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Monthly Archives

April 2013

10 COSTLY RETURN-TO-WORK MISTAKES

By Workplace Safety | No Comments

By decreasing work time lost from to job-related injuries and illnesses, Return-to-Work (RTW) programs can reduce your insurance costs (Workers Compensation, Disability, and Medical insurance), strengthen workplace morale, boost productivity – and help protect you against ADAAA litigation.

Here are ten common mistakes by businesses when using RTW:

  1. Failure to manage the higher number of employees covered by the ADAAA. An expanded definition of disability has increased the number of employees under the ADA to the point that some attorneys advise against fighting disability claims.
  2. Insisting on employee release to “full duty” before returning to work. This raises Workers Comp costs and the possibility of the employee not returning to work when medically possible.
  3. Ignoring co-morbidities. Health issues that complicate or delay an employee’s recovery (such as diabetes, obesity, and hypertension) can increase Comp claims.
  4. Failure to commit the necessary budget or resources. The costs of absences and non-compliance with government rules is usually far higher than that of implementing an RTW.
  5. Reluctance to set transitional assignments because employees “might get reinjured.” It’s even riskier to have them stay at home and develop a “disability attitude” that extends the absence and boosts costs.
  6. Failure to distinguish “light duty” from “transitional work.” The ADAAA permits employers to reserve less physically demanding or “light-duty” jobs for those with work-related disabilities – and these jobs should be distinct from transitional tasks.
  7. Relying on physicians to guide the RTW process. Although physicians are medical experts, they’re not familiar with workplace policies, job demands, and the availability of transitional work.
  8. Failure to understand overlapping and conflicting laws. The clashing requirements of insurance companies and state and local governments can be a nightmare.
  9. Inability to focus on the goal. An Integrated Benefits Institute study ranked a focus on the employee’s job as the major success factor in successful RTW programs.
  10. Believing that Workers Comp settlements resolve other liabilities. One size does not fit all.

PROACTIVE EMPLOYEE HEALTH PROGAMS MAKE SENSE – AND DOLLARS

By Workplace Safety | No Comments

Basic health interventions can help your business lower short-term disability rates, while reducing your employees’ time away from work. That’s the bottom line of a nationwide study of 118,000 employees by CIGNA, a major health services company.

CIGNA found that these measures, combined with predictive analytics, cut disability rates by 15% among employees at high risk of suffering disability within in the next 12 months. (The study defined “high risk” as a 10% or greater probability of becoming disabled during this period).

“By identifying workers at high risk of future short-term disability and providing individualized intervention that includes coaching, incentives, and other outreach, our study shows that the onset of disability absence can be reduced measurably, benefiting employers and employees alike,” says Dr. Robert N. Anfield, chief medical officer for CIGNA’s Disability business. Future studies will deal with the impact of intervention on the length of short-term disability, return-to-work rates, and total medical costs.

The company’s Absence Prediction and Prevention program establishes an intervention, led by a nurse/health advocate, that provides:

  • Early identification of workers at high risk for future short-term disability.
  • Proactive outreach to these employees.
  • Clinical Assessment.
  • A range of disability absence prevention strategies.

By proactively identifying employees who might be having health problems before their condition worsens and they need to leave work, you can help workers stay healthy and potentially prevent or lessen the impact of injuries or illness – which translates into lower absenteeism, higher productivity, and a healthier bottom line.

It makes sense to develop an absence prevention program that emphasizes preventive health safety training. As always, we stand ready to offer our advice.

KEEPING YOUR ‘LONE WORKERS’ SAFE

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Some companies employ workers who work alone or in remote areas where injuries and illnesses can occur, resulting in delays in emergency response or medical assistance. They include people who work outside normal business hours, such as janitors, security guards, special production, plant maintenance or repair staff, delivery truck drivers, and others. Protecting the safety of these lone or remote workers isn’t always easy – but it’s your responsibility.

In some cases, you must monitor the exposure of these workers to identify potential hazards, assess the risks of injury or illness, and take steps to eliminate or control them. Bear in mind that some high-risk activities have safety regulations which require at least one other person to do the job, such as confined space work (defined by OSHA regulations) or electrical work at or near exposed live conductors.

If you have any employees out in the field or working alone, consider what safety measures to take to protect their well-being and security. A well-thought-out safety program for these employees is an essential first step. Hazard control measures might include:

  • Safety Awareness information.
  • Training.
  • Supervision.
  • Protective Equipment.
  • Communication and Monitoring devices.

Take steps to make sure that these safety control measures remain in effect – and review your plan at regular intervals by doing a risk assessment in areas where employees work alone.

As your professional insurance agents, it’s our responsibility to help you keep all of your workers safe at all times. Give us a call at any time to discuss how we can help.

