Strong Boat Rental Procedures For Any Boat Rental Operation

For a boat rental business, it is critical to establish a strong procedure for employees and customers. Many boat renters do not have a lot of boating experience and a strong rental process can be very educational for your customers, while also protecting the business from potential lawsuits related to the boat rental operation. Each employee involved in the rental process should be thoroughly trained in the entire rental process including all checkout procedures and familiarity with each rental boat so that the rental process is consistent with each rental and that the process is documented for each rental.

Strong checkout procedures should do the following:

1. Identify all people who will be on the boat and who will be allowed to operate the boat. Names, address, phone numbers.
2. Identify the boat being rented and have the business phone number within view on each rental boat.
3. Establish the time the rental boat must be back and what are the penalties if it is not back on time.
4. Establish procedures in the event the rental customer is involved in an accident while away from the rental business.
5. Establish what will happen if the rental boat is damaged while under the control of the rental customer.
6. Document the rental process and instruction including:
           a. the operational controls (throttle, horn, lights, steering)
           b. operational restrictions (if any) such as water toys or skiing, scuba, etc.
           c. navigation limits on lake map if applicable
           d. safety equipment and operation of the equipment including life jackets,horn, audible alarms, etc.
           e. fueling/oil procedure where applicable.
7. Establish the watercraft weight/people capacity and document that the vessel is not overloaded.
8. Establish policy related to no alcohol
9. Document whether the rental customer desires a demo ride.
10. Documents that the rental customers will hold the rental business harmless for any damages (including personal injury or death) that may occur while the rental boat is under the control of the rental customer. Each adult passenger should sign!

If the rental business is operating from a marina, it is important to establish a boat loading/unloading area away from the fueling operation if at all possible to minimize potential boat collisions. Remember, your boat rental customer may not be experienced in the different steering dynamics of a boat as opposed to a land vehicle.

A strong rental process is crucial for a boat rental business and will help to minimize the risk of claims related to your boat rental operation. Ask yourself when the last time was that you really reviewed your procedures and took steps to improve that process. Now is the time to do a complete process evaluation and to make any needed improvements so that you are ready for the 2011 boat rental season! I hope you have a prosperous season!

Doug Timmons, CIC, CMIP

Marina and Resort Insurance Specialist

Commercial Risk Service

Health Care Law Costs Result in Lost Job

Many have argued that the Healthcare Reform Law enacted in 2010 will result in job losses due to increased costs. Those that support Healthcare reform disagree. You may have already heard that very large employers like Boeing, Inc and Caterpillar Tractor have said that they will either, reduce jobs, reduce benefits, or completely do away with benefits for their employees.

I read an article today that this effect is occurring right here in Northwest Arkansas. Baldor Electric, of Ft. Smith, has estimated that healthcare costs related to the reform will increase by $2.9 million in the first year. U.S. Rep. Steve Womack, speaking from the U.S. House floor said “Baldor is an example of a company planning to reduce workforce to absorb higher healthcare costs related to the implementation of the new law. How does a company like Baldor absorb that cost? By further automating its processes and thru attrition, allowing 50 jobs to disappear.”

I look for this to be a trend that will continue. More and more of the components of reform are having the actual costs attached and employers are starting to recognize the impact to their bottom line.

What issues do you potentially have with your vacant properties?

Many business people have had rental buildings or rental houses built in the early part of this decade while the economy was going great guns. However, many of those same properties are now vacant, or were never  occupied at all. What are the potential risk and insurance issues you face? Can it be covered? Possibly one  of the worst risks associated with vacant building is mold. Because these buildings are vacant and no one is in them, mold can build up very quickly in an area not watched or occupied. The following is a situation that could happen:

The Situation:

A commercial real estate campus consisting of multiple buildings is faced with a multi-million-dollar mold clean-up when mold is discovered in several of the buildings that have been left vacant for the past couple of years. It turn out that water damage went undiscovered for quite some time because the building was empty.

Mold is part of the natural environment. In the outdoors, molds play a part in nature by breaking down dead organic matter such as fallen leaves and dead trees- but indoors, mold growth is a problem. Mold reproduces by means of tiny spores; the spores are invisible to the naked eye and float through outdoor and indoor air. Mold has the potential to cause serious health problems because it produces allergens and in some cases, potentially toxic substances. Inhaling or touching mold or mold spores may cause allergic reactions in sensitive individuals. It is a MAJOR Liability issue, as well as being very difficult to remove from a building.

