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Monthly Archives

October 2009

Oct 01
Love0

EDITOR’S COLUMN: AN INSIDE-OUT JOB

By Your Employee Matters

It’s always easy to write or speak about “them.” But what about us? Do we have our act together? Are we stuck knowing that we can or should get certain things done – but it’s still not happening? Before we go worrying about anyone else, let’s answer these questions about ourselves:

  1. Are you making a conscious effort to get better every day? There are plenty of ways to do this. How are you doing it? To see my list of possibilities, send me an e-mail at don@hrthatworks.com.
  2. Do you have a game plan? What does success for you (the perfect future) look like? How do you plan to get there? Do you have a written plan that’s articulate, detailed, and broken out into tasks you need to accomplish this week?
  3. Are you focused? For example, are you working on first things first? It’s easy to skate around what’s really important – until it becomes an urgent matter. Focus on a single major objective and work toward it during the first hour or two of every work day.
  4. Do you bring a Positive Mental Attitude to your tasks? Do you expect to be successful? Have you dealt with any lingering fears that might hinder your progress? For example, “If I succeed they won’t like me,” or “It’s they who are keeping me from my success, or “If I go for it and make a mistake I’m in big trouble.” Remember, you get what you focus on!
  5. Finally, are you taking 100% responsibility for yourself, without casting blame on others or justifying outcomes? Yes things will feel unfair. Are you man or woman enough to deal with them in a way that leaves no regrets? It’s only when we know we’ve been 100% responsible that we can “let go.” In reality, things never work out exactly as planned. Life would be boring if it did! Our job is to stay off the emotional stage. Learn the lesson and move on!

As Buckminster Fuller said, “Integrity begins with the individual.” Remember that helping the company – and yourself – is an inside-out job!

Oct 01
Love0

AFTER THE WEDDING BELLS RING, TAKE STEPS TO MERGE FINANCES

By Life and Health

One of the most important tasks for any newly married couple is getting their financial house in order, and the basic components of this financial merger process are knowledge and communication.

Begin by determining your net worth as a married couple. To do this, make a list of your assets, together with a list of your liabilities. Subtract your liabilities from your assets, and the result is your total net worth.

Examining your net worth helps clarify your overall financial picture. If you have a high net worth, then you will want to continue doing together what the two of you had done separately in the past. If your net worth is low, you can use this information to map out a strategy to secure your financial future.

The next step is to discuss and prioritize your short and long-term financial goals. Together, determine how the two of you will accomplish these goals. This means deciding how much you will need to save, and what types of investments are best suited to achieving your objectives. Finally, you need to ask yourselves if accomplishing one goal will ultimately help you accomplish another.

Creating a monthly financial budget is necessary if the two of you are to stay on track in working toward your goals. List all sources of income and then make a list of all expenses. Calculate and compare your total expenses and your total income. The result should be that you spend less than you make. If the reverse is true, review your expenses and see where you can cut. Keep in mind that a budget is a work-in-progress, so review it periodically and modify it to adapt to your changing financial circumstances.

Another issue you will have to deal with as a couple is whether or not to merge your bank accounts and credit cards. Consolidating your funds into one bank account makes it easier to apply for loans and manage funds. It also cuts down on maintenance fees. However, when two people are writing checks and making automatic withdrawals from the same account, it’s more difficult to keep track of how much money is being spent and how much is available. Having a joint account also means that either spouse is financially vulnerable if the two of you decide to split up, because one spouse can deplete the account without the other one knowing about it.

Merging your credit cards means that you are both responsible for the charges incurred. However, even if you maintain separate credit cards, you still might be liable for your spouse’s debt. In some states both spouses are held accountable for the credit card debt incurred for family expenses. In community property states, a spouse may be held accountable for the other’s credit card debt if the property that underlies the debt is jointly owned.

Merging insurance coverage could be beneficial, especially when it comes to Auto insurance. Many companies offer discounts if you insure more than one vehicle with them. Also, your insurance company might give you an additional discount for covering your home or apartment, as well as cars, with them.

Taking these steps to merge finances successfully can help to keep that aspect of your marriage secure over the long-term.

