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Monthly Archives

January 2014


By Your Employee Matters | No Comments

In its research report, The Conference Board CEO Challenge 2013, American respondents ranked concerns about operational excellence, government regulation, customer relationships, and innovation above challenges related to human capital (human resources). This fifth-place ranking is the lowest among CEOs surveyed around the world. Let’s think about the role of human resources in all of this:

  1. HR should be directly involved with improving operational excellence by understanding total quality management and similar tools. Bring this same level of excellence to the HR function.
  2. HR should manage government regulation as it relates to human capital. This job is considerably more difficult in states like California and if you have offices abroad. There’s no substitute for audits, surveys, training, and running data to make sure you’re meeting these obligations.
  3. The quality of customer relationships depends primarily on how well HR supports the hiring of these employees. HR can also work with the marketing department to brand the importance of great customer service to the workforce.
  4. Finally, HR has to improve its willingness to innovate. Most people view HR as boring, unimaginative, non-innovative, etc. – largely because it is! How many HR experiments have you implemented in such areas as of hiring, retention, performance management, generating employee suggestions, and so forth?

This survey tells me that American CEOs continue to undervalue the opportunity in human resources. The challenge for HR professionals is to step up and give these executives a reason to change their minds.


By Your Employee Matters | No Comments

According to the 2013 Inc. 500 CEO survey, the top three attributes of outstanding leaders are trustworthiness, sincerity, and a capacity to inspire. This survey can be viewed as a self-prophecy. Perhaps this is how most of the CEOs view themselves. Of course, they see themselves as trustworthy, sincere, and inspiring. But is that how their employees view them?

According to Inc. magazine, likability was the last of 21 characteristics for making great leaders. In my experience, you don’t have to like a boss to work for him or her, but the chances are you won’t work there very long. However, if you like the boss, you’re likely to stay remain much longer, even if you could make more money elsewhere. To see the survey results, go to http://www.inc.com/magazine/201309/how-the-inc.500-approach-leadership.html.


By Your Employee Matters | No Comments

The California case, Rope v. Auto-Chlor System reinforces the futility of an employer trying to terminate an employee so as to avoid liability. Plaintiff Scott Rope informed his employer at the time of his hire that he planned to donate a kidney to his physically disabled sister. He had requested to be given leave to do so. He later requested that leave be extended and paid under newly enacted Donations Protection Act, which was to take effect January 1, 2011. Rope was fired two days before the DPA came effective; with Auto-Chlor clearly hoping to avoid the 30-day payment obligation. The court agreed that the employer could not be held liable under a law that had not yet taken effect. However, it added that, under the circumstances, Rope had a potential claim, because the disability of his relative was a substantial factor motivating the employer’s decision, otherwise known as “associative discrimination.”

The court cautioned:

“Our holding should not be interpreted as a siren song for plaintiffs who, fearing termination, endeavor to prepare spurious cases by talking up their relationship at work to a person with a disability; such relationships do not, by themselves, give rise to a claim of discrimination. An employer who discriminates against an employee because of the latter’s association with a disabled person is liable even if the motivation is purely monetary. But if the disability plays no role in the employer’s decision, there is no disability discrimination.”

The case was sent back to the lower court to determine whether the plaintiff’s disability or that of his sister played any role in the employer’s decision. If it was purely an economic choice, there was no disability discrimination. (The court indicated that Rope himself did not have a disability as the result of donating a kidney, nor did the company act as if he had one).

EDITOR’S COLUMN: Think For Yourself

By Your Employee Matters | No Comments

You either choose your story for yourself or let others choose it for you. As Don Miguel Ruiz reminded us: we can become domesticated into our stories. This means that they’re often not of our own making. As I say, they are gifted to us. Often these stories are so familiar to us that we’re unaware that they even exist. They can affect us both good and bad for a lifetime.

It took a revealing experience in my mid-thirties which caused me to become an independent thinker. In a workshop, I had the highest winning score ever in a betting game designed to teach win/win thinking. The only instruction they gave, or would give, was to win as much as you can. There was a guy in the corner with a megaphone continually barking out this instruction to the participants.

I dutifully manipulated the game (as instructed) and won more than anyone else by a large measure. Heck, being a lawyer, the game of manipulation came natural. Of course, this meant I helped generate a number of really bad…and upset… losers. During a group de-briefing afterwards, I was asked if I could see that I could have played a win/win game where all participants could prosper. I said sure I could see that, right away in fact, yet I justified my high score by saying “I was only following instruction! Those were the game rules and we lawyers are trained to follow rules. In addition I was raised by a 6’3” Marine Corps Sergeant. (I felt like his last soldier at times.) You better believe I learned about following rules early on in life!”