There is potential to cover mold remediation and clean-up, even in vacant buildings. It should definitely be purchased.

Coverage basics:

• 1st party clean-up costs

• 3rd party property damage

• 3rd party bodily injury

If you have any vacant buildings, please look into getting environment liability and property coverage. Otherwise, it could be VERY costly to you in the long run.


Bobby Bland PWCA, CIC

Vice President

Commercial Risk Service

Other Costs of Insurance for Business Owners

As an insurance agent, I am asked about the price of insurance all the time. I know price is a very important, if not the most important, consideration for many business owners. This is always a great opportunity to discuss other “costs of insurance” with a business owner because some of these costs are often overlooked.

Overlooked costs include deductibles, coinsurance, audits, policy exclusions, the difference between replacement cost and actual cash value coverage, and unpaid claims. All of these costs can greatly impact a business owner in the event of a claim and should be considered carefully when evaluating an insurance program.

Insurance company underwriters often increase deductibles when particular types of claims have impacted a particular business, industry or region of the country. Increasing deductibles are also a tool used by underwriters to encourage business owners to take greater care in their operations to minimize the risk of loss to property or injury to people.

Coinsurance is a clause in most property insurance policies that can lead to high costs to a business owner in certain claim situations. It is very important to understand how coinsurance works and how you can avoid costs that can be many thousands of dollars!

A business owner should always understand if their insurance policy is auditable. An unexpected audit bill can come as a nasty surprise and could cost a business owner many thousands of dollars!

The most important part of insurance policies can be the exclusions of coverage. It is vitally important for a business owner to thoroughly review their insurance policy and ask questions if any part of it is not understood. Coverage exclusions can mean the difference between a business surviving a claim or going out of business due to an unpaid claim!

In most circumstances, it is better for a business owner to have replacement cost coverage as opposed to actual cash value coverage on their property policy. Do you know on what basis your business property is covered? With actual cash value coverage, property depreciation will be deducted before arriving at a claim resolution and depreciation can amount to many thousands of dollars.

I always make special effort to discuss these other costs with my clients and prospective clients because these other costs can amount to many thousands of dollars and can dwarf the premium cost. Ask yourself if you understand these other costs and whether you have addressed them in your current insurance policy. If you haven’t, now is a good time to review your policy and ask your agent any questions you may have.

Doug Timmons, CIC, CMIP

Marina and Resort Insurance Specialist

Commercial Risk Service

Worker's Comp Insurance- Is it all the same?

There are literally hundreds of Insurance Companies out there that will quote your business- if you have had a good claims history. Are they all the same- we don’t think so.

There are 3 main variables to consider when looking at a worker’s comp carrier:

1) Obviously, price has to be a major consideration.

Are they willing to offer you a competitive rate in today’s price-driven marketplace?

2) How are their claims handled?
Do they simply take the claim and pay the bills, or do they have people that will take the time to understand your business and help you manage the recovery of your employee? A quick response and explanation of what is to come next is essential to mitigating the claim.

3) Do they have an on-going training program?
So many times, we see monoline worker’s comp carriers who are just here to “write the business and get on down the line”. The really goodWorker’s Comp carriers understand that each business is different, and there are special training needs for each business. They have people available that will work with your company individually to prevent future employee injuries.

The other part of this scenario, obviously, is to be working with an agent who is knowledgeable concerning employee injuries- how to prevent them, how to reduce and mitigate them, and how to help you run your business more safely.

There really IS a difference in Worker’s Comp carriers, and the people who work with you and your business.

Bobby Bland PWCA, CIC

Vice President

Commercial Risk Service

2011-New Healthcare Reform Provisions Go Into Effect

Repealing the healthcare reform law is at the top of congressional Republicans’ to-do list this year. But as long a President Obama is in office, he will do anything he can to keep his administration’s marquee achievement on the books. So, as the new law lives on, provisions keep rolling out.

With the start of the new year, the Department of Health and Human Services implemented about a dozen reforms from the Affordable Care Act. Experts say that the 2011 provisions, like some already put in place, could prove popular with consumers-seniors especially-making the path to repeal a bit steeper politically for the GOP.