WORKING WITH THIRD-PARY ADMINISTRATORS HELPS CONTROL CLAIMS

By Workplace Safety | No Comments

Third-Party Administrator (TPA) adjusters form the front line of defense against unnecessary claims expenses, including such traditional cost drivers as fraud or opioid pain medication addiction. They’re the ones who determine how soon employees will mend and return to the job, the length of claims, and whether closing a claim will require additional resources, such as attorney involvement. It makes sense that the more closely you monitor the adjusters of your company’s TPA, the lower your Workers Comp claims costs – and premiums.

However, adjusters today are running on overload more than ever. In addition to managing larger caseloads, they face growing real-time information demands, increasing communication speed, and expanding regulations – which distract them from such cost-control practices as staying in contact with injured workers. Says one claims adjustment expert, “The fastest way of getting an injured employee to hire an attorney is making them feel like you don’t really care about their injury. So you end up with a lot more claims than necessary going to attorneys, which leads to higher claim costs.”

It makes sense to work closely with your TPA adjuster by following these guidelines:

  1. Interview adjusters before they’re assigned to your company.
  2. Review the adjuster’s claims notes on a regular basis.
  3. Audit the TPA’s services periodically to make sure that the adjuster is meeting your expectations.
  4. Develop close relationships with claims examiners and their supervisors.

We’d be happy to work with you and your TPA adjuster on keeping tabs on your Workers Comp claims costs. Please feel free to get in touch with us.

PROTECTING YOUR BUSINESS: THE CGL SOLUTION

By Business Protection Bulletin | No Comments

In today’s “litigation society,” you face lawsuits that could cripple your bottom line – or even put you out of business – based on anything from a fire on your premises to an allegation of libel by a competitor.

Commercial General Liability (CGL) insurance provides financial protection against damage or injury caused by something that your business did, or perhaps didn’t do.

Your CGL policy covers a variety of exposures:

  • Premises and Operations Legal Liability pays for injuries or property damage on your premises, as well as those that occur outside your place of business.
  • Products and Completed Operations Legal Liability covers injury or property damage resulting from someone using your products, or real or alleged faults as a result of work your business has completed.
  • Fire Legal Liability pays for injuries and damage from fires for which your business is responsible or that started due to your negligence.
  • Personal and Advertising Injury protects your business against litigation alleging libel, slander, or invasion of privacy.
  • Host Liquor Legal Liability will pay for lawsuits from hosting a party or special event at which you serve alcohol and intoxicated people cause injuries or property damage.
  • Medical Payments covers bills when your customers, suppliers, or visitors suffer bodily injury on your premises, or resulting from your operations offsite.

To learn more about this essential coverage, just give us our agency a call.

COMBATING INTERNAL FRAUD: BE PREPARED

By Business Protection Bulletin | No Comments

Not every threat to your business comes from outside. A nationwide survey reported 778 internal-fraud cases in 2012, involving such scams as phony bills (three in four cases), corruption, and expense reimbursements.

In more than half of these cases, the victimized company lost only $200,000 or less. However, fraud causes its real damage through private civil claims, potential government investigations, criminal prosecution, and negative publicity.

To help deal with this threat, experts recommend that businesses create a comprehensive plan to uncover potential fraud and organize a response. Internal fraud is usually detected by an employee tip-off, management review, internal audit, or even a “gut” feeling by an experienced executive. The first step after discovery is to conduct a thorough internal investigation to determine the facts, gather and preserve evidence, assess legal repercussions, and take corrective action – before an outside authority does. Also, being the first to report the incident to authorities can take the sting out of government investigations.

Corrective actions should involve making amends with the “victims,” revising or implementing corporate-compliance programs, and strengthening internal controls. These actions can include offering employees financial incentives to open up about their qualms.

Fidelity and Crime insurance can help protect businesses from the loss of money, securities, and/or inventory resulting from employee dishonesty. Crime coverage can cover the theft of property, losses due to forgery, and electronic wire transfer fraud.

Cyber insurance is essential, especially after a recent court decision which expanded coverage for cyber losses due under a Fidelity bond. Warns one insurance expert, “Not having cyber coverage is like playing hockey without a goalie.”

For more information on fighting internal fraud, feel free to get in touch with us at any time. We’re here to help.

BUSINESS PROPERTY INSURANCE: REPLACEMENT COST OR ACTUAL CASH VALUE?

By Business Protection Bulletin | No Comments

Business Property insurance protects your building and property against loss or damage from theft, accident, and a variety of other causes. The policy will pay for replacing or repairing covered property or providing compensation for irreplaceable items.

If you don’t own your building you’ll still need to cover its contents: fixtures, furniture, office equipment, inventory and the supplies stored at your location or off-site.