The facilitator then asked me an insanely powerful question: He said “Do you always listen to the noise?” My brain stopped dead in its tracks! Wow. The noise. Why did I blindly follow instruction? What other “rules” am I following that aren’t of my own making? Do they really make sense? As Gurdjieff might ask, “Am I truly an automaton?”

From that day on, I determined to think for myself; to become 100% responsible for my lot in life. I decided that I could no longer do the safe thing, the thing I had trained myself to do, the thing I did so well; but rather to evolve and do what I should do. For 17 years as a plaintiff’s attorney, I had been feeding off the story that litigation was how I could make a difference. When I stopped listening to the noise and reality hit, I had a midlife crisis. I couldn’t live my passion using litigation to actualize it. Nobody wins a lawsuit. There had to be a better way!

Sometimes we question our sanity when reinventing ourselves. Change is fearful even if it’s exciting. Will they let me champion this idea I have? Is this new career or business going to survive? Am I going to go bankrupt – again? Will a competitor come along to put me out of business? Do I really want to do this anymore? Am I too inexperienced to do it? Am I nuts?

If you try to do the exact same thing, the exact same way for the next three – or 30 – years, you’ll be guaranteed to turn into that automaton and regret missed opportunities.

Don’t listen to the noise. Don’t let others decide what your story will be. Think for yourself.


By Business Protection Bulletin | No Comments

You’re at the airport car rental counter to find a convertible for the weekend — for business, of course. “No problem,” says the sales rep. But before handing you the keys, she asks if you’d like additional Physical Damage coverage. This leaves you with a problem: Should you pay the extra money or trust your own insurance?

Your Business Auto insurance will probably pay for your liability on the business rental, but coverage for damage to the rental vehicle can be more complicated. You might be covered under your Business Auto or Personal Auto policy, or even the credit card that you used to pay for the rental, Depending on the situation, it’s also possible that none of them will pay very much.

To make things even more confusing, laws in a number of states limit your responsibility for damage to the rental – if coverage applies under any of the above, there might still be exclusions and limitations.

To help cut through this confusion, here are a few tips:

  1. Rent from a reputable company. The national car rental firms tend to have standardized contracts with tested language. Local or smaller businesses often develop their own contracts, and without legal assistance it might be nearly impossible to determine exactly what you’ve agreed to.
  2. When in doubt, ask. The person at the rental counter might not be sure about what coverage she’s selling, so be sure to ask to speak to someone who can clearly explain what you are and are not responsible for. If you’re unsure, walk away.
  3. Talk with us before your trip. We’d be happy to explain your options.


By Business Protection Bulletin | No Comments

It’s a tough marketplace and a rough economy. Corporations that everyone assumed were rock solid have suddenly been shown to be paper tigers. Could it happen to your insurance company?

A proven way to checking out the financial health of your current or prospective insurance company is to ask for its Best’s Rating. A.M. Best Co. has been rating insurance carriers since 1899. Although there other organizations offer such ratings, Best’s is still the most widely cited.

After evaluating a company’s balance sheet strength, operating performance, and business profile, Best measures it against a series of quantitative and qualitative standards. This results in the assignment of one of two types of rating opinions: a Best’s Rating (A++ to F) or a Financial Performance Rating (9 to 1).

These ratings tell whether the carrier with which you’re dealing has the size and assets to insure your business comfortably. They also allow you to see how a particular company fits with the remainder of your protection program. For example, many Business Umbrella insurers have set a minimum Best rating requirement that must apply to any other company that provides your basic coverages.

Although a strong Best rating doesn’t guarantee an insurer’s future financial performance, it provides a benchmark that policyholders can use to determine whether they’re dealing with a carrier who’s likely to be there at the time of a claim. For more information about Best’s rating system, go to www.ambest.com.

To learn how A.M. Best and other rating organizations rank the companies that insure you, and the implications of these ratings for your insurance program, feel free to get in touch with us.


By Business Protection Bulletin | No Comments

“Sticks and stones may break my bones, but words will never hurt me.” Unfortunately, this saying does not hold true for your firm.

Sad to say, in today’s “litigation society,” it seems that just about any business (including yours) can be sued for any number of reasons. Consider these scenarios:

  • A computer error results in the release of sensitive information about a key client.
  • An overzealous employee sends a LinkedIn message criticizing a competitor.
  • A security guard detains a visitor that he suspects of theft.

Each of these incidents could easily lead to six-figure litigation; and, even if you won, you’d have to deal with the time, hassle, and expense of defending the suit – as well as the potentially significant indirect costs from negative publicity.

Not to worry. Personal Injury Liability insurance will pay for any judgment, up to the amount of the policy, against your business for non-physical harm to a third party from a wide variety of causes: libel, slander, defamation of character, false arrest, malicious prosecution, wrongful eviction, or violation of privacy. (This “peace of mind” coverage is distinct from another essential policy, Bodily Injury Liability, which covers allegations of physical damage).