Medicare beneficiaries stand to gain most from the early 2011 changes. According to Professor Kenneth Thorpe, who heads the Department of Health Policy and Management at Emory University, two provisions will be especially tough for Republicans to eliminate. First, while seniors have been required to pay part of the cost of Medicare services like cancer screenings and annual physicals, the law makes such preventive services free for most beneficiaries. In addition, the law made these services free for those enrolling in new private plans starting last September. Another provision starts closing the coverage gap, also known as the “donut hole”, for seniors on the Medicare Part D drug plan. Now, beneficiaries with drug costs that surpass $2,840 within a year must pay full price for all drugs until their annual drug costs reach $4,550. The new rule offers a 50% discount on brand name medicines for those who fall in that gap. “If you do repeal the law, you’ll have to start charging people for preventive benefits. You’ll have to increase what seniors pay for prescription drugs,” says Thorpe. “Neither one of those [actions] would be very popular.”

Understanding Success

I just finished reading Malcolm Gladwell’s third book “Outliers”. It focuses on the origins of success. Gladwell brings home lessons that should be remembered. Think about how these factors might apply to you or your company:

1) There’s no substitute for hard work.
You and the people at your company must be willing to put in the time and effort to grow the business. No athlete, business person, musician, or anyone else succeeds without hard work. One of my favorite sayings in the book is an ancient Chinese proverb- “No man who rises before dawn 365 days a year fails to make his family rich.”

2) The 10,000 hour rule
If you want to be great at something, or at least be known as an expert, you need to study this subject for at least 10,000 hours. This holds true for anything. Be careful letting more experienced employees go just because “they cost me more”. Losing their tremendous wisdom and experience could leave a big void in your business.

3) The importance of cultural norms
For example, many Asians are accomplished in math not because of their IQ- but due to their work ethic: how their numbering system works, the precision required growing rice, and of course, willingness to attend schools an extra 50 days a year. What is the work norm at your company? Is everyone punching the clock or actually getting things done?

4) The need for opportunity and encouragement.
The bottom line: no one succeeds alone. We all need encouragement and nurturing. This becomes a real challenge when companies are shutting down on communication and training. Are you people being nurtured properly?

5) The importance of expressing yourself.

This discussion first came up in a risk management context in which Korean airline pilots were causing crashes because subordinates were intimidated about contradicting their superiors- even in the face of a disaster. Many times, CEO’s or presidents of companies are the last ones to know the truth until they’re in the middle of a problem. Here’s the point: we must “invite” subordinates to bring us their ideas, to break past the “Culture of Silence”.

6) Meaningful Work
One of my favorite quotes from the Gladwell book is “Hard work is a prison sentence only if it doesn’t have meaning”. Most of us work hard, but do you really love the work you do? Gladwell says there are three factors that are essential to our work if we are to be successful:
---Autonomy gives us a sense of responsibility for the work that we do.
---Complexity allows us to grow and learn.
---Meaning lets us realize the impact of our work.

The lack of your employees having autonomy, complexity, and meaning will continue to deprive your business of excellent workers who find it more meaningful to work for themselves.

What do you do at your business to allow your employees to have autonomy, complexity, and meaning in their day-to-day activities?



Have a great week!

Bobby Bland PWCA, CIC
Vice President
Commercial Risk Service

Let’s Have a GREAT New Year, OK?

It has been six months since we switched over to Commercial Risk Service last July, and six months since we started our blog. We still have a lot to learn about how to best use our BlogSpot, but I am proud of the information we have given you in those six months. We haven’t had as many people sign up for our blog as I would have hoped at this point, but I know we are doing the right thing here. This is a relatively new mode of communicating with the business leaders, but without a doubt what we are offering here is good information and the right way to go. We are proud of the followers we currently have and look forward to adding more and more business leaders to our blog as we go.

For most of you, 2010 was a little bit better than 2009, but not where you probably hoped you would be at this point. It appears to me that 2011 will again be an improvement over this past year, but still not as much of an increase as hoped. However, I believe there is a beacon of hope in this dimly lit period we have been through in the last 2-3 years. Through all of the lost sales and layoffs and downsizing, those businesses that prevailed have learned how to operate with less and still be viable. As the economy comes back in the next 2-3 years, let’s not forget what kept us going in the economic downturn- lean and mean companies that are still productive.

Commercial Risk Service is passionate about finding ways to help our clients reduce risk in their organizations. Every day, we are thankful for the opportunity to help companies work smarter and keep their employees safer. And every day, we look for more places we can make a difference in your business.

Have a Happy and Prosperous 2011.

Bobby Bland PWCA, CIC

Vice President

Commercial Risk Service