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Monthly Archives

June 2015

Jun 01
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Reinforcing Safety Awareness: Paycheck safety tips to departmental competition

By Workplace Safety
When can you easily communicate safety information to all employees? Why not use the pay stub or in the case of direct deposit payroll, the summary to write a safety tip?
Reinforce the notion that workplace safety is the company’s number one employee benefit. Simple messages regarding wearing proper protective gear or situational awareness remind workers to think safe.
Some suggestions for the safety message:
1. X days since our last on the job injury. Keep up the good work.
2. Case history of a claim that does occur: safety devices used or not, what steps to prevent in future, result of injuries (lost time, medical expenses), and any new procedures.
3. Announce contests or bonus structure for safe operations.
4. Reinforce that the company considers safety an important employee benefit.
5. Safety tip of the week, pay period, or month. For example: use proper safety glasses and procedures during October eye-safety month.
Use the message to promote safe habits and distribute knowledge.
This idea can be used to promote proper maintenance as well. “Let the mechanic know if your backhoe is leaking hydraulic fluid as soon as you notice one drop” might save major repairs later.
Do you have divisions or operational units in your company? Promote safety as competition between or among the groups. Maybe the members of the group with the fewest accidents get new 50″ flat-screens.
Whenever a contest is used to promote safety, give a tangible prize, not money or a meal. That prize will reinforce the safety ethic every time it is seen. Even if the prize is specially logo-ed safety equipment or hard hats, the safety ethic is reinforced.
Positive reinforcement works best. Asking employees to lead more healthy lives is less effective than paying for their healthcare or holding a heart-healthy check up at work. Health and safety are core ethics of your company.
Punishing poor safety performance does nothing to retrain individuals. Certain behaviors should be non-negotiable aspects of the job. Improper equipment or refusal to use protective equipment or procedures should result in dismissal. That employee is a danger to everyone.
Jun 01
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Electricity: some steps to avoid fires and electrocutions

By Workplace Safety
Wires lay in wait inside walls for decades and unless the fuse blows or the circuits break, nobody considers the vintage of wires.
And, like many construction components, electrical service has a vintage.
Builders in the 1970s used aluminum wire, which ultimately proved to be sub par and unsafe, implicated in many fires.
Unfortunately, not all aluminum wiring has been remediated.
If your property was built in or had a major renovation in the 1970s, check for aluminum wires. Pull a cover plate off a wall socket or light switch and check.
Overloaded circuits cause fires. Open your breaker box and feel the breakers. If they are warm to the touch, the circuit is under stress and should be evaluated by a professional electrician.
Change any fuse panel to circuit breakers.
Wiring and cords are factors in half the electrical fires. Check cords for wear and tear of insulation. Do not run cords under rugs; they will abrade and become an ignition source.
Do not use extension cords as a permanent solution to provide electricity to an area or machine. These overload circuits by providing increased demand (electricity must travel extra distance and heat the cord) and extra outlets for plug-ins. Install new wall outlets if needed.
When using extension cords for temporary applications, use grounded plugs. If the cord has any nicks, cuts or is missing the ground prong, discard the cord and replace it with new.
Cut power to outside outlets at the circuit breaker box when maintaining lighting. This specific warning about lighting: just because the light isn’t shining does not mean electricity is not flowing.
A few years ago, an electrician, well-trained with much experience, was electrocuted when the outdoor light timer sent electricity through a line he was splicing while standing on damp soil.
Know the current is off and inaccessible to the circuit on which you’re working. Avoid electrocution by turning off the electricity. Tag out that circuit. Use cutoffs as close to the worksite as possible. And, never work on electrical circuits on wet floors or grass.

 

Jun 01
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Control Visitor Access