The premium will depend on whether you choose to insure the replacement cost or actual cash value (ACV) of the property. Most Business Property coverage is written on a replacement-cost basis, which will reimburse you for replacing lost or stolen goods with new items at current market prices. This feature can help your business recover from the loss or theft quickly. (If you’re leasing equipment, the leaseholder might require you to cover it at replacement value.) You’ll need to revise your coverage when you acquire or dispose of property. Be sure to update replacement values over time; a computer worth $1,000 two years ago might cost half that today – on the other hand, the price of a desk might well increase.

Actual cash value coverage, which generally costs less, provides reimbursement for the depreciated value of covered property. If your business owns its own equipment, which you could replace easily with comparable goods at depreciated market value, the lower premium of an ACV policy might make it a more cost-effective choice.

As always, our agency’s Business Insurance specialists stand ready to offer their advice on choosing the coverage that’s best for you. Just give us a call.

HAVE YOU REVIEWED YOUR BUSINESS INTERRUPTION POLICY?

By Business Protection Bulletin | No Comments

Business Interruption (BI) insurance makes sense. Consider Allison Dorst, a New Jersey resident who operates three e-commerce web sites selling sportswear. Last fall, Superstorm Sandy brought a prolonged power failure that shut down Dorst’s customer-service lines, causing sales to evaporate. She’ll also see lower sales because of a month-long delay in the delivery of next season’s styles. Fortunately, her Business Interruption coverage will reimburse the profits lost because of this lost revenue.

Although most middle-market business owners and managers understand the need for BI, they don’t always have the information they need to choose the right coverage. Some companies don’t have enough insurance to remain in business after they suffer a major loss, while other businesses might be buying more coverage than they need. When it comes time to renew your BI insurance, be sure to take a close look at the insured or reported values for the policy, as well as on the various coverage extensions that apply to your business, based on its operations. It also makes sense to consider additional coverages such as:

  • Contingent Business Interruption
  • Claim preparation fees
  • Extended period of indemnity
  • Expediting expense
  • Service interruption/power outage, including overhead transmission and off-premises lines
  • Extra expenses
  • Ordinary payroll coverage
  • Selling price of finished goods inventory
  • Ingress/egress
  • Loss of attraction
  • Civil authority
  • Sue and labor

We’d be happy to offer our advice, free of charge, in selecting the amount and types of coverage that can minimize your financial risk and keep you in business after disaster strikes. Feel free to get in touch with us at any time.

RISK MANAGEMENT: KEEP SAFETY IN THE FOREFRONT

By Risk Management Bulletin | No Comments

Once employees have gone through safety training, make sure that they use what they’ve learned. When every worker knows and chooses the safe way on a daily basis, you’ll have a workplace with less chance of accidents and injuries.

This four-step approach to job safety will pay dividends:

  1. Team up to solve problems and improve safety. Create employee teams in every department to gather information on potential hazards, analyze problems, develop and test solutions, and implement and monitor results. Being part of a team makes workers feel that they share responsibility, which keeps your safety message top of mind.
  2. Talk up safety every day. Update employees on information that affects their safety. Provide ongoing feedback, praising safe performance, correcting unsafe behavior, and pointing out areas for improvement. Make sure that communication flows both ways. Urge workers to offer suggestions, identify problems, and pose questions – for example, through a safety suggestion system.
  3. Encourage employees to become hazard detectives – and reporters. Make every worker responsible for finding hazards. Create an effective system for reporting problems, and respond promptly to correct hazards that employees identify. This is harder than it sounds because it means that management has to listen when workers discuss safety concerns.
  4. Create a “want-to” safety culture. Encourage your workers to do the safe thing, not because they have to, but because they want to avoid injuries. Remind them of how many safety-related decisions they make every day – and how one bad decision is all it takes to get hurt.

For professional advice on creating or updating your workplace safety program, just give us a call.

USE SOCIAL MEDIA AS A RISK MANAGEMENT TOOL

By Risk Management Bulletin | No Comments

Given the dramatic impact of social media on the speed and delivery of news and information, it makes sense to make this fast-growing technology part of your risk management program.

More and more reputational crises – such as the recent stranding of the Carnival Triumph cruise ship – are born on social networking platforms and can grow exponentially if mishandled. Consider how Apple Inc. responded to consumer displeasure with the iPhone 4 shortly after its 2010 introduction. Negative comments about the product spread quickly over social media channels, but were largely ignored by Apple executives until mainstream news outlets began reporting on its flaws.

Failing to actively engage social media users in conversations about crisis or business practice of your company means losing an invaluable opportunity to protect your reputation. Otherwise, you risk having other people tell your story.

Social media participation gives you a way to enhance this reputation through regular interaction with customers, business partners and the public. Using this tool to develop relationships and help people, rather than just sell products and services, can create some valuable allies.

Encouraging your employees to participate in social media offers a great way to use them as advocates for your company. A 2012 poll of more than 1,000 registered voters by Hill+Knowlton Strategies found that a corporation’s employees are the second-most trusted source of information about its business practices, second only to friends and family members.