Oct 01
Love0

DON’T UNDERESTIMATE YOUR CHANCES OF BECOMING DISABLED

By Life and Health

More than 51 million Americans are classified as disabled, which represents 18% of the population.(1) Research indicates that most people vastly underestimate their likelihood of becoming disabled before their working years end. Worse, the American Payroll Association estimates that 71% of Americans live paycheck to paycheck.(2)

Of course statistics are just that: Statistics. But how many of us ever think we’ll become one of these statistics? Now there’s a new online tool that can help individuals calculate their chance of becoming disabled and take the necessary steps to manage that risk.

This first-of-its-kind calculator, developed by the non-profit Council for Disability Awareness (CDA), spotlights one of the largest risks to any wage earner’s financial security: The chance that a serious illness or injury might prevent you from earning an income for an extended period of time. It is available free-of-charge online at www.WhatsMyPDQ.org.

The calculator estimates future earnings potential and offers practical tips on how to prevent a disability or at least financially prepare for such an event. Educational resources feature a prevention component that emphasizes better health care, lifestyle and safety, as well as planning resources aimed at helping people budget for lost income, use benefits and secure their financial plans.

“During this economic crisis, more and more people are realizing that their ability to earn an income is their single most valuable asset,” said Bob Taylor, president of CDA. “They recognize how essential their income is to funding everything that’s important to them. But all too often, they seriously underestimate how likely their income may be threatened by a disability.”

1 U.S. Census Bureau, Public Information Office, November 2008

2 American Payroll Association, “Getting Paid in America” Survey, 2008

Oct 01
Love0

UNDERSTAND YOUR WORTH BEFORE PURCHASING LIFE INSURANCE

By Life and Health

Most of us like to believe that life is priceless — but in some cases, it’s important to figure out just how much your life is worth. Why would you do such a thing? Because calculating your worth will help you determine how much Life insurance you need.

Everyone’s a millionaire

Believe it or not, most people earn more than $1 million throughout their entire lifetime. Think of it this way: If you earn $50,000 a year, you’ll make $1 million within the next 20 years. Of course, most of this money goes toward supporting your family and paying day-to-day expenses like groceries, the mortgage, and utility bills.

If something were to happen to you, your income stream would come to a halt. What would your family do without the money they need to pay the bills and buy necessities? This is why it’s crucial not only to purchase Life insurance, but to make sure you have enough insurance to cover all of your family’s needs.

How much do you need? One way to figure out how much you’re worth to your family is to consider how much income you bring home each month. Then, you can buy a Life insurance policy that will pay your family a monthly income that is comparable to what you currently earn. For example, if you buy a $500,000 Life insurance policy and the death benefit proceeds earned 4% annually, your family would receive a monthly payment of about $5,137 for the next 10 years. If you want your family to receive more money each month or payments for a longer period of time, you’ll need to buy more Life insurance.

Other considerations. Unfortunately, figuring out how much Life insurance you need isn’t as simple as calculating your monthly income. In addition to replacing your income, you’ll need to think about other expenses your family might face if you die. For example, they might have to pay medical bills, hospital expenses, and attorney fees and make funeral arrangements. They will also have to pay off any outstanding debts you might have as well as taxes.

On top of that, you should consider your family’s long-term expenses. Not only will your family be left to pay the mortgage and the bills, but how will your family afford your children’s college tuition or wedding costs? Be sure to factor in any other sources of income your family earns — your spouse’s salary, Social Security survivor’s benefits, and investments — and the cost of inflation. Things become more expensive every year. You want to get a true picture of how much money your family will need in the coming years to determine accurately how much Life insurance to buy.

A unique number. Obviously, each family’s Life insurance needs will vary significantly. It all comes down to your income, your expenses, and your goals for your family. Finding the “magic number” is a challenge because it’s somewhat of a balancing act. You want to own enough Life insurance to protect your family adequately if something happens to you, but you don’t want to buy so much insurance that there’s no money left over to enjoy your life in the present.

The goal is to have enough Life insurance to safeguard your family without breaking your budget. If you want to pinpoint just how much Life insurance you need to protect your family, meet with our financial advisors or insurance agents. Our professionals can help determine how much you need to buy and what you can realistically afford in your budget.

Oct 01
Love0

IMPROVING YOUR CREDIT RATING CAN LOWER INSURANCE RATES

By Personal Perspective

Your credit rating can affect a lot more than you might think. Almost all insurance companies factor in credit ratings to set rates for new and existing Auto insurance customers. Yet, blemished credit doesn’t necessarily translate into higher insurance premium rates. Instead, it is the overall insurance risk score that can cause a rise in your rates.