By Workplace Safety
Whether you operate a manufacturing company, construction firm, automotive garage, or even a real estate office, you need to control visitor access.
Safety concerns for the visitor have traditionally been first in the minds of business people. You did not want visitors in dangerous shop areas or startling unsuspecting line workers. Now, safety and security for your staff must be considered the first priority.
In the modern day world of single-issue vigilantes and crazed spouses, access must be restricted. Every employee needs to be able to identify other employees or permitted visitors and report all others.
Besides relatively benign unwanted guests like the curious or the misdirected, some individuals are up to non-violent mischief inside your workplace. A glimpse at your operations or process, a hint as to your suppliers, or some other industrial espionage may be the target of the trespasser.
Simple confrontation generally resolves these issues. In larger companies where not everyone knows everybody, uncontrolled visitors have become a workplace threat.
Even a violent threat.
Security is important, vigilance a must.
Visitors should be welcomed by a receiver who either knows the purpose of the visit by prearrangement or discovers the reason quickly and handles the request decisively.
Prearranged meetings require someone to escort the visitor to the correct location and hand off the visitor to the appropriate personnel.
Unsolicited and unexpected visitors must be contained in a secure area before allowing admittance into the main operations area.
Procedures for drop in callers may sound paranoid, but the recent workplace episodic violence suggests caution.
Never allow unknown individuals access to the main working area without proper screening in place. Who are they? Why are they here? Do they know anyone in the office? Are they dressed appropriately for their stated purpose? Do they have identification and contact information?
Everyone should be escorted through the space.
No spouses or significant others should be allowed in without expressed permission from the employee. These relationships can be volatile, and it sounds better as a company policy rather than an individual one.
Employees should report any unknown, unescorted, un-credential-ed individuals to security immediately.

 

Jun 01
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The Latest in Cyber Liability

By Business Protection Bulletin
What happens when an ethical tautology collides with a business imperative? Cyber liability.
Business must keep confidential information regarding clients, customers, and casual prospects secure from unauthorized use and publication.
Business must also engage in web-related activities, even something as benign as email, in the twenty-first century. A website or an email opens a portal to your business. Unguarded, this portal becomes a virtual interstate.
Communications companies, large retailers, and financial companies have paid tens of millions of dollar fines for breaches in security.
Medium and small companies share this risk if they have an internet footprint.
Cyber and Privacy Insurance coverage is complex. The most comprehensive stand-alone forms cost a minimum of ten thousand dollars in premium, which prices the coverage out of the small to medium size business budget.
Risk management offers some solutions to the problem. Engage an expert webmaster and risk manager to implement:
– Hold harmless agreements, shifting the responsibility to users
– Insurance requirements of third party vendors involved with your site
– Screen your interface users carefully
Currently, risk avoidance, although immediately pricey, is your best long-term solution to reducing your risks. Let the hackers move on to a less guarded site, or a more lucrative target.
The insurance aspect of protection requires expertise because forms and coverage differ dramatically among the carriers. Your professional risk manager can determine:
– Which policy contains the fewest or least costly exclusions to your normal operations
– Any exceptions to those exclusions which may provide coverage
– The adequacy of Cyber coverage contained in package policies
– How much coverage (policy limits) is enough
– Does your company have an exposure to bodily injury or property damage due to cyber liability? Machine software tampering causing malfunction, for example.
Cyber liability insurance is still in its infancy. Privacy, particularly for personal financial and health data, must be maintained. The web opens a door to that private data. Business needs vigilance and creative thinking to shut down this paradox.

 

Jun 01
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Business Interruption: what’s the correct form to use

By Business Protection Bulletin
Time element insurances provide the income which would be derived from assets which are no longer available for production due to an insured loss.
Two main forms of business interruption insurance are:
1. Loss of Income
2. Extra Expense
The difference between the two is the financial approach. Is the impact of loss derived from lower income or greater expense to achieve current income?
If the loss can be mitigated by spending marginally more overhead money, extra expense insurance will be cost effective. If any loss of vital assets means months of recovery with no commercial activity possible, loss of income is the correct approach.
The deep and long-lasting nature of the current recession offers opportunities to revisit business interruption insurance strategies.
Two scenarios are now commonplace:
1. The economic situation has created decreased demand, and thereby sales, so the business is over-insured and burdened with too much premium.
2. The economic condition has eliminated competition, and thereby increased sales, which leaves your firm under-insured and ill prepared for a loss.
Given the last decade, predicting your company’s financial future is a difficult task. Some thought provoking questions to ask your team:
1. Are we introducing new products into or withdrawing old ones from the market which will significantly impact expenses or incomes?
2. Have competitors entered or left your market in significant numbers?
3. Is your traditional product or service list doing well in the economy?
4. Is your supply chain adversely affected by the economy? This question is particularly relevant to contingent business interruption if a sole provider were to burn down.
5. Is your company making money now?
6. Would you significantly change operations if a major insured loss were to occur?
Review your time sensitive coverage today. The market demands attention to this detail. Using the above guideline will help you choose wisely between extra expense and loss of income.

