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Monthly Archives

July 2013


By Personal Perspective | No Comments

Metal car keys are going the way of the land line, as most drivers have graduated to a key fob or remote with a transponder that needs programming before use. If you own a high-tech luxury vehicle you might have a “smart key” – a remote control to plug into your dashboard or leave in your pocket.

Although these devices add convenience, they’re pricey. You’ll pay $200 to $400 to replace a smart key on a luxury car, plus $100 an hour for labor. If you lose all your keys, you might need to replace the locks, which could cost $1,000.

Auto insurance will cover the cost of replacing smart keys (or metal keys) only if the loss comes from a peril covered under the policy. For example, if your keys are damaged when you collide with another car, Collision coverage would pay to replace them. Comprehensive coverage –which reimburses you for loss or damage to your vehicle from theft, vandalism, fire, hail, or flood – would include replacement of the keys, as part of the vehicle.

If your car keys are stolen, Homeowners insurance should pay to replace them because theft is a “named peril” under the policy.

Bear in mind that your Auto or Homeowners deductible will apply against the cost of replacement.

Technology is well on the way to eliminating car keys. According to the AAA, smart phone apps that allow you to unlock and start your car will be standard on many vehicles as soon as 2015.

In the meantime, you can avoid paying the high cost of replacing smart keys by keeping spares in a safe place.

To learn more, please feel free to get in touch with us.


By Construction Insurance Bulletin | No Comments

Contractors often install pipes, water-based heat transfer systems, sprinkler systems, and drain lines components made of chlorinated polyvinyl chloride (CPVC) because they’re less expensive, and easier, to work with than those made of metal. These pipes and fittings can cause serious – and costly – damage when they leak or burst.

CPVC components can fail for a variety of reasons. Because this material is a thermoplastic made by combining raw materials, one or more ingredients might be faulty. Errors in manufacturing can lead to defects in the extrusion or injection-mold processes. Other potential risks include inadequate warnings, and improper shipping and handling.

To minimize your exposure to losses when working with products made of CPVC, construction risk management professionals recommend that you:

  • Use proper handling and storage procedures – for example, avoid exposing CPVC components to sunlight.
  • Make sure that the booster pump pressure is not too high when designing the piping system.
  • Do not use CPVC components in pressurized-air applications.
  • Review assembly techniques carefully.
  • Check the type of adhesive used, and the amount (the Goldilocks principle).
  • Set the right amount of dry time.
  • Inspect the alignment of pipes and fittings.

Last, but not least, do not mix CPVC pipes and fittings with those made from its distant cousin, polyvinyl chloride (PVC), which has different chemical properties, physical characteristics, and capabilities.

Of course, most of these precautions apply just as well to installing pipes or fittings made of any material.

As always, our agency’s Construction insurance professionals would be happy to offer their advice on keeping your workplace as safe as possible.


By Construction Insurance Bulletin | No Comments

Most public construction projects, and many private projects, require the general contractor to carry a contract bond: a financial guarantee to the project owner from a “surety underwriter” (surety) that the contractor will meet the contract provisions.

Unfortunately, contractors sometimes run into setbacks that can keep them from fulfilling their contract obligations and trigger a bond default – an event that could put them out of business.

Smaller and midsize contractors (those with work backlogs of $5 million to $100 million) are often more vulnerable than their larger counterparts to this risk. The reason: Smaller building projects are usually easier to cancel because the owners are more likely to stick with larger, more complex projects, due to their greater importance and longer planning lead times.

If you’re experiencing, or can reasonably expect, problems in meeting your contract terms – such as excessive overhead, a liquidity squeeze, cost overruns and/or scheduling delays – it makes sense to develop contingency plans that address such concerns.

Just as important, make sure to let your surety know about your situation immediately. After all, the surety has a vested financial interest in avoiding a costly default by working with you and the project owner to work through these difficulties.

Never withhold bad news from your surety. When, not if, the surety learns about your deteriorating financial condition (even if you’re able to meet the terms of the contract), you automatically become a riskier candidate for future bonds. The surety – or any other bond underwriter – will probably limit you to bids on smaller projects with less financial risk, or keep you from bidding on any projects until you can demonstrate financial stability.


By Construction Insurance Bulletin | No Comments

A difficult economy is squeezing small contractors to do more jobs within narrower margins, exposing them to costly errors Customers are more demanding and quick to claim negligence when they aren’t satisfied with the results.

