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Monthly Archives

December 2014

Umbrella Policies: Protection From More than Rain

By Business Protection Bulletin | No Comments
Businesses and wage earners need an “umbrella policy” also called an “excess liability policy”. These policies kick in when your personal or your business liability policy limits max out.
First, let’s look at excess commercial liability insurance known also as a Commercial Umbrella Policy. These policies protect you, your business and its employees from legal liability beyond the limits of your primary liability policies. It is an added level of insurance over your commercial general liability, Business Owner’s Policy, Business Auto Insurance, and employers liability coverage. A commercial umbrella policy has three purposes:
1.It continues to pay for your legal liabilities, including legal defense when the limits of any of your primary liability are met or exceeded due to claims.
2.It takes over when the total limits of a claim of an underlying policy reach exhaustion because of earlier claim payments
3.It provides protection against certain liabilities for which you have no coverage, subject to the assumption by the named insured of a self-insured retention.
These uncovered incidents include claims for:
•Contractual liability both written and oral
•Liquor law liability
•Non-owned aircraft liability
•Slander and libel
•Much More
A total commercial liability umbrella plan covers for almost anything you think of; in fact you are buying insurance for some situations you will never encounter.Nevertheless, if your business interacts with the public in any way; customers visiting your place of business, sales people visiting your premises, delivery people making a delivery employed or contracted sales people visiting clients or customers. Other exposures that protect your business from with an umbrella policy is from liability stemming from products you sell or produce.
The greater the risks facing your business the more important a commercial umbrella policy is. Schedule a meeting with your business insurance advisor to discuss if you need and how much you need, in umbrella coverage.
Personal Umbrella Coverage
Most people who own homes and cars have separate liability insurance policies, the first is homeowner’s insurance and the other is automobile liability insurance. Just as a commercial umbrella policy extends your policy limits so does a personal liability umbrella. For under $1 thousand dollars each year, you can add the protection of a personal umbrella policy with several million dollars of protection.. It kicks in when either of your primary liability coverages end (usually you need $100 k/ $300 k limits on both homeowners and auto liability). It also covers some things that are not typically covered such as slander, libel, and more.
When deciding how much personal umbrella insurance you need, consider buying an amount at least equal to your net worth. Speak with your personal insurance advisor to make sure you buy the policy that is best for you.

The Language and Meaning of Business Insurance and Insurance Endorsements

By Business Protection Bulletin | No Comments

Your business insurance value has no relation to your policy premium or your policy premiums, the value of your insurance portfolio related directly to the risks you insure against. If you are not an insurance expert, it is important for you to meet with an insurance advisor to check your policies, their limits, the risks they cover, the risks they do not cover and any duplicate or missing coverage for your business.
Understand the Language
One example of not understanding the language of insurance affects manufacturers. Many insurance carriers slip into your policy an insurance clause called a Classification Limitation Endorsement. The danger with this endorsement is that the limitation of work is not known until only after a claim has been filed against you. So, you the coverage you thought you had does not exist because there are scores of manufacturing classifications. If you have a claim and are misclassified, who pays the bill is often a decision you hate.
Do you have claims made or Occurrence Professional Liability Insurance?
Occurrence Professional Liability Insurance
The occurrence professional liability form of insurance pays for claims that occurred during the policy period, regardless of when the claim if filed. This kind of policy provides gives long-term protection for claims filed after the policy ends but happened while the policy was in force.
Claims Made Insurance
This form of insurance covers claims made during the active life of the policy. Although this type of professional protection is less cost than occurrence insurance, often it is a false saving. If your insurer stops writing this policy or you want to switch to an occurrence based policy, an incident that occurred during the covered period of your claims-made coverage but reported afterward get no response from the old carrier. You are on your own, unless you buy Extended Reporting Period (ERP) also known as “tail insurance.” The cost of this insurance can be twice the price of your claims made policy.
With a better understanding of insurance language, a meeting with your insurance advisor, whether you are a general contractor, a lawyer, or a retailer proves useful. The following endorsements (coverages you add to your base policy) impact your insurance policy and your bank account.
Pollution Exclusion:
Your Commercial General Liability policy always excludes liability from pollution. Through an endorsement it can be added to your policy. To get it, always ask your insurance advisor for the widest package of protection available – then ask if you have coverage for legal liability arising from an injury or property damage caused by pollution.

