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?