When a small contractor makes a mistake that results in a loss, he must often spend the time and his own money to fix the work – usually costing thousands of dollars. Expensive mishaps happen every day on jobs such as these:

  • Carpet Installer: A contractor picks up the wrong carpet at the dealer and mistakenly installs it in a customer’s home. The installer has to remove the incorrect carpet and replace it with the correct product. Total contractor loss: $3,000.
  • HVAC Contractor: When installing a new cooling unit on the roof of a commercial building, a contractor fails to complete the foundation support. The unit breaks through the roof, destroys the equipment, and causes significant damage to the building and personal property, costing the contractor: $25,000.
  • Fence Erection: A contractor misreads the site plan while installing a fence. As a result, the fence is installed significantly over the property line and has to be removed and reinstalled. Total contractor loss: $35,000.

The General Liability policies of these contractors would not cover these losses. However, Contractors Errors & Omissions (E&O) insurance can pick up the tab for claims of negligence, providing financial protection and peace of mind for contractors in today’s “litigation society.” Insurance companies have tailored policies for small contractors in a wide variety of specialties – everything from HVAC dealer/ distributors, janitorial contractors, and locksmiths, to septic-tank cleaners, masonry contractors, and interior-tile and stone artisans.

To learn how Contractors E&O coverage can help protect your business, feel free to get in touch with us.


By Construction Insurance Bulletin | No Comments

Construction projects involve significant financial risk for the contractors and subcontractors who must pay workers and purchase materials. To help protect themselves against these financial losses, builders have a number of insurance options. Two of the most widely used coverages are Builders Risk and Installation Floaters. The choice you make depends on the nature of each job.

Builders Risk insurance pays for damage to materials or partially completed work due to accidents, fires, weather damage, material defects, and incorrect installation or workmanship. This coverage ensures that the time and money that the builder has invested in the project aren’t lost when the costs of repairing, repurchasing or reconstructing add up and diminish profits.

Installation Floaters cover specific items that a contractor is planning to install. For example, a roofer might buy a policy to pay for the cost of roofing supplies, both during transit and while stored at the work site. An Installation Floater covers either all risks or specific sources of losses for moveable property (materials or equipment) specifically named in the policy.

Because of its more narrow coverage, an Installation Floater generally costs less than a Builders Risk policy. However, it leaves the builder more vulnerable to losses that aren’t covered. This coverage would be appropriate for a contractor performing a specific installation task, or a subcontractor who takes on limited risk to perform a specific duty for a contractor as part of a larger project.

As Construction insurance professionals, we’d be happy to recommend the type of coverage best suited to protect you against losses on each job. Just give us a call at any time.


By Employment Resources | No Comments

A recent nationwide study by the Washington National Institute for Wellness Solutions (IWS) found that only 10% of middle-class workers believe that they have enough savings to cover medical emergencies and the long-term cost of a critical illness.

Diseases such as cancer, heart disease, or Alzheimer’s can be life-changing financially, as well as personally. Although most respondents said that, even with Medical and Disability Income insurance, they would need out-of-pocket funds to cover their expenses from a serious medical condition, they lack the savings to fall back on. Nearly half (45%) felt they would never recover financially from a battle with Alzheimer’s or dementia; for cancer, the percentage is 38%.

Out of 1,001 survey participants between the ages of 30 and 66 and annual household incomes of $35,000 to $99,999, 75% have saved less than $20,000. Among these, half have less than $2,000 in savings – and one in four have no current savings.

One-fourth of respondents “did not know” what resources they would use to help offset their expenses, says IWS. Others would use credit cards (28%), loans from friends and family (23%) or financial institutions (19%) to help cover what insurance doesn’t.

Washington National Insurance Co president Barbara Stewart advises employees to give themselves a reality check about the financial burden of critical illness. “Find out what your current insurance will – and will not – cover” says Stewart, “and then assess your overall financial health. Identify the gaps between the resources you would need and the options you have.”

We’d recommend that you offer your employees Critical Illness coverage as a voluntary benefit that will provide an extra layer of financial protection when they face the challenge of a serious disease.


By Employment Resources | No Comments

Long-Term Disability insurance (LTD) has been making headlines lately. According to The Wall Street Journal, although only 0.5% of federal disability recipients return to work, nearly 20% of workers with employer-paid LTD do. So with a success rate 40 times higher than that that of the government program, why is it that nearly 100 million workers don’t carry this benefit?

“There’s a coverage gap when it comes to disability, and educating [employees] is going to be important,” says Andrew Sullivan, SVP of Disability and Small Market Business at Prudential Group Insurance. He adds that worker awareness of their vulnerability to illness and accidents, and the availability of LTD will become increasingly widespread as more employers shift to 100% voluntary coverage.

The trend toward sharing the cost of coverage between employers and employees or having it paid entirely by employees depends on the quality of the enrollment support provided. One way of getting the younger generation of workers enrolled is to shorten the length of coverage, by letting employees choose how long they want to be eligible, say for two years, instead of until age 65. This approach can be especially effective because younger people often don’t believe that they’re going to get sick or have any accidents happen to them.