Insurance risk scores are similar to those used by lenders to determine whether or not to approve a loan or line of credit because both look at your credit information. But credit risk models are formulated to predict the likelihood of loan default. Insurance risk models, by contrast, are built to predict the likely loss ratio of any particular individual. In other words, whether you will result in more or fewer losses than average to the insurer. The higher your insurance risk score, the less likely you are to file a claim.

Following is the information many insurance companies use to formulate a risk score and how each is weighted:

  • Past payment history (approximately 35%). A past payment history is determined by: how you’ve paid your credit bills in the past; if your bills have been paid on time; items in collection status; the number of adverse public records (bankruptcy, wage attachments, liens); and the number and length of delinquencies or items in collection.
  • Credit owed (approximately 30%). Credit owed is how many accounts, what kind of accounts, and how close you are to your credit limits.
  • Length of time credit has been established (approximately 15%). Length of time credit established is how long you have had your credit accounts and how long you have had other specific accounts.
  • New credit (approximately 10%). New credit is the number and proportion of recently opened accounts versus already established accounts; the number of credit inquiries; and the reestablishment of credit history after payment problems.
  • Types of credit established (approximately 10%). Types of credit established are the various types of credit accounts including credit cards, retail store accounts, installment loans and mortgages.

In summary, insurers rely on factors that show long-term stability. So, by demonstrating responsible use of credit and keeping your balances low, you should be able to improve you insurance risk score. A lower insurance risk score could translate into lower insurance premiums if you’ve been impacted by a negative credit history in the past.

Oct 01
Love0

USE CHILD SAFETY BELTS PROPERLY TO KEEP KIDS SAFE

By Personal Perspective

When you pack your family into the car this summer to head to the beach, the park, or the grocery store, the most important thing you can do for your children is to make sure they are properly secured in their seat belts. Safe adult drivers begin as safe child passengers. Teach your kids safe habits before they learn unsafe ones from someone else.

The National Highway Safety Administration has created some important guidelines every parent should follow when securing their children in the car. As a general rule, children 12 and younger should always sit in the back seat where they are away from active air bags. Air bags are made for adults and the force of the deployment can injure a young child seriously.

Infants from birth to 20-22 pounds and at least one year old have special guidelines for safety. Adults should make sure to use a rear-facing infant seat or a rear-facing convertible seat when securing a child in the back seat. If you have a car that seats only two, the air bag should be deactivated before placing the child in the passenger seat. The harness straps should be snug and placed in the lower slots at or below shoulder level. The top of the harness clip should be at armpit level. And the child passenger restraint should be installed at no greater than a 45-degree angle.

The switch to a forward-facing car seat can be made for toddlers 20-40 pounds and older than one year of age. Again, secure harness straps snugly in the appropriate reinforced slots at or above shoulder level and fasten the harness clip at armpit level.

Once your child has exceeded 40 pounds, is between ages four and eight, and is up to 4’ 9” tall, they may use a booster seat. Secure the booster seat much the same way as the child seat. Using a lap and shoulder belt, make sure to place the shoulder strap over the shoulder of your child and across their chest. The shoulder strap should never go across the neck, face, or arm of your child. Place the lap belt low and snug on the hips — never over the stomach. If the shoulder or lap belt is in the wrong place during an accident, it could cause serious abdominal injury.

At eight years of age and 4’ 9” or taller, your child has graduated to an adult restraint system. As with the booster seat, use a lap and shoulder belt to secure your child, taking care not to have the belts cross the stomach, neck, or arms. Children should learn that they cannot place the shoulder belt behind their back or under their arms, as this defeats the purpose of being restrained.

For general information on the proper use of child restraint devices, always consult the instructions that come with your child safety seat, as well as the information provided by your vehicle’s owner’s manual.

Oct 01
Love0

BROADEN YOUR LIABILITY COVERAGE WITH A PERSONAL UMBRELLA POLICY

By Personal Perspective

In recent years, our society has become what some people call “lawsuit happy.” In other words, an increasing number of people are filing lawsuits for everything from emotional injury to property damage — and they’re suing for larger amounts than ever before. If someone were to file a lawsuit against you, you could end up losing hundreds of thousands of dollars or more, even if you won.

