Friday, August 27, 2010

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.

Friday, August 20, 2010

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.

Friday, August 13, 2010

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

Thursday, August 5, 2010

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?