010

*Temporary high-risk pool for individuals with pre-existing conditions, operational as of July 1, 2010.

*Small group tax credit, effective for tax years beginning after December 31, 2009.

Implemented on the next plan year for all plans (grandfathered or
not) on or after September 23, 2010

*Dependent coverage for adult children up to age 26.

*No lifetime coverage limits.

*100% coverage for preventive services in-network (no required for grandfathered plans).

*No annual limits on certain types of benefits.

*No prior authorization for emergency services
or higher cost sharing for out-of-network emergency services.

*No pre-existing condition exclusions for children.

2011

*No pre-tax reimbursements from health account for non-prescribed, over the counter medications.

*20% tax for non qualified Health Savings Account withdrawals.

*Reporting the value of employer sponsored coverage on W-2s.

*Automatic enrollment in new long-term care program, with ability for employees to opt out.

*Small employers grants for wellness programs for Fiscal Year 2011, so technically starts October 1, 2010.

If you would like additional information please contact Wayne Perkins at 479-273-1376 or send an email to Wayne@CommercialRiskService.com.

America's 10 Most Dangerous Jobs

Ever wonder why your Worker’s Comp premium is so high? There are lots of answers to that question, but if your business is in one of thes 10 professions, here is one of the reasons for your skyrocketing premiums! Here are the 10 most dangerous professions in the U.S., and research has shown:

Fatalities

1) Fisherman 200 per 100,000 laborers

2) Loggers 78.6 per 100,000 laborers

3) Pilots 65.1 per 100,000 laborers

4) Farmers/Ranchers 59.8 per 100,000 laborers

5) Roofers 44.8 per 100,000 laborers

6) Iron Workers 42.7 per 100,000 laborers

7) Sanitation Workers 33.6 per 100,000 laborers

8) Industrial Machinists 26.4 per 100,000 laborers

9) Trucker Drivers 24,3 per 100,000 laborers

(Tie) Salesmen 24.3 per 100,000 laborers

10) Construction Workers 22.8 per 100,000 laborers



How safe is your workplace for your employees?

Negligent Entrustment Claims on the Rise

An accident caused by an employee with an unfavorable driving history can jeopardize the financial stability of your company. Let me ask you something- Do you know FOR SURE that everyone that gets behind the wheel of your company vehicles has an acceptable driving record?

Let’s say that one of your employees has received a DWI in the last 3 years. Let’s also assume that same employee gets in a company vehicle and has an at-fault accident. He (or she) wasn’t drinking at the time of the accident, but the mere fact that you allowed them to drive your company vehicle opens up your company to a “Negligent Entrustment” lawsuit, which will more than likely NOT be covered by your auto carrier. If “Negligent Entrustment” is proven in a court, your business will be held responsible, and it will expose you as the employer to punitive damages that will not be covered under the auto policy in most instances.

Play it safe- check the driving record of every prospective employee as a part of the hiring process and BEFORE you put them behind the wheel. That goes for your current employees as well!

If you have comments or questions, please add under the "comments" section below.

Healthcare Reform

Grandfathered vs. Non-Grandfathered Health Plans

Many questions have been asked regarding the advantages, or disadvantages of grandfathered health plans. The following is a simple explanation provided by my good friend, Cathy Van Zant.

“Many carriers will be administering both the grandfathered and non-grandfathered plans. A grandfathered plan is defined as the plan of benefits that were in effect as of March 23, 2010, which was the enactment date of the Patient Protection and Affordability Act (PPACA). Changes to the grandfathered plan after the 90 day sunset period could cause an employer to lose their grandfathered status. Any groups that began a plan after March 23 is considered as non-grandfathered. The consensus in our industry is that there are few advantages to remaining grandfathered, and in fact, up to 80% of group plans will be grandfathered by 2013. Most of the PPACA provisions that are effective immediately apply to both grandfathered and non-grandfathered plans. The two exemptions are 1) non-discrimination rules as they relate to benefits and eligibility cannot favor highly compensated employees; and 2)mandated wellness with no cost sharing. Neither of this provisions apply to grandfathered plans. The disadvantage to retaining grandfathered status is that it limited the employer’s ability to make changes to their existing plan so it may not be cost effective to do so.”

At this point we are recommending our clients NOT to remain grandfathered.

Watercraft Property Exclusion you may not know about…

Did you know that watercraft insurance polices issued by State Farm Insurance exclude damage to property where the watercraft is kept/moored. This means that marina slip rental customers who insure their boats with State Farm Insurance do not have coverage in the event their boat damages a marina’s dock.