Per Project Aggregate:
the acronym is PPA and it covers extending the limits on every job you do to the full limits of liability. Say you carry $1 million per occurrence/$1 aggregate. A per project aggregate raises the aggregate for each project to $1 million. this insurance, just like pollution insurance applies to those in the environmental protection design or building industries.

Additional Insured:
The term applied mostly to liability and property insurance. An extra insured often is the owner of a construction project who wants the additional insured on the general contractor’s liability and property insurance. To get the status of additional insured and the insurance coverage that status provides the general contractor uses an endorsement that either specifically covers the named insured or by a description in a blanket additional insured endorsement.
Other coverages your business needs looking at include:
Employee theft

Inland Marine


Many times when endorsements are added to the policies you inadvertently duplicate coverage. An insurance advisor help you avoid that waste of premium dollars and helps make sure you buy the coverage you need – that is where the value is for the business insurance portfolio is.

CGL (Commercial General Liability) or BOP (Business Owners Policy)?

By Business Protection Bulletin | No Comments

If you are a startup business or a growing business, chances are you purchased the least amount of insurance so your cash flow stayed manageable. Often, after your first meeting with your insurance agent, or bought your insurance online, you haven’t had the time to have an insurance expert go over your insurance portfolio.

Commercial General Liability Insurance

Most of the time businesses, especially those who buy insurance online, buy Commercial General Liability Insurance (CGL). This insurance protects you, your employees and your business from property damage and personal injury claims up to the policy limit. CGL insurance allows you to add more coverage, such as employee theft, employee auto business liability, and many other business risks that owners encounter and use endorsements to add coverage to their CGL policy.

However, when you add endorsements, two things can occur;

  1. Each time you add an endorsement to your premium rises and
  2. Often, when you add one or more endorsements, it includes coverage you already have.

Business Owners Policy

A Business Owners Policy is an insurance policy designed for small and medium-sized businesses. Just like Commercial General Liability Insurance it covers you, your business, and employees from legal liability for property damage or personal injury up to your policy limit.

But that is just the beginning of a BOP policy. Additional standard coverage includes:

Personal Injury Liability Insurance: This is far different from Personal Injury Insurance, this type of coverage includes protection from legal liability for your employees, yourself and your business for claims arising from things such as libel and slander, false advertising, and other similar civil rights violations.

It also protects people employed by you, yourself and your business from legal liability related to advertising such as:

  • Libel
  • Slander
  • Theft of intellectual property
  • Infringement of trademark of company name

Buildings Coverage and Business Personal Property

Other coverage that comes with your BOP is coverage for Business Personal Property. This protects you from loss if:

Property owned by the company and used by it suffers damage or destruction.

Interior property loss, such as furniture, fixtures, and equipment placed permanently at your business site.

Building additions completed for the expansion of your business site

Customer’s property under the care of the company

If you do not do an annual insurance review, schedule one now. Speak with an independent insurance advisor to choose the best kind of policy for your business.

Risk Management Investments or Insurance Expenses – how to decide where to spend the money

By Business Protection Bulletin | No Comments

Risk management is a process by which business risks are identified, analyzed, engineered, reduced, eliminated or transferred. Often, insurance is the final transfer of risk.

Certain risks point to insurance solutions, for example large liability limits for products or automobile exposures.

Other risks immediately point to engineering or operational risk management. Think of insurance as replacing a monetary loss. If a building burns to the ground, money replaces the loss as building funds or asset value. Now, think of losses that money cannot replace. Money will not buy a second Mona Lisa.

Failure to recover data from damaged computers, loss of cryogenically stored materials, losing the irreplaceable, these risks require management.

The cloud changes the data recovery problems of the past, but it exposes data to misuse and mischief. Simply keep a second portable record separate from the original. This duplication technique can be used for inventory management too; split mission critical stock storage into two locations.