 

Jun 01
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Today’s Flood Insurance

By Business Protection Bulletin
Flood insurance confuses even the most seasoned insurance professionals. Flood is a most damaging, yet predictable peril.
Floods occur faster and more powerfully now since so much area is paved with impervious surface and graded to drain quickly and efficiently. Local streams swell immediately.
The hundred-year floodplain is generally a decade or two behind this development curve. Even with storm retention facilities built into new larger projects, the release is measured as a ten-year storm. So, every intense storm becomes more than naturally intense. The flood peril will only get worse.
The Standard Flood Insurance Policy General Property Form (commercial properties and residential with greater than four family units) offers two coverage limits:
1. Building property – $500,000
2. Personal property – $500,000
Valuation of damage is based on actual cash value; that is, replacement cost less depreciation.
According to the Federal Emergency Management Agency (FEMA), flood means an overflow of inland waters, tidal waters, unusual or rapid accumulation of runoff, mudflow, or collapse of shorelines or banks due to erosive forces of floods or waves.
According to FEMA, mudflow means a liquid river of flowing mud on the surfaces of normally dry land. It does not include landslides, slope failure or saturated soil movements.
Flood insurance only covers this narrowly defined peril.
Deductibles apply to buildings and personal property separately, and contents coverage is never included in building coverage. The two may be on the same policy, but they stand alone as losses, valuation including deductible, and limits.
Building coverage includes permanent machinery, like HVAC systems, pumps, built-in cabinets, water heaters, awnings and canopies, and permanently attached antennas. Business interruption and loss of income are not covered.
Personal property does not include currency or precious metals, coin or stamp collections or stock certificates, vehicles, or ensuing mold or mildew without insured mitigation of potential loss.
Increased Cost of Compliance (ICC) coverage helps defray the cost of relocating or restructuring the dwelling to bring the dwelling to current community building standards in a flood zone. It is an add-on coverage.
ICC is limited to $30,000 and the building claim amount is limited to $500,000 with both coverage limits included.
Ask your insurance professional about flood insurance. It may reduce your losses substantially.

 

Jun 01
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What Your Balance Sheet Is Trying to Tell You

By Business Protection Bulletin
Listen to your balance sheet; it knows risk management.
Cash breathes life into a company like blood delivers oxygen to vital organs. Do not run low on cash. The top line in any balance sheet determines the relative health of the company, cash.
Do you have a minimum of four months operating cash on hand? If not, you’re becoming anemic. One month’s cash or less, you’re slipping into a coma.
An extremely healthy operation has cash reserves for depreciation, a plan and funding to replace vital parts.
What are those parts? Real property, like buildings, may be readily replaceable in the current market. Office operations present no serious replacement problems, setting a manufacturing line does.
If you require a specialty building, for example the roof supports an unusual amount of machinery or weight, finding a temporary replacement might prove difficult.
What is the game plan in the event of a catastrophic loss? Do you have target replacement facilities in mind? Are you expanding to a second location to spread risk, or expanding the current facility for convenience or economies of scale?
Or, are you better off funding the potential temporary loss through business interruption insurance? Take a hard look at the function of your real property and find the best solution before a loss becomes a disaster.
The balance sheet will list equipment and machinery. What is the lead time to replace the most critical assets? Do alternatives exist such as outsourcing manufacturing?
Treat your equipment and machinery like a cash flow. Can you maintain that cash flow by changing from asset based to leases? How much time will elapse to regain full operational status? How will you finance this gap?
Look on the liability side of the balance sheet. If the real property is leveraged, is a balloon payment part of the financial structure or is it a fully amortized loan? Can interest rates change over the long run?
The current rates are historically low. If you have a large loan to negotiate several years from now, you might consider an investment in interest futures to smooth the transition and avoid potential loss.
Read and study the balance sheet. You’ll ground yourself in the fundamentals and vital needs of your company.

 

Jun 01
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Contract Insurance Clauses: Think collaboratively and liability limit size matters