In the past several months, I have seen two separate cases where a slip rental customer’s boat had sunk while in the marina’s boat slip and damage of several thousand dollars was caused to the marina’s dock. In these two cases, the slip rental customer had a Watercraft policy with State Farm Insurance. In both cases, when the slip rental customer filed a claim with State Farm for the property damage to the marina’s dock, State Farm declined due to the policy exclusion referenced above.

This is the first insurance company that I am aware of that excludes coverage for damage to a rented boat slip but there may be others as well. Due to this situation, I would recommend that marina owners/operators change or add language in the boat slip rental agreement that will make it clear to slip rental customers that they must provide proof of watercraft liability insurance with a company that will not exclude damage to property where the boat is kept/moored/stored. Sample language could be… “Watercraft policies that will not be accepted are those issued by any insurance company that excludes property damage coverage to a marina’s boat dock where the boat is kept/moored/stored.”

Of course, a watercraft insurance policy may exclude coverage, but that doesn’t mean that the slip rental customer isn’t liable for any damage to the marina’s dock. By adopting language in the slip rental contract, a marina owner/operator can be proactive with all slip rental customers and educate them about this issue. Most slip rental customers are not aware that their watercraft policy excludes that coverage so notifying them of the possibility is a great way to educate slip rental customers.

If you are an individual who rents a boat slip at a marina, you should check your watercraft insurance policy to see if your policy offers this coverage or excludes this coverage.

Doug Timmons, CIC, CMIP

Marina Insurance Specialist

Commercial Risk Service
479-273-1376

Outbreak of Scabes- Is this Worker’s Comp?

We recently had a customer that experienced an outbreak of Scabes that was originally contacted from one of their residential customers. This very contagious disorder ended up affecting a large portion of a complete department of their business. This created a very interesting question: Is this compensible under the Worker’s Compensation laws?

The answer is that yes it could be compensible under Worker’s Comp because the affliction was contacted “in the normal scope of the employee’s work”. However, the employer decided to handle it themselves and simply pay for the medicine for all of the employees that contracted the ailment.



What do you as a business manager or owner think of the method used by the employer to handle the situation? Is this the best course of action in this situation, or should they have done something different? Also, is there potential for your workforce to encounter some kind of contagious disease, and what will you do about it?

The Truth About Employment Practices Liability

Employee Practices Liability is protection for your

business against current and former employees who

bring suit against their employer for:

Sexual Harassment

Unfair termination practices

Age Discrimination
Gender Discrimination

Disability Discrimination, and many others

DID YOU KNOW:

An employer is more likely to have an

Employee Practices Lawsuit than a General Liability or property claim!

Less than 25% of Employers currently carry Employee Practices Liability

Almost 75% of all litigation against corporations today involves employment disputes.

In the last 6 years, Sexual Harassment complaints to the EEOC are up 131%!

9 out of 10 women said they were subjected to unwanted sexual advances in a recent survey

56% of 616 companies surveyed had a discrimination claim within the past 5 years

Ernst & Young paid $3.7 million age discrimination suit on Plaintiff who was only 46!

Discrimination cases filed with the EEOC are up 77% since 1998

Obviously, if you have 3 or more employees, you probably need some sort of Employee Practices

Liability coverage. Buying the policy is good protection, but not the only answer. The most

important question is how do you reduce your chances of your employees being subjected to

this type of harassment or discrimination:

Make your employees understand from the first day they are hired that you care about them

and won’t tolerate any harassment or discrimination of any kind.

Every employee should fill out an annual form (we call it the Employee Compliance Form) to

that reiterates you company’s commitment to no harassment of any kind, and makes sure

they understand that they can report this kind of behavior at any time without any recourse.

All Supervisory personnel should have training to help make them aware of any such actions

with the employees for which they are responsible. The best way to prevent any Employee Practices lawsuits is to create an environment within your organization that allows your employees to know that you care about them! A happy employee is more productive, healthier, and has fewer claims in Health insurance and Worker’s Comp.

At Commercial Risk Service, our #1 job is to protect you and your business against potential harmful claim situations. Call us for any and all of your commercial insurance needs.

Commercial Risk Service, 479-273-1376 or visit us on the web at www.commercialriskservice.com.

Join us for a Workers' Comp Seminar

Worker’s Comp Seminar- July 8th at the Doubletree Hotel - 7:30 am - 11:00 am.

Come learn more about how to reduce your Worker’s Comp Experience Mod through better hiring practices and injury management. Hosted by Commercial Risk Service.

For more information or to sign up for the seminar, contact Bobby:
 
bobby@commercialriskservice.com
www.commericalriskservice.com/seminar