Use redundant monitoring systems on refrigeration or other climate controlled areas. Implement a self-contained back-up energy supply such as a generator. If money cannot replace the materials stored, take avoidance and reduction loss control measures.

Do you have a product which requires a high level of expertise to operate properly?

Once the product leaves your care, poor operator training can lead to injuries or property losses. Distinguishing between defective equipment and operator error can be difficult, or it may become secondary to the financial depths of the stakeholders’ pockets.

If your product requires operational expertise, reconsider selling it as a service whereby your own personnel complete the task. You may save your company exposure to liability claims.

Risk management techniques work well with non-monetary issues or when components are irreplaceable at any price. Think through your operations and identify risks which cannot be solved with money. Risk manage those.

Question of the Month: Travel Policies

By Your Employee Matters | No Comments
We were recently asked “We are currently revamping our travel policy and are looking for feedback as well as helpful hints or examples.
A few specific items are, potential client lunches/dinner pertaining to alcohol limits and pricing and hotel star rating with average price per night.”

Employers often question us about the protocols around travel policies and procedures. Here’s a snapshot of what matters most:
1. First, the law directly from the DOL:
Travel Time: The principles which apply in determining whether time spent in travel is compensable time depends upon the kind of travel
Home to Work Travel: An employee who travels from home before the regular workday and returns to his/her home at the end of the workday is engaged in ordinary home to work travel, which is not work time.
Home to Work on a Special One Day Assignment in Another City: An employee who regularly works at a fixed location in one city is given a special one day assignment in another city and returns home the same day. The time spent in traveling to and returning from the other city is work time, except that the employer may deduct/not count that time the employee would normally spend commuting to the regular work site.
Travel that is All in a Day’s Work: Time spent by an employee in travel as part of their principal activity, such as travel from job site to job site during the workday, is work time and must be counted as hours worked.
Travel Away from Home Community: Travel that keeps an employee away from home overnight is travel away from home. Travel away from home is clearly work time when it cuts across the employee’s workday. The time is not only hours worked on regular working days during normal working hours but also during corresponding hours on nonworking days. As an enforcement policy the Division will not consider as work time that time spent in travel away from home outside of regular working hours as a passenger on an airplane, train, boat, bus, or automobile.
2. Know you can pay a lower rate for travel time, which is not an issue with exempt employees.
3. Travel policies can involve a host of concerns::
•Responsibilities and Enforcement
•Travel Arrangements
•Air Travel
•Accommodation Selection
•Car Rentals
•Other Transportation
•Meals and Entertainment
•Award Point Programs
•Spouse/Guest/Personal Travel Combined with Business
•Other Reimbursable Expenses
•Miscellaneous Travel Expenses
•Payment and Documentation
4. Involve those who travel in setting up your policy. That way they can “own it”. As somebody who travels frequently I would recommend you open a corporate account with a Marriott, Hilton or Holiday Inn and have folks stay at the Hampton Inns, Doubletree, Holiday Inn Express and similar lodgings for best value. I’d also open up a SWA or Alaska Airlines account for air travel. Require them to book at least 3 weeks in advance if they can. I’d let the employees keep their points.
5. As for alcohol consumption and entertainment I’d limit their consumption to 2 drinks. Cost of meals will vary with the circumstances. If you are concerned about it going over a stated amount you can ask them to check in with somebody first to get approval.
Don Phin, Esq. is VP of Strategic Business Solutions at ThinkHR, which helps companies resolve urgent workforce issues, mitigate risk and ensure HR compliance. Phin has more than three decades of experience as an HR expert, published author and speaker, and spent 17 years in employment practices litigation. For more information, visit www.ThinkHR.com.