Bear in mind that Personal Injury Liability has a far different definition in insuring your home and auto. Under a Homeowners policy, it covers physical harm to people injured on your property or as a result of your actions. Auto Liability insurance includes two coverages –Bodily Injury and Property Damage – that, together, are known as Personal Injury Liability or Personal Insurance Protection (PIP).

Our Business insurance specialists stand ready to recommend a Personal Injury policy that provides the coverage you need, at a price you can afford. Give us a call.


By Business Protection Bulletin | No Comments

The chances are that your company relies heavily on one or two people – such as a partner, operations manager, or foreperson – whose knowledge, expertise, or overall contributions are essential. If death put this person out of the picture, where would you find the financial resources to keep you up and running?

The answer: a Key Person Life Insurance policy under which your company receives all or most of the proceeds. This term can also apply to other coverages used for business continuation purposes, including: 1) Buy-Sell or Shareholder Insurance, to reimburse partners or investors; 2) Debt Protection; and 3) Revenue Protection. You can use the funds to replace lost income due to the unavailability of the key person and to recruit, develop, and train a replacement.

The policy’s cash value might be available to your business through a withdrawal or loan, if needed. You can also split the premium and death benefit between the firm and the spouse or partner of the key person to ensure that she or he receives replacement for the person’s economic value to the family (However, these premiums are not tax deductible).

What’s more, Key Person coverage provides a financial asset that enhances the creditworthiness of your company for commercial lending, by ensuring that the business will stay up and running if the key person is out of the picture.

The amount of coverage you need will vary – say, from $100,000 to $500,000 – taking into account what your budget allows versus how much the business would need to survive while you’re bringing a replacement up to speed.

As always, our agency stands ready to advise you at any time.


By Construction Insurance Bulletin | No Comments

More construction companies are stressing the relationship between workplace safety and employee wellness initiatives, Says Rik Kunnath, executive chairman of Pankow Management Inc. (San Francisco), “Among a lot of companies, there’s a growing awareness that for workplace safety programs to really affect behaviors, there needs to be a culture of deep concern for the well-being of employees.

Unfortunately, Pankow came to this awareness only after several on-site fatalities in the early 1980s forced the company to re-evaluate its workplace safety priorities. According to Kunnath, “That led to some soul searching as to whether we were really doing all that we could to work safely, and whether our drive towards high rates of production were overwhelming the safety message. It’s unfortunate, but sometimes having a deep personal commitment to safety is triggered by an accident or an incident.”

Over time, Pankow’s commitment to protecting its workers has expanded to include a far broader view of their overall health, and the role of workplace wellness programs in reducing on-site injuries. “In the beginning”, notes Kunnath,” there was some concern that by taking this view of our values, our safety programs could get watered down as they compete with other wellness initiatives, but if anything, the opposite has occurred.

“Everyone knows that nothing we do as an industry has a higher potential for injury than field operations, and that always has to be our most important focus,” he adds. “It’s just that it’s a lot easier for employees to accept your safety message when everything else you do in your interactions with them says that your concern for their well-being is real.”

Words of wisdom.


By Construction Insurance Bulletin | No Comments

A resurgent construction industry needs to do a better job of keeping workers safe. That’s the bottom line of a recent report by Marsh Risk Consulting.

Based on data from the U.S. Bureau of Labor Statistics, the study, “Building Safety and Leadership in the Construction Industry,” notes that the industry’s 2012 fatality rate increased to 9.5 per 100,000 workers from 9.1 per 100,000 in 2011. The 775 construction-sector deaths in 2012 marks the first annual increase in work-related fatalities since 2006.

According to Marsh, fatalities will probably continue to rise without concerted industry-wide safety improvements, as an ongoing shortage of experienced construction workers leads to widespread promotion of unskilled workers into supervisory roles. “The increase in new construction activity is bringing an influx of new, inexperienced workers,” states the report. “In this environment, some contractors are stretching their hiring standards to meet project demands.”

Marsh recommends that construction firms focus on training management to ensure effective leadership and help build a culture of safety throughout their organizations.

“As the economy grows and the number of new construction projects picks up, now is not the time to be lax on safety,” warns John Moore, a construction safety specialist in Marsh’s workforce strategies practice. “Inadequate safety performance can lead to employee turnover and legal, financial and reputational risks. Investing in high-quality leadership will go a long way toward retaining valued workers and maintaining a safe work environment.”

The more you do to keep your workers, safe, the better for all concerned– and the lower your insurance costs. We stand ready to offer our advice on developing, implementing, and enforcing workplace safety standards. Just give us a call.