By Construction Insurance Bulletin
Simplicity, not a word always associated with contract law. Contracts in the building industry, however, need conceptual simplicity in order to function as a collaborative agreement rather than a cruel and counterproductive game of “gotcha!”.
The insurance clause, indemnity clause, hold harmless, or any other risk transferring device best serves the project when certain rules apply. Too often, individual firms place onerous demands on subcontractors which do not reflect the relative control over risks associated with the jobsite.
RULE #1: The contractor most actively in control of the peril needs to be in control of the peril. Responsibility equals authority works on jobsites in truly collaborative projects.
For example, crane operators need to control their working area setting rules for entry and exit from the workspace, what and when lifts occur, and any mobilization issues.
Hold harmless agreements can lead to catastrophic losses when a non-professional is assigned site control responsibilities.
RULE#2: Limits of Liability must be reasonable and affordable. Contract demands of ten million dollar excess policies for a contractor installing a fifty square foot tile floor is ludicrous and more costly than their expected fee.
Two results can occur: the contract for that service will be very expensive or a different contractor will expose their liability insurance by hiring that subcontractor. Artisans are becoming harder to attract because unforgiving or intransigent generals hold the line on liability limits.
Think collaboration when designing your contract forms. Is the clause meant to reflect the degree of service versus risk control or is it a means to yell “GOTCHA!” at some point in the future.
The best way to move the job to completion involves risk control at the controllable point. The contractor closest to the hazards, the contractor in position to create the largest liability, maybe the contractor who creates a jobsite choke point should have the ability to smoothly finish their work without hourly territorial argument. Think collaboratively and balance responsibility and authority.

 

Jun 01
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Insurance Insiders’ View of Workers’ Compensation Where the market is going in the next three years

By Construction Insurance Bulletin
The economy and the economics of labor is moving towards more independent contractors and fewer employees. Health benefits, and who pays for them, is leading the way.
The Affordable Care Act (ACA) demands all citizens purchase health insurance. What is uncertain is the interface between the ACA benefits and expenses related to on the job injuries.
Combine the at-demand employment economy, for example drivers, with confusion over the line between personal healthcare and corporate responsibility and the result is chaos in the marketplace.
Internet companies dispatch individual drivers to provide rides for customers in a “ride-sharing” or “carpooling” arrangement and “costs are shared”. What happens in an accident with injuries?
The individual drivers do not have workers’ compensation; does the service company provide that protection? The company’s position is ride sharing, not a business, not a for hire context.
If a passenger is injured, certainly the driver will go with the ride sharing context or their personal insurance will deny the claim based on the livery service exclusion.
These conditions lead us to the ACA coverage everyone is commanded to carry. This coverage will become truly universal in the future as more independent contractors are used. Medical claims will become a more “no fault” coverage.
In addition to drivers, part-time on-demand help is used now through internet applications to increase labor during the peak hours of need for business.
This peak-time labor force is paid by the hour as contract labor. This labor force does not carry workers’ compensation or general liability. But hourly wages is one of the tests to determine the difference between independent contract status and employment.
Decide how your company will treat peak-hour labor. Paying piece work may be your solution.
Universal medical insurance presages a no fault attitude toward medical claims. Social security may become the default disability provider with only short-term disability and occupational rehabilitation left for the employer to pay.
As traditional payrolls decrease, premium rates will increase unless relief is provided for the medical aspect of workers’ compensation. The future points to universal health coverage to include workers’ compensation.

 

Jun 01
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Employer Provided Travel and Workers’ Compensation

By Construction Insurance Bulletin

Whether a van full of employees heads to a jobsite or an executive boards a corporate jet, employee travel has always been a concern for workers’ compensation carriers. Travel, especially on the roads, is a dangerous situation. From an insurance company perspective, increasing the probable maximum loss by exposing several employees to the same vehicle accident is a tragedy awaiting a trigger.

So when does travel become part of employment, and therefore covered by workers’ compensation?

The commute to or from work is not part of your employment. The morning drive to the airport for a business flight is. The morning commute is if you pick up supplies, materials or make a sales call along the way.

Carpooling to work normally is not considered employment related unless sanctioned by the employer. For example, the company may pay for parking if three or more employees carpool. Or, the company provides a pool van to get employees to remote locations together. Leaving to go to lunch midday is not part of your employment unless it’s a business lunch with clients or coworkers.

Leaving on a company related errand and picking up lunch along the way is employment based travel.

Traveling in a company car or for company business during the day is covered as employment oriented travel.

For purposes of supporting the business is a good rule for whether or not travel is covered under workers’ compensation.

How about the employee who wins a trip for a sales contest or safety performance? That travel is covered, even outside the United States and Canada, under workers’ compensation. How about if the spouse travels too? The employee is still covered, but the spouse falls into a tricky area of employers’ liability.

Employers’ liability covers injuries and illness to the employee’s family due to their employment. For example, a medical worker brings Hepatitis C home to their spouse. Or, learning of the employees injury at work, the spouse suffers a heart attack.

In the case of a mutual travel accident, the grey area far outweighs the rules for employers’ liability. This scenario should be discussed with your insurance provider, perhaps their claims personnel.

 

 

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