Although you might have some Personal Liability coverage through your Homeowners or Auto insurance policy, it’s probably not nearly enough to cover a major lawsuit. Fortunately, you can protect yourself further with what’s known as an Umbrella policy. This type of policy offers a higher level of liability coverage and ensures that you and your family will be protected if someone sues you for damages. Read on to learn more about these valuable policies:

Umbrella policies: A liability coverage “extension”

When it comes to lawsuits, the more assets you own, the more you stand to lose. A Personal Umbrella Liability policy can protect you from these potentially devastating losses. These policies act as an extension to the current liability protection you probably have through your Homeowners or Auto insurance policy.

Umbrella policies are typically sold in million dollar increments, and you can obtain a policy once your Homeowners and Auto insurance policies meet a minimum “attachment point” — typically a liability limit of $250,000 or $500,000.

What does it cover? Most Umbrella policies cover the following:

  • Personal injury, including false arrest, mental anguish, malicious prosecution, libel, slander, defamation of character, wrongful entry or eviction, negligent infliction of emotional distress or invasion of privacy.
  • Bodily injury, such as physical injury or death. In some jurisdictions, this also includes emotional injury.
  • Property damage, including destruction of the property of others, cost of recreation and loss of use. However, it does not cover damages done to your own property.
  • Defense coverage, including groundless, false and fraudulent suits, bail bond costs, loss of earning and other “reasonable” expenses.

Of course, it’s probably easier to understand exactly what an Umbrella policy covers by putting it into real-life terms. Here are a few examples of what this type of policy could cover:

  • A deliveryman is hauling your new washing machine into your home when he trips on your door mat, falls and breaks his neck. Your Umbrella policy would likely cover the hundreds of thousands of dollars worth of damages.
  • You’re driving down the road when an important corporate CEO steps into the crosswalk in front of your car. He sues you for millions of dollars in medical costs, lost earnings, and damages. Your Umbrella policy can cover you for these damages.
  • Your daughter invites a friend over to play on her swing set. Her friend falls off the slide and suffers from serious injuries. When her parents sue you, your Umbrella policy will cover the medical costs.

How much does is it cost? The price of an Umbrella policy depends on how much coverage you want, the number of properties you rent or own and the number of automobiles or watercraft you own. The cost associated with cars and watercraft is much higher than those associated with properties. Let’s say you are single, you own one home and one car, and you want to purchase a $5 million Umbrella policy. You’ll probably pay somewhere between $270 and $550 a year. On the other hand, if you are married with two children, you own two homes, a rental property and three cars, and you want a $10 million Umbrella, you’ll probably pay a good deal more — anywhere from $970 to $1,750 a year.

Talk to one of our insurance agents to discuss whether or not an Umbrella policy is right for you. In the long run, by paying a few hundred dollars per year, you could save millions.

Oct 01
Love0

BE AWARE OF LEGAL BOUNDARIES WHILE MONITORING EMPLOYEE’S WORKPLACE ACTIVITIES

By Business Protection Bulletin

Inherent in the employer-employee relationship is the understanding that the employer should supervise an employee’s work activities. Effective supervision ensures that the necessary work is being performed at the time it’s needed, resulting in an efficient and profitable operation for the employer. Also, a minority of workers, if left unsupervised, might do or say things that can hurt a business’s reputation, reveal trade secrets, or even incur legal liability. Although this has always been true to some extent, the rapid changes in communications technology during the past two decades have heightened concerns about it. An employee can hurt a business by saying something inappropriate on the phone, sending an offensive e-mail, visiting Web sites that are inappropriate for work, or in a variety of other ways. As a result, employers are using new technology tools to monitor their employees’ activities.

Some employers frequently monitor employees’ phone conversations. Federal and state law generally allows this for quality control purposes when an employee is on the phone with a client. Although some states require advance notification of monitoring to the parties to a call, federal law allows monitoring of business calls with no prior notice. A federal court decision does require employers to stop listening when it becomes apparent that a call is personal in nature, but an employer might monitor all calls made from phones designated as “business use only.” It is also legal for employers to obtain lists showing phone numbers dialed from a particular extension and the duration of each call. Although the law does not require notifying employees in advance, employers might wish to do so to head off problems.

Courts have also recognized an employer’s right to monitor use of its e-mail system. A federal court held that a private sector employee did not have a reasonable expectation of privacy in e-mail messages where he described management in profane and derogatory language. Another court ruled against a CIA employee who violated agency Internet use policy by downloading pornographic material. The federal Electronic Communications Privacy Act of 1986 permits employers to monitor employee e-mail in the ordinary course of business, when the employee consents to monitoring, or when messages are stored on a computer located on an in-house network. Employers may even monitor an employee’s keystrokes on a computer to see what and how much text the employee is producing.