By Your Employee Matters | No Comments
Organizations that pay employees severance not otherwise owed under policy or prior agreement, often require employees to sign a separation agreement releasing all claims against the employer in exchange for the severance. Because of prior challenges to such agreements by the EEOC, those separation agreements now include a specific provision protecting employees’ right to file EEOC charges and participate in EEOC investigations. While the EEOC has blessed (or arguably required) such provisions in the past, a recent wave of lawsuits filed by the EEOC signal it now wants more.
Over the last year, the EEOC has filed three lawsuits against companies challenging the validity of their separation agreements. The EEOC has challenged a:
Non-disparagement clause that prohibits employees from making disparaging remarks about the employer, its officers, directors and employees or remarks that could damage the reputation and goodwill or reflect negatively on the employer
Cooperation clause that requires employees to promptly notify the company’s general counsel of contacts related to an “administrative investigation;”
Confidentiality clause that prohibits employees from disclosing confidential employee or other information without prior written permission
The EEOC claims these provisions interfere with employees’ rights to cooperate with the EEOC and other administrative agencies in investigating charges of discrimination.
As part of the settlement for one of the suits involving the non-disparagement clause, the company agreed to include the following language in future separation agreements:
Employees retain the right to communicate with the EEOC and comparable state or local agencies and such communication can be initiated by the employee or in response to the government and is not limited by any nondisparagement obligation under the agreement.
While it is unclear whether the courts will find that the EEOC has gone too far, and whether the EEOC, or a plaintiff, would succeed in having a release agreement set  aside without such limiting language, there are some steps you can take in the interim to reduce unwanted attention from the EEOC to your separation agreements and to bolster any defense of such an attack until there is some clear guidance from the courts.
First, confirm your release contains a specific provision expressly allowing employees to file EEOC charges and participate in EEOC investigations.
Next, review the agreement for any language that may be reasonably read as limiting employees’ participation in a federal, state, or local investigation or proceeding (e.g., non-disparagement, cooperation, and confidentiality clauses).
While it is not suggested these provisions be deleted, consider adding language explicitly stating these provisions do not limit an employee’s right to participate in an administrative investigation or proceeding conducted by the EEOC or other federal, state, or local agency.
While a major overhaul is probably unnecessary for agreements legally reviewed in the recent past, a few minor adjustments may be appropriate to better insulate your agreements
Contributed by Elarbee, Thompson, Sapp & Wilson LLP  www.elarbeethompson.com and the Worklaw Network www.worklaw.com
Don Phin, Esq. is VP of Strategic Business Solutions at ThinkHR, which helps companies resolve urgent workforce issues, mitigate risk and ensure HR compliance. Phin has more than three decades of experience as an HR expert, published author and speaker, and spent 17 years in employment practices litigation. For more information, visit www.ThinkHR.com.

Not So Sweet: EEOC Targets Honeywell International, Inc.’s Wellness Program

By Your Employee Matters | No Comments

The Equal Employment Opportunity Commission (“EEOC”) has set its sights on employers’ wellness programs, which many organizations have set up as a way of encouraging employees to adopt healthier lifestyles and improve productivity, reduce absenteeism due to illness, and control health insurance costs. The EEOC’s latest action against Honeywell International, Inc. (“Honeywell”) is evidence that the EEOC has no plans to wait and see whether the courts will agree with its position in the first round of cases asserting that aspects of such programs are unlawful.

In late October, the EEOC petitioned a federal district court judge in Minnesota to stop Honeywell from applying penalties and costs against employees based on their participation in biometric testing of employees and their spouses as a part of its wellness program. The EEOC contends that if employees or their spouses fail to participate, they will lose Honeywell’s contribution to their health savings account and face up to $2,500 in health insurance surcharges. The EEOC argues these consequences for non-compliance violate the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act.

In a positive sign for employers, the district judge denied the EEOC’s motion for a preliminary injunction and will not block Honeywell’s administration of biometric testing and assessment of health insurance-related surcharges. The judge has not yet ruled on the legality of Honeywell’s wellness program. However, the judge opined that Honeywell’s program initially appeared to comply with the Patient Protection and Affordable Care Act’s (ACA) surcharge limits, and she expressed some reservations about the EEOC’s claim that Honeywell’s wellness program violates federal law.