More and more employers are looking for reports and analysis of productivity and wellness programs to provide guidelines on how they can minimize or to prevent workplace-related disabilities.

According to insurance experts, widespread implementation of the Affordable Care Act over the next 18 months will have a significant impact on LTD and other voluntary benefits products.

For more information, please call or e-mail our agency.


By Employment Resources | No Comments

Death will come to all of us – including your workers. At this emotional and stressful time, voluntary end-of-life products can help provide invaluable financial and medical comfort to those who your employees have left behind. In offering them these benefits, it’s essential to show sensitivity and concern for their needs.

Benefits such as Hospice Care, Travel Assistance, and Funeral Prepayment deal with highly sensitive issues and problems that have a significant impact on workers and their families, young and old alike. Hospice Care, for example, will help employees pay for health-related end-of life costs that their Health insurance doesn’t cover; Travel Assistance picks up the tab for their emergency medical treatment while traveling.

To help your employees make wise choices, you need to listen to their end-of-life issues with care and empathy based on an understanding of their needs. Make sure they understand that these benefits can offer financial assistance for them and their families if a terminal medical condition leaves them unable to work. Give workers a choice of programs based on their individual situation – for example, stressing the value of hospice care to a worker with a family history of cancer.

Do not try to “hard sell” end-of-life benefits! Bear in mind that it takes time for employees to find their emotional and financial comfort level in absorbing this information and making the best decision for themselves and their families.

The Employee Benefits specialists at our agency can offer you access to a wide variety of these programs and recommend those that are best suited to the needs – and pocketbooks – of your workers. Please feel free to get in touch with us at any time.


By Employment Resources | No Comments

Are you getting the best return on your investment in employee benefits? Unfortunately, it’s not always not easy to answer this question. You might well have too much information on some programs – and too little on others.

To help employers evaluate the cost-effectiveness of health-related benefits program, experts recommend these guidelines:

  1. Focus on the overall picture. It can be easy to miss the forest for the trees. For example, when measuring the impact of a return-to-work program, it’s easy to determine whether disabled employees are getting back on the job sooner. However, you also need to consider the overall impact of the program on your other health-related benefits.
  2. Share information among programs. Most employers manage their health benefits in separate silos – Medical insurance in one place, Disability in another, and Workers Compensation in a third. Be sure to distribute every incident of medically related absence throughout the company. The more effectively you integrate your data among all your benefits programs, the better.
  3. Benchmark your results against those of your peers. The easiest and most straightforward standard is how comparable companies in your industry are doing. Although this might not be a precise comparison, it should give you a fair idea of what your competitors are doing right (and wrong) with their benefits programs – offering guidance you can use to improve yours. For example, to compare your Short-Term Disability program with these of other companies, consider how the incidence and duration of disability incidents are related to underlying diseases in the workforce and the design of the plan (the elimination period, rate of wage replacement rate, maximum benefit period, and so forth).

We’d be happy to help you evaluate the cost-effectiveness of your benefits program. Just give us a call.


By Risk Management Bulletin | No Comments

“Contingent workers” {part-time, temporary, or contract employees) face a high risk of occupational injuries and illness. According to the National Institute for Occupational Safety & Health, reasons include the tendency to outsource more hazardous jobs, worker lack of experience and familiarity with operations in a new workplace, inadequate protective equipment, and limited access to such preventive measures as medical screening programs.

Even though the safety of contract workers is the legal responsibility of the contractor, the OSHA General Duty Clause makes you responsible for protecting everyone in your workplace. To meet this obligation, and bolster workplace safety compliance, we’d recommend these guidelines:

  1. Make sure that the contractor agrees to comply with OSHA requirements. If the contractor doesn’t follow safety rules, force compliance or stop work for breach of contract.
  2. Set safety compliance ground rules up front.
  3. Share accountability for safety compliance with the contractor. Although you might not be legally responsible for an accident caused by a contract employee, it’s still your problem.
  4. Offer assistance. Explain hazardous conditions or processes during project orientation and stress any rules and restrictions, such as hot-work permit requirements, lockout/tagout, and confined spaces situations and needs.
  5. Document communications with contractors. Have them sign an agreement for resolving specific safety problems or for conducting inspections.
  6. Read the OSHA Multi-Employer Citation Policy compliance directive (CPL 02-00-124), which applies to contractors on your work site.

Finally, the fact that most contingent workers will only be in your workplace for a short time adds to the urgency of getting them up to speed on company safety policies ASAP.

For more information on keeping contingent workers safe in your workplace, please feel free to get in touch with us.