Oregon-based law firm DuVal Business Law recommends that employers take the following steps to avoid legal problems arising out of e-mail monitoring:

  • Working with legal counsel, develop a comprehensive e-mail and Internet use policy for employees.
  • The policy should make it clear that employee communication over the employer’s network is not private and that the employer will monitor them for legitimate business reasons.
  • The policy should state the workplace’s rules for Internet use, including types of sites employees may not visit and types of files they may not download. It should also state the penalties for breaking the rules.
  • Finally, the policy should state how long the employer will store electronic files and how it will delete them.

DuVal also recommends either having employees sign a copy of the policy before they may receive access to the system, or posting the rules on the login screen they see at the start of each day.

Even with these precautions, employee lawsuits for invasion of privacy are still possible. Employers should consider buying Employment Practices Liability insurance to cover them for the cost of defending these suits and the cost of any court-ordered judgments. With this coverage and common sense policies in place, employers can take advantage of Internet technology while not placing themselves at undue risk.

Oct 01
Love0

IS YOUR COMPANY PROTECTED FROM ASSOCIATIONAL DISCRIMINATION CLAIMS?

By Business Protection Bulletin

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 apply specifically 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 might 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 might cover association discrimination while another might not. As such, employers should discuss specific terms of coverage with one of our insurance agents.

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.

Oct 01
Love0

USE THESE TECHNIQUES TO TRANSFER LEGAL LIABILITY FOR YOUR PRODUCTS

By Employment Resources

Whether you’re a business bringing a new, exciting product to market or a 20-year-old firm selling the latest version of a successful product line, you face certain risks. Users of the product might suffer injuries or damage to their property. These accidents could stem from inappropriate use of the product, such as using a lawn mower to trim hedges. However, some products can be dangerous under normal use by untrained or inexperienced operators. Furthermore, vendors or contractors who sell or install a product might modify it or otherwise affect its performance. These changes can increase the chances that the product will cause injury or damage, and that can land the manufacturer in a courtroom. However, there are steps the firm can take to transfer the risks of financial loss from these incidents.

First, the manufacturer should require, as part of its contracts with contractors, that those parties name it as an additional insured on their Liability insurance policies. If the contractor is at least 1% liable for the accident, the endorsement gives the manufacturer rights to coverage under the policy for amounts necessary to settle a lawsuit. Perhaps more importantly, it covers the cost of defending the firm against the suit. These costs are often substantially higher than the cost of the settlement. The contracts should require the other party to give the manufacturer certificates of insurance showing that the Liability policies include this coverage.

Assume, however, that either the other party neglected to have the manufacturer added as an additional insured or for some reason the insurance company denied coverage under the endorsement. If the company pays for the settlement on behalf of its insured (the contractor), it has a legal right to try to recover its payment (subrogate) from the manufacturer or its insurance company. To prevent that from happening, the contract between the manufacturer and the other party should require the contractor to waive subrogation rights. The waiver of subrogation will bind the insurance company, preventing it from going after the manufacturer. The ISO Liability insurance policy implies that the insured can waive subrogation rights at any time before a loss occurs. However, if the manufacturer wants no doubt as to whether a waiver applies, it should require the other party to add a specific endorsement to its policy, waiving the insurance company’s subrogation rights.

One commonly used technique for transferring liability is requiring a contract to include an indemnity agreement, also known as a hold harmless agreement. Such an agreement will require the contractor to indemnify the manufacturer for the costs of any suits resulting from that party’s work for the manufacturer. For example, assume Contractor A installs a turbine made by Manufacturer B in a power plant and the turbine malfunctions, injuring several employees. Under this agreement, A would indemnify B for the costs of the ensuing lawsuits. Contractor A’s Liability insurance should provide coverage for this if it does not contain an absolute contractual liability exclusion. An experienced contract attorney can help develop the appropriate language for this agreement.

Because some of these techniques involve modification of insurance coverage, the manufacturer should consult our insurance agents. Some insurance companies might require the manufacturer to have these techniques in place before they will offer coverage, while others might accept the account without them but offer reduced premiums if they are in place.

Contractual arrangements are no substitute for providing a safe, quality product. However, since accidents are possible no matter how many precautions are taken, manufacturers are well advised to use these techniques to decrease the chance of financial loss.

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