Based on public records, Honeywell’s wellness program has many more safeguards and even-handed components, such as the ACA-compliant incentives/penalties and alternative means of participation in wellness activities, than the programs challenged by the EEOC in previous litigation this fall. Those previous cases allegedly involved wellness programs that imposed heavy financial burdens for non-participation, such as having to pay the full cost of one’s employee health insurance (both employer and employee shares of the premium). Thus, the EEOC’s challenge to Honeywell’s plan is somewhat perplexing, as is the continued absence of guidance from the EEOC on what is permissible in wellness plan design.

Contributed by Laura Anthony of Elarbee, Thompson, Sapp & Wilson LLP  www.elarbeethompson.com

Don Phin, Esq. is VP of Strategic Business Solutions at ThinkHR, which helps companies resolve urgent workforce issues, mitigate risk and ensure HR compliance. Phin has more than three decades of experience as an HR expert, published author and speaker, and spent 17 years in employment practices litigation. For more information, visit www.ThinkHR.com.

Editor’s Column: The Wrong Way to Respond to Sexual Harassment Allegations

By Your Employee Matters | No Comments

The case of In re: Beth V. Beth V., Appellant, v. New York State Office of Children & Family Services et al., Respondents. Workers’ Compensation Board, Respondent was an appeal from a decision by the New York State Workers Compensation Board that settlement proceeds from an employment lawsuit against the company should offset any workers compensation payments due based on the same set of facts. What’s not important for this article is the right to such an offset. What is important was how poorly the New York State Office of Children and Family Services responded to the sex harassment claim brought by Beth V. Long story short, Beth V. was hired by OCFS as a youth division aide and was assigned to work in the kitchen. M.E., a male resident, was given kitchen duty as part of a facility work program. One day when M.E. stepped away from the dining room, Beth V. confiscated a notebook he had brought with him to the kitchen. Apparently she did so because he told her he was writing notes about her of a sexual nature and had made crude, sexually explicit gestures. She gave the notebook to the youth division aide on-duty. M.E. threw a fit when he discovered this.

After the incident, Beth V. told various supervisors and fellow employees she felt unsafe, uncomfortable, and fearful of physical and sexual harm from M.E. Thena few days later, Beth V. was in an office off the kitchen, logging out from work, with her back to the door. M.E. accosted Beth V. from behind, taking her by surprise. He choked, punched, and raped her at knifepoint. Then he forced her to turn over her keys to her Jeep and abducted her from the camp. Beth V. eventually escaped when M.E. stopped to make a phone call at a pay phone and reported the crime to the local police station. She sued OCFS and eventually settled the case for $646,000, of which she ended up with $430,000. It was these monies that the workers compensation underwriting claimed it had a right to offset.

I can tell you that from my years of trial experience that if this was a private employer the punitive damage element would have been in the millions.

Bottom line is this: Take all claims of sexual harassment seriously. During my career I represented three women in Beth V.’s position and it’s not a pretty picture. In 2 out of 3 of these situations a decent investigation and follow-up action could’ve prevented the horrible outcome.

Don Phin, Esq. is VP of Strategic Business Solutions at ThinkHR, which helps companies resolve urgent workforce issues, mitigate risk and ensure HR compliance. Phin has more than three decades of experience as an HR expert, published author and speaker, and spent 17 years in employment practices litigation. For more information, visit www.ThinkHR.com.


Two Weird Conditions for Which Employers of Construction Workers Are Potentially Not Liable for Injury

By Construction Insurance Bulletin | No Comments

Construction sites are dangerous places. Not only do contractors comply with the state worker’s compensation laws, they also follow the mandates for construction company owners regulated by the Occupational and Health Safety Administration (OSHA). In most state’s, construction employees have the “exclusive remedy” of coverage provided by worker’s compensation. But, construction sites are usually busy places with a myriad of sub-contractors and equipment provided by third parties not working on the construction site. When a worker suffers an injury on a building site, sometimes employers aren’t responsible and the employee files a personal injury lawsuit against a third-party. Following are scenarios where the employer may have no liability for an injury and the employee looks for recourse from a third-party.

Injuries or Fatalities Caused By an Employee of a Different Contractor

This is often the reason for an employee seeking compensation from a personal injury lawsuit. Imagine that a worker for an electrical subcontractor has an injury or suffers a fatality from a falling object such as a heavy hand tool or a cinder block. A careless employee of the plumbing subcontractor is the person who dropped the object. In this case the defendants in a personal injury lawsuit can include, the worker who dropped the tool, the employer of the worker, the general contractor and the project owner. In most cases, subcontractors must give proof of liability insurance through a construction general liability policy (CGL) or a Business Owner’s Policy (BOP). Since it is unlikely that the employee causing the accident has much in the way of financial resources, the final liability is likely the subcontractor/employer. This is because most construction contracts include indemnity and hold-harmless clauses.

Product Liability Lawsuits

There are lots of dangerous equipment in use on construction sites. An example is a carpenter employed by a subcontractor suffers an injury from a handsaw with a safety defect. An automatic cutoff failed to work while the saw was in use and an employee lost his thumb. While this seems to fall into the realm of WC insurance, on review, it is not so clear. Perhaps it is the liability of the manufacturer, distributor, or installer of the equipment (such as rigging and scaffolding). In these cases the employee is likely to file a personal injury lawsuit against one or all of these businesses. This is especially true if WC denies the case based on product liability.

Contractors, be alert for your state’s rules on Worker’s Compensation and Personal Injury lawsuits. Every state has their own worker’s compensation rules and regulations – in some states if a third-party caused the injury, then worker’s compensation may not cover the incident, while in other states the employee can successfully file a WC claim and file a personal injury lawsuit.

Always complete an employee injury report immediately. Tell your broker about the accident. Insurance brokers often communicate with carriers about the injury and can let you know if the case is likely to be approved as a WC case or not. It is also a good idea to speak with an attorney about the likelihood of a lawsuit against the employer of the responsible party or part of the distribution chain for faulty equipment has a chance of success.

Rigging and Scaffolding Safety

By Construction Insurance Bulletin | No Comments

Construction workers, painting contractors, and window washers are some of the industries that use scaffolding and rigging.

Although this equipment is for worker safety, it is also the source of many injury and fatality claims including injuries to passersby.. Even though insurance such as worker’s compensation and General Construction Liability Insurance (CGL) or a Business Owner’s Policy (BOP) help protect companies from legal liability, it is simply good business and a moral obligation to take reasonable measures to cut these injuries and fatalities.


Rigging is the term used to broadly describe the myriad equipment used to lift, push, hoist, or pull objects on construction sites the most common types of rigging equipment helps hoist and crane operators when the task is lifting, then moving, a load horizontally. Installing the rigging is the duty of licensed riggers. Among the safety measures riggers use include:

  • Inspection of surroundings – riggers must survey the construction site and insure that there is enough room for lifting objects and moving them horizontally. Things to look out for include power lines and trees. Before the equipment operators use the equipment it must first be inspected.
  • The inspection, according to OSHA regulations must make sure that the rigging and the equipment it is working with is safe to activate and all controls work correctly.
  • Frequent inspections also called for too.
  • When a rigging setup is in use, the area where it is in use need barricades or blocking off from the public and construction workers.


According to the Bureau of Labor Statistic, 72 percent of workers injured in a scaffolding accident, reported that the accident cause was planking or support failing or, the employee was subject to either slipping or being hit by an object falling from above.

Cutting the number of accidents, construction sites simply need to follow the OSHA regulation on scaffolding. There are a number of OSHA requirements applicable to scaffolding used on construction sites. Key provisions include:

  • Fall protection or fall arrest systems are in place and working properly when scaffolds are in use and a worker is 10 feet or higher from the ground.
  • The uppermost guard rail on a scaffold is between 38 inches and 45 inches in height.
  • Scaffolds must have proper planking, that is full planking or decking
  • Guying ties and braces for supported scaffolds need a height-to-base ratio of greater than 4:1.
  • The scaffolds should have restraining systems for tipping by guying, tying, bracing or their equal.
  • Every employee has training in the correct way to use scaffolding.

More information is available at no charge from OSHA at https://www.osha.gov/Publications/osha3150.pdf,